Crypto Exchanges Will Face More Scrutiny From SEC, Gensler Says

Jan 20, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

William J. Brodsky was nominated by a former law school classmate for a job in Washington, D.C., despite having once defeated that classmate for class president of the Syracuse University College of Law. Of course, that classmate was Joe Biden, the current President of the United States of America, and Biden nominated Brodsky yesterday to be a board member of the Securities Investor Protection Corporation. They are life-long friends from their days at Syracuse’s law school.

It has long been rumored, even as far back as the Obama Administration, that Biden wanted Brodsky in a significant financial regulatory role in Washington. However, the timing was not right for Brodsky then as he was preparing to take the CBOE public in 2010. Now Brodsky is the chairman of Options Solutions with his son Michael Brodsky, who is CEO, and pioneering options journalist Steven M. Sears, who is president and COO.

Those of you who have been to an ALTSO Rocktoberfest event in recent years have seen the stage graced by Dina Bair of WGN TV as the master of ceremonies. Bair is also involved in another charity, one that she co-founded, and this one also involves limbs and music, but in a much more dynamic and integrated way. The charity is a “Dancing with the Stars” type of competition, appropriately called “Dancing with Chicago Celebrities.”

Dancing With Chicago Celebrities is a 501(c)(3) not-for-profit charity that focuses on one thing: raising money to fight breast cancer in the Chicagoland area through the power and partnership of ballroom dancing. Each year they bring together hundreds of generous people for one night of dancing.

Here is the fun part, they created a corporate challenge part several years ago. Typically twelve corporations are recruited to put forward their twinkle-toed executives, who will be given free dance lessons by a pro at Arthur Murray Dance studios. Their companies of course sponsor them, and their friends raise funds on their behalf, which all goes to local research. From the 12, six are selected, and then from the six, three finalists are selected before a single winner emerges. Recent corporate winners have come from Accenture, UBS, Home Depot, Ernst & Young among others. Which of our Chicago financial market corporate leaders are willing to jump onto the dance floor and take a twirl? Why do I have visions of ADM’s Tom Kadlec dancing away with the title?

As with many events, they canceled their 2020 event and went virtual in 2021. However, they are returning to a live event on March 25, 2022 at the Hyatt Regency on Wacker in Chicago. For more information, visit their website at

It is 2022 and that means it is time for your 2022 anti-money laundering training update. Our friends at Exchange Analytics are offering a 2022 AML training course featuring a role-based design meant to optimize the learning experience for users with different roles at financial services firms, including front office, supervisory or back office. You can learn more HERE.

Barchart has named Mike Driscoll as head of commodity sales. Driscoll joins Barchart from EFC Systems.

Broadway has appointed Brad Small as head of product. He joins Broadway from Bloomberg, where he was head of fixed income analytics.

If I cut the price of cauliflower in half, would you eat more of it? Well, the U.K. has just that opportunity as some bad growing conditions have forced growers into a late harvest, flooding the market with an excess of supply of one of my least favorite vegetables.

The latest cull news is a fowl one, this from France, where they are culling poultry and waterfowl due to an outbreak of bird flu. Thank goodness we don’t eat hamster livers.

We have an interview with Laura Harper Powell of the SEC and Bruce Tupper of CoinReg Tech coming out soon. They wrote a chapter of a book written by a number of authors for Risk Books titled “Regtech, Suptech and Beyond.” Their chapter focuses on CFTC regtech implications for virtual currency trading. Tupper says in the interview that the SEC will make the virtual currency regulatory landscape a lot more clear through enforcement actions this year.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


Registration is now open for Global Investor Group’s Trading Amsterdam conference on April 21, 2022. Themes for this year’s edition include: Understanding the impact of the Mifid 2 Review; Financing the climate transition and net-zero pathways; MiCA: One license to rule them all; and Rise of the retail army. Registration is complimentary to all representatives from banks brokerages, funds, asset management and proprietary trading firms and CTAs. You can go here to register.~SR



Schwab CEO Sees Brokerage of the Future Looking More Like Uber
Annie Massa – Bloomberg
Financial firms need to take more cues from Silicon Valley, according to Charles Schwab Corp. Chief Executive Officer Walt Bettinger. Consumers want their banks and brokerages to offer technology with the same level of personalization they get from ride-hailing and food-delivery apps, Bettinger said in a wide-ranging interview after Schwab reported fourth-quarter results this week.

***** Maybe they can put a map on each order and show how it is being routed and the time it takes to get to the next stop, just like Uber. It would be nice to know that the driver of my order is not taking the long way to get there.~JJL


World’s Safest Company Bonds Have Worst Start to Year in Decades
Tasos Vossos – Bloomberg
Global high-grade index falls 2.2% since the start of 2022; IG bonds face double hit of wider spreads, higher rates
The safest corporate bonds in the world are having their worst start to the year in just over two decades as investors brace for tighter monetary policies. A global index of investment-grade company debt has posted total return losses of 2.2% since the start of the year, the most since data going back to 2000. The gauge is faring worse than all others in the category of credit securities outside of emerging markets.

