Hits & Takes
John Lothian & JLN Staff
Coinbase has bought FairX, which extends the run on small or independent Designated Contract Markets. It is also another JLN sponsor bought out. Welcome Coinbase to the JLN sponsor family. We look forward to working with you.
We have part two of our interview with former CBOT General Counsel Scott Early in JLN today. This interview was shot a couple of years ago, but is still very timely as a historical piece for our The History of Financial Futures.
You know you have made it when you get an obituary in the New York Times. Yesterday the Libor was given that treatment in a piece titled “Libor, Long the Most Important Number in Finance, Dies at 52; Bankers used it until the end. Regulators say good riddance after its infamous fall.”
Robinhood posted to their blog that their employees no longer have to travel to the office to work. They may work from home primarily from now on. In fact, they may work anywhere in Sherwood Forest they want.
One of the things I worry about with working from home and the Omicron variant of the coronavirus running wild (let alone having it presently), is staying connected to friends. But making new friends is also an issue. How do you make new friends when you are locked away? Well, Inc. magazine has an article that might be useful titled “The Scientific Reason It’s So Hard to Make Friends as an Adult (and What to Do About It). Science confirms it’s harder to make friends as an adult, but psychology offers a few tricks to help.” I guess it is time to start an online book club.
BTW, here is a timely article from the Associated Press via the Houston Chronicle titled “When are you contagious if infected with omicron? Here’s what health experts say.”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Part Two of Scott Early – The History of Financial Futures
Part two of the JLN interview with former CBOT General Counsel Scott Early in The History of Financial Futures series starts with him explaining why the Chicago Board of Trade’s market share went down each year he worked at the exchange. It was because new exchanges all over the world were copying the success of the CBOT and CME and that was growing the overall derivatives markets numbers.
CFTC Chairman Behnam Welcomes CFTC’s First Chief Diversity Officer
Tanisha Cole Edmonds joins CFTC with 20 years of workforce diversity experience
Commodity Futures Trading Commission Chairman Rostin Behnam today announced the appointment of Tanisha Cole Edmonds as the CFTC’s first Chief Diversity Officer. In this role, she will provide leadership and executive direction on the CFTC’s efforts to integrate and promote diversity, equity, inclusion and accessibility (DEIA) at all levels of the agency’s workforce, and its talent and business operations. She will oversee the Office of Minority and Women Inclusion.
***** I like to see this kind of leadership from new CFTC chairmen. Chairman Behnam makes a statement with this move. We should all take note.~JJL
Coinbase Buys FairX to Launch Crypto Derivatives
Nikhilesh De – Coindesk
Crypto exchange Coinbase is purchasing FairX, a U.S.-based derivatives platform.The move could open the door for Coinbase to offer crypto derivatives products in the U.S. At present, only a handful of exchanges allow U.S. investors to trade bitcoin and ether futures, with cash-settled products being both the most popular and the longest-available products. FTX.US acquired LedgerX last August with a similar aim.
***** This is a smart move by Coinbase, kind of like buying Park Place in the game of Monopoly before someone else buys it and you find there is nothing more to buy. FairX has a very customer friendly approach that I hope Coinbase will keep. There are some excellent people at FairX too who will make great additions to the Coinbase team.~JJL
Proposed Framework Seeks to Better Define Liability for Chief Compliance Officers; A new framework proposed by the National Society of Compliance Professionals says regulators should seek to better understand how a company’s compliance function fits within the larger entity’s governance structure
Mengqi Sun – WSJ
A compliance professionals group is asking regulators to consider how a corporate compliance program functions within a firm, such as the resources it has available and the support it receives from leadership, when determining personal liability for compliance officers.
******Apparently stringing compliance officers up by their toenails is out.~JJL
Wednesday’s Top Three
Our top story Wednesday was Bloomberg’s Flow Traders Ousts Top U.K. Executive After BlackRock Complaints (which were “linked to drunken incident in pub, people say.”) My guess is this story was so popular because people are nostalgic for drunken incidents in pubs. Second was NinjaTrader Acquires Tradovate, a press release from Tradovate. The acquisition creates “a formidable retail futures broker with combined trading volume in 2021 of around 100 million futures contracts” according to LeapRate. Third was a MarketWatch opinion piece, Opinion: Citadel’s $1.15 billion cash infusion isn’t a bailout but the final test of Ken Griffin’s ‘Death Star’.
26,690 pages; 237,070 edits
Coinbase wades into crypto derivatives with deal for futures exchange; Cryptocurrency exchange platform buys FairX, which launched with oil and equities contracts
Nikou Asgari – FT
Coinbase is buying a fledgling futures exchange to gain a foothold in cryptocurrency derivatives, complementing its presence as the biggest US-based spot exchange for digital currencies. The company said on Wednesday it would acquire FairX, which launched last year and is regulated by the US Commodity Futures Trading Commission.