***** I would expect nothing less than a headline like this. What is up is down.~JJL


Why Lloyd’s cannot be sentimental about its iconic City building; Potential move symptomatic of decline of face-to-face market trading
Cat Rutter Pooley – FT
It should be easy to avoid sentimentality when it comes to a building some occupants called “Prozac Towers”. Yet Lloyd’s of London’s inside-out building has that effect, even if the insurers who’ve inhabited it over its 36 years grumble about low ceilings and a lack of natural light for those toiling in the galleries above the grand underwriting room.

***** Does anyone remember going to the office to work? ~JJL


Wednesday’s Top Three
Our top story Wednesday was White House to distribute 400 million free N95 masks starting next week, from The Washington Post. (The CDC has stated that well-fitting respirators, such as the N95 masks approved by the National Institute for Occupational Safety and Health, “offer the highest level of protection” in reducing the spread of the virus, compared with cloth and other masks, according to the article.) Second was Wall Street Traders Muscle Into the Middle of Crypto, from Bloomberg Businessweek. And third was another cryptocurrency story, The New York Times’ Tales From Crypto: A Billionaire Meme Feud Threatens Industry Unity, about a dispute over “web3” between Jack Dorsey and Marc Andreessen.


MarketsWiki Stats
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MarketsWiki Statistics


Lead Stories

Crypto Exchanges Will Face More Scrutiny From SEC, Gensler Says
Ben Bain – Bloomberg
Crypto exchanges are set to be a primary focus of the U.S. Securities and Exchange Commission’s crackdown on digital assets in 2022. SEC Chair Gary Gensler said on Wednesday that he’s hopeful that trading platforms will take steps in coming months to be more directly regulated by Washington’s financial regulators. The additional scrutiny is crucial for crypto investors to get the types of protections they get when trading stocks or other assets, according to Gensler.

Bank of Russia Seeks to Outlaw Mining and Trading of Crypto
Evgenia Pismennaya and Andrey Biryukov – Bloomberg
Central bank proposed a far-ranging ban in a report Thursday; Russia’s FSB is also pushing for a ban on cryptocurrencies
The central bank of Russia, the third-biggest crypto mining nation in the world, proposed a blanket ban on the use and creation of all cryptocurrencies domestically. Cryptocurrencies bear the hallmarks of a pyramid scheme and undermine the sovereignty of monetary policy, posing a threat to the Russian financial system, the central bank said in a report published Thursday.

Top Wall Street banks paid out $142bn in pay and benefits last year; Investors fret over jump in expenses amid war for talent at largest US lenders
Joshua Franklin and Imani Moise – FT
Wall Street’s leading banks increased pay by nearly 15 per cent last year as they fought a war for talent that is expected to drag on as long as dealmaking remains buoyant. JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America disclosed in recent days that they had handed out $142bn in pay and benefits in 2021, up from $124bn in 2020, in an effort to keep their top bankers satisfied and cope with a global rise in wage inflation.

Singapore Kicks Off New Era of SPACs in Asia With String of Listings; Three Temasek-linked deals seek to raise a total of $370 million
Jing Yang – WSJ
Three SPACs are making their debuts in Singapore this month, as the blank-check company framework gets a reboot in Asia. On Thursday, Vertex VRTX -0.10% Technology Acquisition Corp. started trading after raising 200 million Singapore dollars, the equivalent of $148 million. The company is the first special-purpose acquisition company to list in the Southeast Asian city-state since such listings were allowed in September last year. It is sponsored by Vertex Venture Holdings Ltd., the venture-capital arm of state investment company Temasek Holdings.

Thanks, Wall Street, But We Have Enough SPACs Now; The blank-check market is oversaturated and recent deals have performed abysmally. Time for a breather and a rethink.
Chris Bryant – Bloomberg
Wall Street has an unfortunate habit of pushing financial innovations to such extremes that they break. This is essentially the problem facing special purpose acquisition companies: They’ve oversaturated the market and are now dysfunctional.

Central Banks Face a Moment of Truth on Crypto; Europe and the U.S. might have to pick up the pace if emerging-market digital-currency projects start to bear fruit.
Lionel Laurent and Marcus Ashworth – Bloomberg
The head of the Bank for International Settlements, Agustin Carstens, recently set out a dark vision for our financial future, quoting Goethe’s “Faust” and claiming that the “soul” of money was at stake. He warned that the proliferation of unregulated cryptocurrencies and the spread of Big Tech firms into payments risked damaging consumer trust and splitting the monetary system. To build a safer alternative, he said, central banks should issue digital cash, which would serve as a bedrock for private-sector payments technology while also curbing the industry’s rent-seeking excesses.

Inside Crypto’s Plan to Retool the Internet
Olga Kharif and Nate Lanxon – Bloomberg
Crypto enthusiasts don’t only dream of revolutionizing the world of money. They want to reinvent the World Wide Web. That vision, which goes by the name of “Web3,” is of a decentralized environment built on crypto technology in which swarms of collaborators take back control of the web from giant tech companies. It’s a threat that those tech firms — including Facebook owner Meta Platforms Inc. and Twitter Inc. — are starting to take seriously.

Clearsteam and EuroCCP launch pan-European post-trade connection
EuroCCP-cleared equities and ETFs eligible for settlement via Clearstream Banking S.A. ; Freetrade first user for several European markets
Clearstream and EuroCCP have launched a new pan-European post-trade connection, making exchange-traded equities and ETFs which are cleared via EuroCCP eligible for settlement via Clearstream Banking S.A. Centrally cleared and settled transactions have been in continuously increasing demand across the globe, providing additional safety to complex cross-border transactions. Via Clearstream’s Investor CSD solution, participants can settle their transactions for all T2S markets and the international market within one account, gaining additional liquidity and efficiency for pan-European transactions.

Russia’s central bank proposes ban on crypto trading and mining; Digital currencies display ‘aspects of financial pyramids’ and could ‘service illegal activity’, say policymakers
Max Seddon and Eva Szalay – FT
Russia’s central bank has proposed outlawing all cryptocurrency operations in the country, one of the world’s biggest centres for mining digital tokens. Under the draft proposals, published in a 36-page report on Thursday, Russia would ban all cryptocurrency issuance and operations, stop banks from investing in cryptocurrencies, block exchanging crypto for traditional currency, and introduce legal liability for using crypto in purchases.

Competition for Compliance Officers Intensifies Amid Regulatory Pressures; In a tight labor market, businesses are luring compliance staff with salary increases, remote-working opportunities and company equity
Mengqi Sun – WSJ
A labor-market squeeze and evolving regulatory pressures are driving demand for compliance officers. Competition for such talent has heated up in recent months as companies fear they will be short-staffed at a time of rapid growth and increasing regulatory scrutiny, and businesses are luring compliance staff with salary increases, remote-working opportunities and company equity. “It’s all hands on deck for corporations to attract the talent,” said Paul C. McDonald, a senior executive director at human resources consulting firm Robert Half International Inc. “They are looking to pay the most they can, and with benefits and in perks the best they can.”

SEC’s Gensler wants crypto exchange regulation in 2022, warns on stablecoin
Jennifer Schonberger – Yahoo Finance
Securities and Exchange Commission (SEC) Chairman Gary Gensler said on Wednesday hopes this will be the year the agency regulates cryptocurrency exchanges. As lawmakers and the crypto industry’s major players debate how the booming asset class should be overseen, Washington’s regulatory agencies have been at the forefront of those discussions. A number of proposals are floating around Congress and the Executive branch, yet it’s unclear whether 2022 will see any of them get implemented.

Hedge Fund Fees in Crosshairs as Gensler Lays Out SEC’s 2022 Agenda
Ben Bain – Bloomberg
Gary Gensler is putting hedge funds and private equity firms on notice that the fees they charge clients are going to draw more scrutiny from Wall Street’s main regulator in 2022. The U.S. Securities and Exchange Commission will look at what fund managers charge as part of a broader effort to boost efficiency, competition and transparency in markets, Gensler said Wednesday. The comments follow similar remarks the SEC chief made last year when he took aim at hedge fund fees, including the long-standing 2-and-20 model for charging clients.

Gemini Acquires Trading Technology Platform Omniex, Launches Gemini Prime
Today, we are pleased to announce the acquisition of Omniex, a trading technology platform that provides order, execution, and portfolio management system solutions for institutional crypto trading. The acquisition enables Gemini to publicly launch Gemini Prime, a crypto prime brokerage offering that has been supporting a select client base over the past year.

FTX US Derivatives Announces Board of Directors
FTX US Derivatives
FTX US Derivatives (“the Company”), a Commodity Futures Trading Commission (CFTC) regulated digital asset futures & options exchange and clearinghouse, today announced the members of the Company’s Board of Directors. Larry E. Thompson has been named as Chairman of the Board and will be joined by professionals from the traditional finance, crypto and regulatory landscapes. Since launching in 2017, FTX US Derivatives, previously known as LedgerX, has made crypto-related options and swaps contracts available to both retail and institutional investors 24/7. The Company pioneered bitcoin mini contracts in the U.S. and its offerings include physical settlement of all contracts, block trading and algorithmic trading opportunities for institutional investors, and direct access for all traders.

BlackRock’s Larry Fink says the old world of work is ‘gone’ and that’s why everyone is quitting
Juliana Kaplan – Business Insider
We’re in a new world of work, according to BlackRock CEO Larry Fink — and he says that’s a good thing. In his annual letter to CEOs, Fink touched on everything he thought was “vital to driving durable long-term returns” and helping the company’s clients reach their goals. One trend he highlighted was the record-breaking number of workers quitting.