Coinbase’s path to creating a robust and regulated crypto derivatives market
Coinbase is acquiring FairX, a CFTC-regulated derivatives exchange; The acquisition is a key stepping stone on Coinbase’s path to offer crypto derivatives to retail and institutional customers in the US; This is an important step toward Coinbase ultimately making the derivatives market accessible to our millions of customers through an industry-leading, simplified user experience;
Coinbase is committed to providing our retail and institutional customers with the most trusted and complete suite of trading tools to access the cryptoeconomy. As crypto matures as an asset class and the world’s most sophisticated investors deepen their journey into the cryptoeconomy, a healthy, well-regulated derivatives market will be critical for long-term success.
Libor, Long the Most Important Number in Finance, Dies at 52; Bankers used it until the end. Regulators say good riddance after its infamous fall.
Lananh Nguyen and Jeanna Smialek – NY Times
The London interbank offered rate, a number that spent decades as a central force of international finance and was used in setting interest rates on everything from mortgages to student loans, has died after a long battle with regulators. It was 52. Known as Libor, the interest-rate benchmark once underpinned more than $300 trillion in financial contracts but was undone after a yearslong market-rigging scandal came to light in 2008. It turned out that bankers had been coordinating with one another to manipulate the rate, pronounced “LIE-bore,” by skewing the number higher or lower for their banks’ gain.
Robinhood Tells Employees They Can Work From Home Permanently; Retail-trading platform wants to become ‘a remote first company’ as many employers reconsider when they should return to the office
Joseph De Avila – WSJ
Most employees of retail-trading platform Robinhood Markets Inc. HOOD -0.98% will be working remotely on a permanent basis amid a spike in Covid-19 cases that has many companies rethinking their return to the office. Using a primarily remote workforce will help Robinhood tap top talent across the U.S. regardless of where they live, the company said in a blog post Wednesday, describing itself as “a remote first company.” The Menlo Park, Calif.-based company said most employees will no longer be required to make regular trips to the office, while some teams will meet in-person occasionally.
Robinhood is a Remote First Company
We are excited to announce that Robinhood will be staying primarily remote. In December we shared with our employees that our mission to democratize finance for all starts with our people, and that means bringing in and supporting Robinhoodies who can best help drive our mission forward – no matter where they’re based in the country.
Robinhood CFO Doesn’t Plan to Put ‘Meaningful Amount’ of Cash Into Crypto Assets; ‘It’s not lost on us that our customers…would like to see us add more coins,’ Jason Warnick told finance chiefs at the WSJ CFO Network Summit
Nina Trentmann – WSJ
Retail-trading platform Robinhood Markets Inc. doesn’t plan on spending significant amounts of corporate cash on crypto assets anytime soon, despite growing demand from its users for such investments, Chief Financial Officer Jason Warnick said. Speaking at The Wall Street Journal’s virtual CFO Network Summit on Wednesday, Mr. Warnick said, “There aren’t compelling reasons strategically for our business to put any meaningful amount of our corporate cash into cryptocurrencies.” His comments echo those of other finance chiefs—including Twitter Inc. CFO Ned Segal —who said they worry about the volatile nature of some of these assets or limitations around companies’ investment policies.
Coinbase announces ‘nearly the entire company will shut down’ for four weeklong breaks in 2022 to allow workers to recharge; “Given the intensity of our work throughout the year, we think this is the best way to ensure our pace is sustainable for the long term,” said chief people officer L.J. Brock.
Turner Wright – Cointelegraph
Major U.S. crypto exchange Coinbase will be giving its employees one week off each quarter in 2022 to recharge after “long days and long weeks” of intense work. In a Monday blog post, Coinbase chief people officer L.J. Brock said “nearly the entire company will shut down” for four separate weeks this year as part of an experiment in allowing workers to recuperate after completing intense workloads. Brock said the exchange’s employees aren’t necessarily limited to 40-hour work weeks and may have to “pivot at a moment’s notice,” seemingly creating the potential for burnout.
The IRS will ask every taxpayer about crypto transactions this tax season — here’s how to report them
Bill Bischoff – MarketWatch
Cryptocurrencies, also known as virtual currencies, have gone mainstream. That’s for sure. For example, you can use bitcoin BTCUSD, -0.02% to buy a Tesla TSLA, +3.93% and to buy or pay for lots of other things. However, using cryptocurrencies has federal income tax implications. Here’s what you need to know at 2021 tax return time if you made crypto transactions last year.
LiquidityBook Completes Banner Year with Record Hiring Push and Key Wins for Sell-Side and Post-Trade Product
LiquidityBook, a leading provider of cloud-native buy- and sell-side trading solutions, today announced the results of a banner year in 2021, including further worldwide expansion and growth, substantial new business and additional client-centric product updates.
C.E.O.s Were Our Heroes, at Least According to Them; They stepped up in the pandemic “to save the world,” says Marc Benioff of Salesforce. Even as their tax practices and perches kept them above its troubles.
Peter S. Goodman – NY Times
Marc Benioff seemed to be having an amazing pandemic. The lockdowns were adding to his wealth — estimated at more than $10 billion — as his company, Salesforce, tallied record sales of software that allowed people to work from anywhere. The experience was nourishing his soul, delivering a poignant reminder that humanity was really one enormous family, united by its common vulnerability to a virus. And the ordeal was affirming a faith that Mr. Benioff had been preaching for decades: that business leaders were the ultimate guardians of human progress.
BIS, SNB and SIX successfully test integration of wholesale CBDC settlement with commercial banks
Project Helvetia looks toward a future with more tokenised financial assets based on distributed ledger technology coexisting with today’s systems; Swiss National Bank and five commercial banks integrated wholesale CBDC in their existing back-office systems and processes; Tests covered a wide-range of transactions in Swiss francs – interbank, monetary policy and cross-border.
Integrating a wholesale central bank digital currency (CBDC) into existing core banking systems is complex and a key prerequisite for issuance. Phase II of Project Helvetia successfully demonstrates that such integration is operationally possible. Issuing a wholesale CBDC on a distributed ledger technology (DLT) platform operated and owned by a private sector company is feasible under Swiss law.
Crypto-Savings Lawsuit Puts Principles of DeFi to the Test; A suit against PoolTogether Inc., a company associated with a blockchain-based app that gamifies savings by cryptocurrency holders, challenges the DeFi community’s claims that its protocols are autonomous and self-governed
Dylan Tokar – WSJ
The emerging world of decentralized finance offers the holders of cryptocurrency many of the amenities of a modern financial system, under the premise that blockchain technology can cut out the middlemen, replacing flesh-and-blood bankers with autonomous, self-governing computer programs.
Big Banks Band Together to Measure and Manage Climate Risk; A consortium of 19 banks will develop standards to integrate climate risk management throughout their operations
Richard Vanderford – WSJ
A group of large banks, including Bank of America Corp., Wells Fargo & Co. and Royal Bank of Canada, have formed a consortium to jointly address climate-related risks, a move that comes as financial institutions increasingly grapple with the issue. The consortium, formed by 19 banks and the Risk Management Association, intends to develop standards for measuring and managing climate risk, according to an announcement expected later Wednesday.
Australia COVID-19 infections hit record amid runaway Omicron outbreak
Australia on Thursday reported its biggest pandemic caseload with a runaway Omicron outbreak driving up hospitalisation rates as the surge put severe strain on supply chains forcing authorities to ease quarantine rules for more workers.
COVID-Hospitalization Numbers Are as Bad as They Look; Many supposedly “incidental” infections aren’t really incidental, and cannot be dismissed.
Ed Yong – The Atlantic
More Americans are now hospitalized with COVID-19 than at any previous point in the pandemic. The current count—147,062—has doubled since Christmas, and is set to rise even more steeply, all while Omicron takes record numbers of health-care workers off the front lines with breakthrough infections. For hospitals, the math of this surge is simple: Fewer staff and more patients mean worse care. Around the United States, people with all kinds of medical emergencies are now waiting hours, if not days, for help.
Covid Loses Most of Infection Capacity After 20 Minutes in Air
Irina Anghel – Bloomberg
Study indicates distancing and masks help curb infection; Office-like environments seen as safer than humid shower rooms
Coronavirus loses most of its ability to infect shortly after being exhaled and is less likely to be contagious at longer distances, a study from the University of Bristol’s Aerosol Research Centre showed.
Should I Be Wearing an N95 or KN95? Understanding the Evolving Advice on Masks
Madison Muller – Bloomberg
Advice from U.S. authorities on the need for face masks has flipped back and forth since Covid-19 took hold in 2020. In May, the Centers for Disease Control and Prevention said immunized Americans could ditch their masks in most settings. It reversed course in July amid a rise in cases caused by the more transmissible delta variant. Now, with the quickly spreading omicron variant causing a surge in infections, the agency is preparing to update the guidance again as many medical professionals urge people to upgrade their masks to the highly protective N95 or KN95 masks preferred by health care workers.
N95 Mask Prices Hit ‘Ridiculous’ Highs on Speculation Over CDC Guidance; With the omicron variant of Covid-19 spreading fast, Americans are rushing to buy the more-protective face coverings.
Claire Ballentine and Misyrlena Egkolfopoulou – Bloomberg
The potential for a new recommendation from the Centers for Disease Control and Prevention is unleashing a scramble for N95 masks and boosting their prices. The agency is considering changing its guidance to advise that people wear higher-quality masks, according to a Washington Post report. That’s contributing to a surge in prices for gold-standard N95 and KN95 face coverings on sites like Amazon.com.
This Could Be the Beginning of the Pandemic’s End; It’s time to start thinking of new strategies for a new world of endemic Covid.
Mark Gongloff – Bloomberg
You Can’t Spell ‘Pandemic Endgame’ Without ‘Endemic’
At the start of “Station Eleven” (both the excellent novel and the excellent TV show), a pandemic kills 99% of all the people on Earth in the span of roughly an afternoon. The remaining 1% struggle a wee bit to adjust to a new world without a functioning government, grocery supplies or Wordle.
The true toll of the antivax movement; By rejecting modern medicine, antivaxxers have recreated past eras when people died like flies
Simon Kuper – FT
There’s a 13-year-old boy whose antivax father — an intelligent, accomplished man in his early fifties — died last month of Covid-19. Go to the father’s Twitter feed and it’s the usual story: he warns followers that governments have “radicalised”, that Pfizer jabs are perilous and long Covid is an invention, then tweets casually that he has tested positive, before his feed suddenly goes silent, for ever.