Broadway Appoints Brad Small as Head of Product; FICC Veteran Joins Executive Team to Drive Product Vision and Planning and Extend Global Team
Broadway, a leading provider of high-performance front-office solutions, today announced the appointment of Brad Small as Head of Product. Small joins Broadway’s expanding Executive Team to steer the product vision, planning, strategies and projects for Broadway’s software solutions. As part of his role, he will also work closely with Broadway’s global clients and industry partners to ensure they stay on the cutting edge of innovation in today’s evolving fixed income market.

Credit Suisse’s Fix-It Banker Lost His Standing as a Role Model; António Horta-Osório was supposed to guide the bank out of crisis, but resigned after being accused of breaking Covid rules.
Marion Halftermeyer and Ambereen Choudhury – Bloomberg
From the day he took over as chairman at Credit Suisse Group AG in May of last year, António Horta-Osório made no secret that he planned to take a tough, hands-on approach to the role. In his decades running financial institutions, he’d never experienced a bank in crisis quite like Credit Suisse, he said at the annual shareholders meeting.


Prior COVID infection more protective than vaccination during Delta surge -U.S. study
Julie Steenhuysen and Manas Mishra – Reuters
People who had previously been infected with COVID-19 were better protected against the Delta variant than those who were vaccinated alone, suggesting that natural immunity was a more potent shield than vaccines against that variant, California and New York health officials reported on Wednesday.

New Government Website for Ordering Covid Tests Is Up and Running; Visitors can go to and click through to a Postal Service web page where they can order four tests per household, free of charge.
Sheryl Gay Stolberg and Lola Fadulu – NY Times
The Biden administration’s new website allowing people to order up to four free at-home coronavirus tests quietly went live on Tuesday — a day in advance of its formal launch — and demand already appeared to be significant.

Starbucks suspends vaccine, test requirement after U.S. court ruling
Starbucks Corp suspended COVID-19 vaccine-or-test requirement for U.S. employees that had been mandated by the government, according to a memo sent to workers on Tuesday, following an adverse U.S. Supreme Court ruling.

A Vaccine to Prevent All Covid Is Within Reach. Here’s How to Grab It; Drugmakers are playing omicron whack-a-mole when the focus should be on a new generation of pan-coronavirus shots.
Lisa Jarvis – Bloomberg
Pfizer Inc. and Moderna Inc. are starting to churn out doses of omicron-specific vaccines, and they say they could have data on whether the shots are effective as soon as March. But is this the best way to build and maintain protection against Covid-19?

Exchanges, OTC and Clearing

EuroCCP and Clearstream expand post-trade pan-European connection following Freetrade launch; All exchange traded equities and exchange traded funds (ETFs) cleared via EuroCCP will now be eligible for settlement on Clearstream Banking.
Annabel Smith – The Trade
Clearinghouse EuroCCP and settlement infrastructure provider Clearstream have launched a pan-European connection to streamline post-trade operations for investors on the continent. Through the expanded connection, exchange traded equities and exchange traded funds (ETFs) cleared via EuroCCP will now be eligible for settlement on Clearstream Banking.

Euronext Lisbon Awards – 11th edition; Euronext distinguishes Portuguese capital market participants
Euronext today announced the list of nominees and winners of the 11th edition of the Euronext Lisbon Awards. Created in 2011, the Euronext Lisbon Awards distinguish issuers, financial intermediaries, and other institutions and individuals that, in the year prior to the award, stood out in the capital market.

Euronext Brussels Awards 2021
Euronext Brussels awarded the best performing listed companies and market members during its New Year’s event. This year’s winners are:

468 SPAC II SE has been listed on the Regulated Market in Frankfurt since today
Deutsche Börse Group
468 SPAC II SE (ISIN: LU2380748603 ) has been listed on the Regulated Market ( General Standard ) of the Frankfurt Stock Exchange since today . The company is a SPAC – a Special Purpose Acquisition Company. According to the issuer, the aim is to invest in a European company in the fields of consumer technology, software and artificial intelligence within a specified period of time.

Nasdaq Fines SpeedRoute $450,000 for Market Access and Supervision Violations
The Nasdaq Stock Market, LLC (“Nasdaq”) today announced that it censured SpeedRoute LLC (“SpeedRoute”) and fined the firm $450,000 for violating various provisions of Rule 15c3-5 of the Securities Exchange Act of 1934 (known as the Market Access Rule) over a nearly five-year period, from January 2017 through November 2021. As a result of these violations, the Firm failed to prevent the transmission of numerous erroneous orders, resulting in the filing of 30 clearly erroneous execution petitions.