Omicron Appears to Have Peaked in U.K., Offering Hope the Wave Is Receding; Cases decline in U.K. and hospital admissions are starting to fall in England
Jason Douglas – WSJ
The U.K. appears to have passed the peak of the latest wave of Covid-19 caused by Omicron, a promising sign that the highly transmissible variant’s impact may be brief, if intense, and fueling optimism that the pandemic may be waning.
Is Omicron Peaking? In parts of the Northeast, it seems to be.
David Leonhardt – NY Times
The number of new Covid-19 cases in New York City rose more than twentyfold in December. In the past few days, it has flattened. In both New Jersey and Maryland, the number of new cases has fallen slightly this week. In several major cities, the number is also showing signs of leveling off.
Exchanges, OTC and Clearing
Full year and December 2021 figures at Eurex
OTC Clearing at Eurex continued its strong showing in 2021 with overall notional outstanding volumes growing by over 20 percent – from 16,560 billion EUR to 20,077 billion EUR – over the full year. Over the same period, average daily cleared volumes grew by 9 percent from 122 billion EUR to 133 billion EUR. Looking at specific products, the Overnight Index Swaps business grew by 169 percent in terms of notional outstanding – from 721 billion EUR to 1,941 billion EUR – and by 74 percent in terms of average daily cleared volumes – from 5 billion EUR to 8 billion EUR. Notional outstanding and average daily cleared volumes for Interest Rate Swaps grew by 36 percent and 20 percent year-on-year, respectively.
Private investors invested 1.35 trillion rubles in Russian securities on the Moscow Exchange in 2021
The number of individuals with brokerage accounts on the Moscow Exchange almost doubled in 2021 and amounted to about 17 million, or more than 10% of the Russian population. They opened 27.7 million brokerage accounts on the Moscow Exchange. The activity of private investors in 2021 reached the highest level in the entire history of observations – more than 2 million people entered into transactions every month (847 thousand in 2020).
Indian investors got access to trading on the Moscow Exchange
Indian investors got the opportunity to make transactions on the markets of the Moscow Exchange. Access to trading in shares, bonds, currency pairs, futures and options for Indian investors is provided by SOVA Capital in the status of an individual clearing member of the Moscow Exchange in partnership with India INX Global Access (a subsidiary of the Bombay Stock Exchange, Bombay Stock Exchange, BSE).
SGX reports market statistics for December 2021
Demand for equity, commodity derivatives increases; Market turnover value of ETFs continues to grow
Singapore Exchange (SGX) today released its market statistics for December 2021. Risk-management demand drove volume gains across equity and commodity derivatives, amid cautious optimism that the global economic recovery remained on track.
Closing speech for ACRA-SGX-SID Audit Committee Seminar by Tan Boon Gin, CEO, SGX RegCo
Thank you everyone for staying with us through today’s seminar. I think after two years of COVID-19, it is easy to be focused on the downsides of the pandemic, such as the safe management measures and other restrictions, work from home versus work from office and so on. But really, I personally feel that there are opportunities beckoning, particularly for companies, financial markets, Singapore.
ICE Midland WTI American Gulf Coast Futures Contract to be Live for Trading on January 24; Magellan and Enterprise Agree to Waive Related Pump Over Fee Between Terminals
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology, and market infrastructure, Magellan Midstream Partners, L.P. (NYSE: MMP), and Enterprise Products Partners L.P. (NYSE: EPD) today announced that the ICE Midland WTI American Gulf Coast (Midland WTI AGC) futures contract is expected to be live for trading beginning January 24.
NYSE Pillar Options Migration: Final End-to-end Testing Opportunity on January 22, 2022
On Saturday, January 22nd, NYSE Arca Options will offer its last end-to-end Production test, including OCC participation and CAT submissions, in preparation for the migration to NYSE Pillar beginning February 7th, pending regulatory approval. Exchange Participants are strongly encouraged to take advantage of this opportunity to allow time to trouble-shoot any potential items that may arise in advance of the migration. Participants wishing to test can register by contacting email@example.com.
The IBEX 35 celebrates its 30th anniversary as the leading brand for the Spanish economy and listed companies
The Spanish GDP has tripled over the period and the value of companies is ten times as high; The index family has been expanded to include more than 80 benchmarks; BME is already working on the launch of new indicators linked to sustainability and ESG investment; IBEX 35 with Dividends has a cumulative annual return of 7.95%, 4 points higher than that of the price-based IBEX 35® alone
On 14 January 1992, the IBEX 35® was launched to serve as a benchmark for the newly created options and futures market. Since then, the Spanish economy has tripled in size in terms of GDP, while the value of the companies in the index has increased tenfold. Tomorrow, the index celebrates its 30th anniversary, cementing its position as the leading brand for the Spanish economy and listed companies and main indicator of its transformation.
— EBS Market Integration Notice: New Content and Updates – CME
— CME Globex Notices: January 10, 2022
— Performance Bond Requirements: Energy & Agriculture – Effective January 13, 2022 – CME
— Application for Spot Call Nonfat Dry Milk and Spot Call Dry Whey Regularity|Application for Spot Call Nonfat Dry Milk and Spot Call Dry Whey Regularity – CME
Options appoints Ted Sturiale as VP of Sales and Business Development in Chicago
Posted by Maria Nikolova – FXNewsgroup.com
Mr Sturiale joins Options with over 20 years of experience selling advanced Capital Markets technology solutions. He has worked with some of the world’s top banking and fintech companies such as Trading Technologies, Redline, Itiviti, Solarflare, Morgan Stanley, and Société Générale to expand their products and services, develop sales channels and drive significant revenue growth.
Robinhood Has Become an Attractive Takeover Target; The online broker’s shares have tumbled 80% from their peak, but its 22 million users are worth something, even if the average account balance is only $3,500.
Jared Dillian – Bloomberg
It’s been quite a year for brokerage firm Robinhood Markets Inc., from a rollicking initial public offering to technical glitches that blocked its customers from accessing their accounts, and from capital raising efforts to questions about how it guarantees the best execution of trades. Today, the shares are languishing at around $15, cutting its market capitalization to about $13 billion from a peak of some $60 billion back in August.
Telstra Appoints Vish Vishwanathan to Head Wholesale Group in the Americas; Telecom Industry Veteran Will Lead Company’s Ambitious Growth Initiatives to Expand Reach and Capabilities for Serving Wholesale Providers Across the Americas region
Telstra has named Vish Vishwanathan as Vice President of its Wholesale group for the Americas. He joins Telstra as the company is entering its latest phase of international growth and network expansion. Vishwanathan will take charge of Telstra’s existing business that serves telecom and satellite providers across North America, spearhead plans to extend the company’s reach across Latin America and expand its services capabilities to satellite operators.
London start-ups attract record venture capital funding; The investment reflects a wider influx of VC money into the global tech sector
Cristina Criddle – FT
Tech start-ups in London raised a record $25.5bn in funding last year, more than double the total in 2020, against a backdrop of investors pouring unprecedented amounts into start-ups globally.
DAS Trader revs up data provision with new partnership; The firm has partnered with Jersey-based QUODD Financial Information Services for OPRA and corporate actions data.
Laurie McAughtry – The Trade
Everyone knows that data is the new gold, but even as access gets easier, the market for it gets ever more competitive. DAS Trader, a direct access trading technology firm providing electronic trading solutions to private online broker dealers, clearing firms and financial firms, has teamed up with financial market data provider QUODD to access its real-time offering of Options Price Reporting Authority (OPRA) data.
Tier1 appoints industry expert as managing director for North American sales; Incoming director brings over 10 years’ experience to the firm, having established herself as a leader in the compliance and financial services industry.
Wesley Bray – The Trade
Client relationship management (CRM) platform provider Tier1 Financial Solutions has appointed a new managing director for North American sales. Megan Howe will be responsible for driving compliance software and buy-side CRM sales in North America, delivering various client lifecycle management solutions.
The key to cybersecurity success: Unity
Anuj Goel – Security Magazine
For organizations looking to defend themselves more effectively against cybersecurity threats in 2022 and beyond, creating unity is a key to their success. The various factions and teams that exist within many cybersecurity programs today need to come together and collaborate more closely in order to meet the oncoming assaults launched by a growing number of bad actors.
Stop Rolling The Dice: Make PtaaS The Core Of Proactive Cybersecurity Programs
Caroline Wong – Forbes
Cyberattacks are a lot like dice; each roll is independent from the next. And without proactively instituting preventative security controls, organizations are rolling the dice and leaving their luck up to cybercriminals, who will stop at nothing to uncover new ways to exploit vulnerabilities that leave organizations at their mercy (think high-profile security breaches like Colonial Pipeline and JBS of 2021 and the long line of cybersecurity attacks before and after them).
Cybersecurity labels for consumer products could be on the way
Joseph Marks – The Washington Post
An obscure division of the Commerce Department is working on cracking one of the toughest problems in cybersecurity: Making consumers care whether their Internet-connected devices are hackable or not.
It’s a big challenge because most consumers only have a foggy understanding about which products are most secure against hacking. Even if they understood better, experts fear security would still rank far lower in buying decisions than factors like price and features.
The ESA wants you to hack its satellite for cybersecurity reasons
Allison Murray – ZDNet
The European Space Agency (ESA) is inviting people to hack a satellite in the name of cybersecurity.
Applications are open through Feb. 18 to submit ideas on how someone would go about hacking the OPS-SAT satellite’s payloads and/or experimental processing core, as well as how to detect and mitigate an attack. Potential hackers will have only six minutes of controlled communications to the OPS-SAT to demonstrate their idea.