SGX RegCo issues Trade with Caution alert on shares of Metech International Limited
Singapore Exchange Regulation (“SGX RegCo”) urges investors and potential investors to exercise caution when dealing in the shares of Metech International Limited (“Metech”). The share price of Metech rose from $0.245 on 1 November 2021 to $0.375 on 21 December 2021, a rise of $0.125 or 51%. This was despite the Straits Times Index (“STI”) declining 133.97 points or 4.2% during this period.

SGX welcomes Vertex Technology Acquisition Corporation Ltd to Mainboard
Singapore Exchange (SGX) is pleased to welcome the listing of Vertex Technology Acquisition Corporation Ltd (VTAC), as part of SGX’s inaugural batch of Special Purpose Acquisition Company (SPAC) listings. VTAC will be listed on the SGX Mainboard under the stock code “VTA”.

SGX welcomes listing of ETF linked to the future of sustainable mobility; Nikko Asset Management and Straits Trading Company partner to offer first China electric vehicles ETF on SGX
Singapore Exchange (SGX) today welcomed the listing of the NikkoAM-StraitsTrading MSCI China Electric Vehicles and Future Mobility ETF, offering investors access to the largest market of one of the world’s fast-growing industries.

February 2022 Delivery Date Memo – CME
EBS Market Integration Notice: New Content and Updates – CME
CME Globex Notices: January 17, 2022 – CME


Wirecard investors’ case against German regulator BaFin dismissed by court; Four civil lawsuits seeking damages for alleged violation of legal duties are struck out
Olaf Storbeck – FT
Germany’s financial watchdog BaFin does not have to pay damages to shareholders who suffered financial losses from the downfall of payments group Wirecard, a court in Frankfurt has ruled.

LiquidityBook Hires James Baxter as Head of Global Buy-Side Sales
LiquidityBook, a leading provider of cloud-native buy- and sell-side trading solutions, today announced the hire of James Baxter as Head of Global Buy-Side Sales. In this role, Mr. Baxter will be responsible for generating sales within the firm’s buy-side vertical. He will be based in LiquidityBook’s New York office and report directly to CEO Kevin Samuel.

A Fintech Founder Goes on Leave After Alleged Abusive Phone Call
Saritha Rai – Bloomberg
The co-founder of fintech unicorn BharatPe will go on a two-month leave of absence, a remarkable turn of events for an outspoken 39-year-old who several Indian media outlets in recent weeks had alleged having made an abusive phone call to a bank employee.

Google Forms Blockchain Group Under Newly Appointed Executive
Mark Bergen – Bloomberg
Google is forming a group dedicated to the blockchain and related technologies under a newly appointed executive who has spent more than a decade on the company’s core business of search advertising. Shivakumar Venkataraman, an engineering vice president for Alphabet Inc.’s Google, is now running a unit focused on “blockchain and other next-gen distributed computing and data storage technologies,” according to an email viewed by Bloomberg News. The executive will become a “founding leader” of Labs, a business division in which Google houses its various virtual and augmented reality efforts, according to the email. A company spokesperson declined to comment.

Fintech Giant Kakao Pay’s Top Execs Quit After Investor Revolt
Sohee Kim – Bloomberg
Kakao Pay Corp.’s three most senior executives resigned Thursday as an investor revolt rocked its parent, the once high-flying leader in South Korean social media and fintech. Chief Executive Officer Alex Ryu, Chief Financial Officer Kijoo Chang and Chief Business Officer Jin Lee told Kakao of their intention to quit, the company said in a statement. While Ryu’s term was slated to end in March, the departures of his two closest lieutenants came as a surprise and will take immediate effect. The Korean company’s board will vote on Ryu’s departure soon, a spokeswoman said.

Broadway expands executive team with appointment from Bloomberg; Incoming head brings over 20 years’ experience in the financial services industry from Bloomberg, JP Morgan and ING; also adds two new team members to the Broadway team.
Wesley Bray – The Trade
Front-office solutions provider Broadway has appointed Brad Small as its new head of product. In the role, Small will be responsible for steering the product vision, planning, strategies and projects for Broadway’s software solutions.

LiquidityBook appoints new global head of buy-side sales from Eze; New buy-side sales head previously spent over eight years at Eze as a director in North American hedge fund sales and three years at Morgan Stanley in alternative investments.
Annabel Smith – The Trade
New York-based platform provider LiquidityBook has appointed a former Eze Software Group hedge fund sales director to head up its buy-side sales operations globally.


Biden to Expand National Security Agency Role in Government Cybersecurity
Dustin Volz – WSJ
President Biden on Wednesday expanded the National Security Agency’s role in protecting the U.S. government’s most sensitive computer networks, issuing a directive intended to bolster cybersecurity within the Defense Department and intelligence agencies.
The memorandum signed by Mr. Biden mandates baseline cybersecurity practices and standards, such as two-factor authentication and use of encryption, for so-called national security systems, which include the Defense Department and intelligence agencies and the federal contractors that support them.