AcreTrader Raises $40 Million in Series B Funding to Fuel Strategic Growth; Investment Enables Company to Further Expand World-Class Land Transaction Platform
Oversubscribed round led by Anthemis Group and joined by existing investors Jump Capital, Narya Capital, RZC; Investments, Revel Partners, and Revolution’s Rise of the Rest Seed Fund
AcreTrader, the technology company that dynamically connects investors, land, and farmers, today announced it has raised $40 million in Series B funding to further empower its customers to buy and sell land smarter. Anthemis Group, a global platform, led the round, joined by all existing institutional investors in the business. The round brings AcreTrader’s total funding to $58 million since inception.
Ideal Partners with Barracuda
Colin Lambert – The FullFX
Decision intelligence firm Ideal is partnering with Ion Group’s Barracuda FX to provide its performance analytics and supervisory risk management solutions to the latter’s client. The firms say the partnership provides clients with turnkey access to analytics and actionable insights.
Bitcoin-Trading President Likely Lost Money for El Salvador
Michael McDonald – Bloomberg
El Salvador’s President Nayib Bukele is probably the only head of state in the world who uses public funds to trade Bitcoin with his phone. So far, it appears he’s lost money. That’s because the process is shrouded in secrecy, though the country has bought at least 1,391 Bitcoins, based on what the 40-year-old Bukele has said on Twitter.
Zero Hash raises $105 million in series D round
Lucy Harley-Mckeown – The Block
Crypto services startup Zero Hash announced on Wednesday it has raised $105 million in a series D fundraising round.
Cryptocurrency is suddenly everywhere — except in the cash register; While interest in crypto has exploded, few people are using it for its intended purpose: to pay for things
Tory Newmyer – Washington Post
Billionaire tech executive Michael Saylor has called bitcoin “the seminal invention of the human race.” His website describes it as “a bank in cyberspace” offering a “simple, & secure savings account to billions of people.” He recently claimed ownership of 17,732 bitcoin worth about $740 million.
Investors are paying millions for virtual land in the metaverse
Chris DiLella and Andrea Day – CNBC
It’s no secret the real estate market is skyrocketing, but the Covid pandemic is creating another little-known land rush. Indeed, some investors are paying millions for plots of land — not in New York or Beverly Hills. In fact, the plots do not physically exist here on Earth. Rather, the land is located online, in a set of virtual worlds that tech insiders have dubbed the metaverse. Prices for plots have soared as much as 500% in the last few months ever since Facebook announced it was going all-in on virtual reality, even changing its corporate name to Meta Platforms.
The Metaverse Ideas From CES 2022 That We’re Most Excited – and Confused – About
Andrew R. Chow – Time
Over two thousand companies descended on Las Vegas last week for the annual tech exhibition CES, which is organized by the Consumer Technology Association. Given the way that the last year has gone you can probably guess the conference’s buzzword.
NFTs aced their audition and are coming to Broadway; Whatever that means.
Andrew Paul – Input
It’s been a grueling and months-long audition process, but they finally made the cut and are heading for the main stage: NFTs are coming to Broadway, everyone! Per Playbill (so you know it’s legit), Ross Golan’s The Wrong Man is slated to become “the world’s first non-fungible token (NFT) musical” later this year via the Terra Virtua platform… Yeah. We’re a bit confused on that one, too.
China to create own NFT industry based on state-backed blockchain infrastructure, main developer says; The BSN-Distributed Digital Certificate does not support crypto-transacted NFTs, and will allow businesses and individuals to build apps and portals to manage tokensl; The new infrastructure has the potential to disrupt the current industry, having already attracted more than 20 partners
Coco Feng – South China Morning Post
China’s state-backed Blockchain Services Network (BSN) plans to roll out infrastructure at the end of this month to support the deployment of non-fungible tokens (NFTs), a major step to creating a Chinese NFT industry that is not linked to cryptocurrencies.
‘Britcoin’ project mocked by Lords as a ‘solution in search of a problem’; Lords committee warns that Bank of England officials have overstated the potential benefits of a central bank digital currency
Tim Wallace – Telegraph
A Treasury and Bank of England plan to create a central bank digital currency is “a solution in search of a problem” and poses serious risks to financial stability, a Lords committee has warned. Peers, including the former Bank governor Lord King, fear that officials have overstated the potential benefits of a “digital pound”, or CBDC.
2021 Was Just The Beginning: Paxos Will Accelerate Mainstream Digital Asset Adoption in 2022; 360M+ consumers can now access digital assets via Paxos Infrastructure
Becky McClain – Paxox
Paxos has a clear and ambitious mission: to replatform the financial system so that any asset can move anywhere, at any time, in a trustworthy way. The global financial system is complex, expensive and archaic. It takes too much time and money to transfer value from one person to another; did you know that when you pay for a coffee with a credit card at your local shop, it takes two to five days for the business owner to be paid? Clearly, our work is cut out for us. And that’s why Paxos is rebuilding the underlying plumbing (or infrastructure) so that all assets are as easy to move as a text message or email – empowering anyone to do it inexpensively within fractions of a second.
Swiss Digital-Currency Experiment Gains Momentum in Second Test
Bryce Baschuk – Bloomberg
SNB tests digital currency swap with five commercial banks; Still no plans for SNB to issue wholesale digital currencies
The Swiss National Bank and partner organizations said they successfully conducted the second stage of their experiment to process digital currencies within the country’s financial system.
Digital Currency Race Prompts Trials, Scrutiny by Bank of Israel
Daniel Avis – Bloomberg
Policy makers expand research on central bank digital currency; Regulators worldwide confront a future without physical cash
The Bank of Israel, already used to testing the limits of monetary policy, is eager not to fall behind in crossing a new frontier for central banks. Policy makers in Jerusalem are expanding their research into central bank digital currencies, or CBDCs, and sounding out stakeholders about risks and benefits, according to Yoav Soffer, head of the bank’s digital shekel project. But its roll-out still remains hypothetical given questions that range from the token’s cost to the impact on the banking system, Soffer said.
Visa to Test Central Bank Digital Currencies With Cards, Wallets
Akayla Gardner – Bloomberg
Platform is designed to test CBDCs and Visa products; Leading card payments firm in talks with central banks
Visa Inc. joined its rival Mastercard Inc. in offering central banks a way to test retail applications for digital currencies they might issue.
BitMEX Hires Ex-Coinbase Executive Hughes as Head of Risk
Joanna Ossinger – Bloomberg
Cryptocurrency exchange BitMEX, whose operators last year agreed to pay up to $100 million to settle allegations of allowing illegal trading and breach of anti-money laundering rules, hired former Coinbase Global Inc. executive Marcus Hughes as chief risk officer.
Jack Dorsey creates a fund to address Bitcoin developers’ ‘legal headaches.’
Ephrat Livni – NY Times
Jack Dorsey has announced the creation of a nonprofit group, the Bitcoin Legal Defense Fund, to help developers of the original cryptocurrency facing “legal headaches.” In an email sent to the developers’ mailing list on Wednesday, Mr. Dorsey, a Bitcoin evangelist, wrote that “litigation and continued threats are having their intended effect; individual defendants have chosen to capitulate in the absence of legal support.”
Coinbase Buys FairX to Offer Crypto Derivatives in US
Coinbase will buy U.S. based derivatives platform FairX, which could allow the company to offer crypto derivatives products in the U.S., CoinDesk reported Wednesday (Jan. 12). That would be a shift from the current situation, where only a few exchanges let U.S. investors to trade bitcoin and ether futures. Cash-settled products have usually been the most popular, and longest-available, products.
House of Lords warns Bank of England on risks of state-backed digital currency; Peers’ report flags ‘far-reaching consequences’ of central bank competing with commercial lenders
Chris Giles – FT
The British parliament and not the Bank of England must decide whether to introduce a state-backed digital currency because the move would have “far-reaching consequences”, an influential committee of the House of Lords warned on Thursday.
Kazakhstan turmoil shows double-edged impact of commodity surge; Rising prices spur political unrest but also investor interest
Charlie Robertson – FT
The best-performing frontier stock market of 2021 was Kazakhstan, up 81 per cent in US dollars. It outperformed even the industrialising favourite, Vietnam, which is seen by many as “China without the geopolitical risk”.
CFTC Issues Order Suspending Mississippi Man’s Registrations as a Commodity Trading Advisor and Associated Person
The Commodity Futures Trading Commission announced today that it issued an order suspending the registrations of Ted Brent Alexander of Jackson, Mississippi. The CFTC filed a Notice of Intent to Suspend or Modify registration under Section 8a(11) against Alexander on September 2, 2021. [See CFTC Press Release No. 8423-21]. The CFTC action is based on a federal criminal indictment charging Alexander with six felony counts of securities and commodities fraud, conspiracy, and wire fraud.
Boston Fed Announces 2022 Board of Directors; Paxson of Brown University, Thomas of Rapid7 remain chair & deputy chair; Tuli of Leader Bank joins board
Boston Federal Reserve
The Federal Reserve Bank of Boston on Wednesday announced its 2022 board of directors, effective Jan. 1. Christina Hull Paxson, president of Brown University, and Corey Thomas, chair and chief executive officer of Rapid7, have been reappointed as chair and deputy chair.
Member obligations under NFA Bylaw 1101 and Compliance Rule 2-36(d) with respect to CPOs/CTAs exempt from registration
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. Persons that fail to file the affirmation notice by March 1, 2022, will be deemed to have requested a withdrawal of the exemption and, therefore, may be required to be registered and NFA Members.
Supervisory flexibility on the short selling indicator
We are putting in place temporary measures for the reporting of the short selling indicator in transaction reports while we consider changes to the UK transaction reporting regime.
Investing and Trading
Euro/dollar crosses embrace RFRs, while other currencies lag; EURSTR becomes new standard for euro cross-currency swaps; CAD and AUD stick with legacy rates Risk.net montage
Helen Bartholomew – Risk.net
The cross-currency swap market is rapidly ditching legacy interest rate benchmarks in favour of overnight risk-free rates (RFRs), with some currencies making the switch even when there is no regulatory obligation to do so. Since the start of the year, interdealer trades in euro/dollar cross-currency swaps have almost exclusively referenced the secured overnight financing rate (SOFR) and the euro short-term rate (EURSTR). While there is a regulatory ban on new US dollar Libor issuance, the market
Why You Should Avoid Value and Reopening Stocks, According to a Star Fund Manager; Terry Smith, who manages about $39 billion, recommends companies with higher gross margins that can outperform as inflation takes hold.