The mysterious Israeli cybersecurity startup that has raised $100 million under the radar
Meir Orbach – Calcalist
Israeli cybersecurity startup Island has been operating in stealth mode for over a year, raising some $100 million in two funding rounds under the radar. The company was founded in August 2020 by serial entrepreneur Dan Amiga, who serves as the CTO, and Michael Fey, who is Island’s CEO and previously served as the CTO of Symantec and McAfee.

3 growing trends in cybersecurity
Gene Fay – Security Magazine
If 2021 taught us anything, it’s that we should expect the unexpected. While nobody knows with certainty what the future has in store, the three trends below have surfaced in the cybersecurity industry, based on the types of attacker behaviors SOC and threat research teams have seen and recent conversations with companies across industries.
The next trends in cybersecurity include a big focus this year on API security, an evolution of ransomware and continued reliance on social engineering and bots for cyberattacks.


The cracks in the UK’s crypto crackdown; Tightening rules around promoting high-risk investments only goes so far
The editorial board – FT
“If you’re seeing bitcoin on the Underground, it’s time to buy” read one advertisement from a cryptocurrency app, since penalised by the UK’s advertising watchdog for underplaying the risks of investing in volatile assets. For politicians and regulators, it seems that if crypto is advertised on London public transport, it is time to crack down.

EU should ban energy-intensive mode of crypto mining, regulator says; Esma vice-chair criticises method of minting bitcoin that is using more renewable energy
Eva Szalay – FT
A top EU financial regulator has renewed calls for a bloc-wide “ban” on the main form of bitcoin mining and sounded the alarm over the rising proportion of renewable energy devoted to crypto mining. Erik Thedéen, vice-chair of the European Securities and Markets Authority, told the Financial Times that bitcoin mining had become a “national issue” for his native country Sweden and warned that cryptocurrencies posed a risk to meeting climate change goals in the Paris agreement.

UK financial watchdog proposes tougher rules for crypto adverts; Move comes as part of a shake-up of regulations covering promotions for high-risk investments
Joshua Oliver – FT
The UK’s financial watchdog plans to tighten the rules for advertising high-risk investments as it prepares to take over responsibility for cryptocurrency promotions, raising further questions over how digital asset firms will be able to market their services.

Tom Brady’s NFT Platform Autograph Raises $170M
Brandy Betz – Coindesk
Autograph, a non-fungible token (NFT) platform co-founded by National Football League star Tom Brady, has closed a $170 million Series B funding round that was co-led by Andreessen Horowitz (a16z) and Kleiner Perkins.

Biggest Bitcoin Fund Sinks Near 30% Discount in Crypto Rout
Katie Greifeld – Bloomberg
One of the biggest casualties of the cryptocurrency selloff is the Grayscale Bitcoin Trust. The $27 billion fund (ticker GBTC) has plunged nearly 17% so far in 2022, outpacing Bitcoin’s nearly 9% decline. As a result, GBTC’s price closed 26.5% below the value of the Bitcoin it holds on Tuesday, widening GBTC’s so-called discount to record levels, according to Bloomberg data.

NFTs are a ‘fantastic gateway’ for women to break into crypto: Zuckerberg Media CEO
Alexis Christoforous – Yahoo Finance
We are less than a month into the New Year, but so far 2022 has not been kind to crypto. The price of bitcoin (BTC-USD), the granddaddy of digital currency, is off to its worst yearly start since the dawn of crypto, down roughly 40% fromits all time high, and analysts are bracing for more volatility ahead.

Crypto Enthusiasm Prompts Philippine Bank to Launch Trading
Chanyaporn Chanjaroen and Ditas B Lopez – Bloomberg
Union Bank of the Philippines plans to offer trading and custodial services for cryptocurrencies to capitalize on fast adoption of digital tokens in the Asian nation. The average Filipino investor will likely hold 3% to 5% of their personal assets in digital assets like Bitcoin in five years assuming markets are “stable,” up from around 1% to 2% now, said Cathy Casas, head of the bank’s blockchain and application programing interface group. Many crypto investors are young people, some of whom earn tokens from play-to-earn virtual games, she said.

Facebook owner Meta dives into NFT digital collectibles craze; Social media group plans to enter hype-fuelled $40bn market for creating and selling non-fungible tokens
Hannah Murphy and Cristina Criddle – FT
Meta is working on plans to allow users to create and sell non-fungible tokens as Facebook’s parent company seeks to join the rush of companies trying to capitalise on the digital collectible craze. Teams at Facebook and Instagram are readying a feature that will allow users to display their NFTs on their social media profiles, as well as working on a prototype to help users create — or mint — the collectible tokens, according to several people familiar with the matter.

Andreessen Horowitz seeks $4.5bn for new crypto investments; Planned fundraising illustrates how Silicon Valley firms are fuelling boom in cryptocurrency start-ups
Miles Kruppa – FT
Andreessen Horowitz plans to raise up to $4.5bn for a new set of cryptocurrency funds, aiming to more than double the amount it raised less than one year ago in a sign of the growing frenzy surrounding digital assets.