Terry Smith – Bloomberg
British fund manager Terry Smith is steering clear of the rotation into value stocks and companies that will benefit from economic reopenings. The head of the giant Fundsmith Equity fund at Fundsmith LLP said in his annual letter to investors that timing the market when such equities will outperform is difficult. Additionally, the market may have already priced in the benefits of post-pandemic economic reopenings for firms such as airlines and hotels.
Reclaim shareholder power and reshape companies; Personal investors can impose their own principles on businesses by revitalising voting rights
Merryn Somerset Webb – FT
If you are interested in Covid conspiracy theories you will have heard no end of claims about the nasty capitalist (or worse) motives of the big pharmaceutical companies. They have no interest in your health. They are nothing but profit machines, dedicated to churning out medications and vaccines of dubious efficacy and possible high toxicity with a view to making money and then some more money at your expense.
Asos plans move to main market of London Stock Exchange; Online fashion group seeks to attract more investors after 20 years on Aim
Ian Johnston – FT
Shares in Asos jumped after it said it would move to the main market of the London Stock Exchange following 20 years on Aim, as the online clothes retailer seeks to pull in new investors.
Retail surge preventing over half of institutions from meeting options trading objectives, study finds; Study by Coalition Greenwich found that 54% of institutions said the retail activity surge was negatively impacting their ability to achieve their objectives in the options markets.
Annabel Smith – The Trade
A surge in retail trading activity has caused US options trading volumes to reach record highs and is blocking institutions from achieving their investment objectives, a study by Coalition Greenwich has found.
Environmental, Social and Corporate Governance
2021 Xpansiv Carbon Volume Rises 288% Driven by Surge of Corporate Net-Zero and ESG Demand
Carbon volume on Xpansiv market CBL exceeded 120M; market share doubled to 36%; CBL GEO®—the world’s first voluntary carbon offset benchmark contract—rallied 899% on year; Launch of groundbreaking digital platform that enables commodity valuation by ESG factors, creating Digital Natural Gas® and Methane Performance Certificates™ as new tradable instruments.
Xpansiv, the global marketplace for ESG commodities, announced extraordinary progress in 2021, including robust growth across its exchanges and the successful launch of a digital platform for valuing commodities based on critical ESG data. Starting with natural gas, this comprehensive platform incorporates factors that include methane emissions and water usage—registered using independently verified source data—to
Global Carbon Price Could be ‘Game Changer,’ BOE Official Says
Reed Landberg – Bloomberg
Catherine Mann says emissions rules could spur investment; Inflation risk from adding to the cost of using energy
A Bank of England policy maker said adopting a global price on fossil fuel pollution could spur investment and productivity that would lift the world economy out of its torpor.
How Web3, NFTs, And DAOs Could Help Boost Climate Action; Climate concepts are starting to emerge from new decentralization tools. Should we embrace them?
Nathaniel Bullard – Bloomberg
Last week I shared thoughts on how the coming massive expansion of distributed solar and battery storage will create opportunities for decentralized business models that allow owners to transact with each other. Decentralization is promising, I concluded, but will still require centralized control for reliability. There is also a lot more to decentralization, with a host of concepts to consider and potentially embrace.
Vanguard fires fresh salvo in asset management fee war; Group to cut costs on investment funds by $1bn over next four years, CEO Tim Buckley says
Chris Flood – FT
Vanguard has fired the latest shot in a fee war at a time when cheap passive investing strategies are booming and active managers have come under pressure for their lacklustre performance. Chief executive Tim Buckley said Vanguard would cut $1bn from its investment fund fees by 2025 after reducing its charges by $140m last year.
India Is Tweaking Rules to Ensure Success of Its Biggest IPO
Filipe Pacheco and Nupur Acharya – Bloomberg
From adjusting capital-markets rules to sending phone messages and publishing newspaper advertisements, authorities and executives are leaving no stone unturned in trying to ensure Life Insurance Corp. of India’s record initial public offering is a success.
Huge U.S. Investments at Risk in Kazakhstan Unrest; Western companies drawn by abundant natural resources are assessing their exposure after violent protests
Georgi Kantchev, Christopher M. Matthews – WSJ
For years, Kazakhstan’s vast natural riches and relative political stability have made the country a ripe target for U.S. investments. The current wave of protests, which has led to dozens of deaths, is now making those investments a riskier proposition.
Europe’s Bond Sales Just Set a New Record
Hannah Benjamin and Priscila Azevedo Rocha – Bloomberg
Companies are moving to raise cash before rates go up; This week’s tally exceeds a record set two years ago
Europe’s debt market is breaking records with $107 billion of sales in a single week as borrowers rush to get ahead of rising interest rates. Portugal, Spain and discount airline Wizz Air have all raised funding this week. The tally beats a previous record set in early 2020, when firms loaded up on cash just before the pandemic took hold.