Gemini launches crypto prime brokerage through Ominex acquisition; The acquisition of the trading technology platform will allow the crypto exchange to fully launch its Gemini Prime service, due to be rolled out in the second quarter.
Annabel Smith – The Trade
Crypto exchange Gemini has set out plans to move forward with the full launch of its prime brokerage offering through the acquisition of trading technology provider Omniex. Owned by the Winklevoss twins, Gemini has made six acquisitions in the last few years, also securing $400 million in a funding round in November which took its total valuation to $7.1 billion.


Fink’s Annual Letter Draws Fresh Backlash, This Time From Texas
Shelly Hagan and Silla Brush – Bloomberg
Texas is taking issue with BlackRock Inc. Chief Executive Officer Larry Fink’s latest annual letter, in which he sought to clarify the firm’s stance on fossil-fuel consumption and climate goals. Lieutenant Governor Dan Patrick issued a letter of his own Wednesday, urging the state comptroller to add the world’s largest asset manager to its list of financial companies that have cut ties with the state’s oil and gas industry. Patrick cited a new Texas law that restricts the state from doing business with firms that refuse to work with energy companies.

China’s Propaganda Machine Starts the Year With a Warning; A documentary series highlights the unhappy fate of corrupt officials
Shuli Ren – Bloomberg
If tech billionaires were targeted by China’s rulers last year, it looks like millionaire civil servants are next. “Zero Tolerance,” a new five-part documentary airing this week and jointly produced by CCTV and the Central Commission for Discipline Inspection, the powerful anti-corruption agency, signals just that. In the nine months ending September, CCDI opened about 407,000 cases and punished 438,000 people, the most since disclosures of such figures began in 2017, the watchdog said.

Lord Paul Myners: a robust and sharp witted chair who took on Philip Green; Retail veteran Lord Stuart Rose recounts the period in 2004 when he worked with Myners at M&S. Myners died last week, aged 73
Lord Stuart Rose – FT
Shortly before my appointment as chief executive of Marks and Spencer in 2004, I had to warn the retailer’s chair, Paul Myners, of fake news stories circulating about my private life. “As long as it does not involve children, animals or groups of more than eight it’s fine with me!” was his only response.


ASIC consults on revised ETP naming conventions
ASIC has today released Consultation Paper 356 ETP naming conventions: Updates to INFO 230 (CP 356), seeking feedback on proposals to update the guidance in Information Sheet 230 Exchange-traded products: Admission guidelines (INFO 230), on naming conventions for licensed Australian exchanges that admit exchange traded products (ETPs).

SEC Seeks Candidates for Investor Advisory Committee
The Securities and Exchange Commission is seeking candidates for appointment to the Investor Advisory Committee to help protect investors and improve securities regulations. The committee was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to advise the Commission, protect investor interests and promote the integrity of the securities marketplace. Committee members represent the interests of investors, are knowledgeable about investment issues and have reputations for integrity.

Prepared Remarks: “Dynamic Regulation for a Dynamic Society” Before the Exchequer Club of Washington, D.C.
Chair Gary Gensler – SEC
Thank you for the kind introduction. As is customary, I’d like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff. I’d like to share with you all that we lost an SEC alum, Robert Birnbaum, this past December. Though I didn’t get to know Bob personally, he accomplished a lot in his remarkable life. After leaving the SEC, he went on to lead the New York Stock Exchange.

ESMA launches a Common Supervisory Action with NCAs on valuation of UCITS and open-ended AIFs
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is launching a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) on the valuation of UCITS and open-ended Alternative Investment Funds (AIFs) across the EU.

FINRA Fines Credit Suisse Securities $9 Million for Multiple Operational Failures
FINRA announced today that it has fined Credit Suisse Securities $9 million for failing to comply with securities laws and rules designed to protect investors, including the Securities and Exchange Commission’s Customer Protection Rule and FINRA rules requiring firms to disclose potential conflicts of interest when issuing research reports. As part of the settlement, FINRA also required Credit Suisse to certify that it has implemented supervisory systems and procedures reasonably designed to comply with the Customer Protection Rule and other requirements.

FINRA Amends Rule 2251 Regarding Reimbursement Rates for Processing and Forwarding Proxy and Other Issuer-Related Materials
FINRA has amended, with immediate effectiveness, the provisions of FINRA Rule 2251 regarding rates of reimbursement for expenses incurred in processing and forwarding proxy and other issuer-related materials.1 As specified in more detail below, the amendments apply the notice and access fees set forth under the rule to the distribution of investment company shareholder reports and further prohibit fees on accounts containing only shares that were transferred to the account holder by the member without charge. These amendments conform Rule 2251 to provisions in the New York Stock Exchange (NYSE) rules approved by the Securities and Exchange Commission (SEC).2

Federal Court Orders Kentucky Resident to Pay $17 Million for Defrauding Commodity Futures Clients
The Commodity Futures Trading Commission today announced that the U.S. District Court for the Eastern District of Kentucky entered a consent order for permanent injunction, restitution, and disgorgement against William S. Evans III (d/b/a Turning Point Investments) of Harrodsburg, Kentucky, and Evans’ wife, Frances Evans. The court imposed almost $17 million in relief for defendant’s wrongdoing, including his misappropriation of client money intended for futures trading.

Investing and Trading

Why do so many investors sell out too early? Simply being invested to benefit from miracle of long-term compounding of returns is the most important thing
Howard Marks – FT
In 33 years of writing memos to investors, I’ve never dedicated one to the matter of selling. But I’m doing so now because it’s essential that we understand why many investors fail to focus on the long term and instead sell out. As I wrote in a memo in 2015, I believe most investors trade too much and to their own detriment and that the best solution for illiquidity in markets is to build portfolios for the long term that don’t rely on liquidity and trading for their success.

The Next Big Treasuries Shock Could Come From a Huge Option Position
Edward Bolingbroke – Bloomberg
Treasury futures dipped Thursday, edging toward a key level for options traders which could trigger the next leg higher for yields. The front-dated 10-year contract touched 127 1/4 in early Asia trading, close to the 127 level where a wall of bearish put options has shot up in size since the start of the year. That equates to about 1.92% in benchmark yields, which slipped to around 1.85% Thursday.

Wall Street’s ‘Model Portfolio’ Boom Gets Slammed in New Paper
Justina Lee – Bloomberg
A booming $4.9 trillion branch of the U.S. asset management industry is funneling investor cash into funds that are pricier and worse-performing than alternatives, new research claims. So-called model portfolios — off-the-shelf investment strategies often comprising bundles of ETFs — are ridden with conflicts of interest that undermine one of the hottest and most opaque businesses on Wall Street, a trio of academics argues.

Environmental, Social and Corporate Governance

Microsoft-Backed Fund Raises $200 Million for Climate Startups
Mark Bergen – Bloomberg
Energy Impact Partners LP, a venture capital firm that counts Microsoft Corp. and Duke Energy Corp. as backers, has raised $200 million for a new fund to turn ambitious climate technologies into commercial operations.

Big firms have pledged to erase carbon emissions. Have they considered what that will cost? Giants like McDonald’s, Kraft Heinz and Mondelez leave shareholders to guess at the bottom-line impact of their plans to eliminate carbon emissions.
Ally Marotti – Crain’s Chicago Business
McDonald’s, Kraft Heinz and Mondelez trumpeted recent vows to reduce their net carbon emissions to zero by 2050, pleasing climate activists pressing for action to curb global warming. They’ve had less to say about the costs of hitting that target, a matter of some concern to another important constituency: shareholders expecting investment returns.

Al Gore’s Generation Investment to Raise $1.25 Billion for New Fund
Benjamin Robertson – – Bloomberg
Generation Investment Management, the impact-focused investment firm co-founded by Al Gore, is seeking to raise $1.25 billion for a new fund. The vehicle will target innovative sustainability-focused high growth companies primarily in North America and Europe, according to an investor letter seen by Bloomberg News. That may include firms involved in climate change solutions, low-cost health care and providers of wider access to credit.


Morgan Stanley lifts profitability target as it seeks $10tn in client assets; Wall Street company’s goals represent push by chief into asset and wealth management
Joshua Franklin – FT
Morgan Stanley lifted a crucial profitability target as the Wall Street company seeks to expand its business beyond investment banking and trading and increase the assets in its wealth management arm to $10tn. The bank gave the update on Wednesday as it reported a 10 per cent rise in profits for the last three months of 2021. It told investors it would aim for a return on tangible common equity (ROTCE), a key measure of profitability, over the “longer term” of at least 20 per cent.

Morgan Stanley CEO Gorman ‘Not Going to Be Here’ in Five Years
Katherine Chiglinsky – Bloomberg
Morgan Stanley Chief Executive Officer James Gorman, who’s been in the job for 12 years, reiterated his plan to exit his role within five years. “I’m not leaving now and I’m not going to be here in five years,” Gorman, 63, said on a call Wednesday discussing fourth-quarter earnings. “We’re developing successors. I’ll be here a few years and I want to see these integrations done.”

BlackRock Restarts Fundraising for Long-Term PE Strategy
Silla Brush and Dawn Lim – Bloomberg
BlackRock Inc. is making a new push to raise money for its long-term private equity fund after initially struggling to attract investors. The world’s largest asset manager is seeking to gather an additional $2 billion to $3 billion for its Long Term Private Capital strategy, according to people with knowledge of the matter. The fund, which acquires stakes in private companies, announced its initial close last January, having amassed $3.44 billion, falling short of its earliest target of as much as $12 billion.

David Booth’s Dimensional Is Already the Biggest Active ETF Firm
Katie Greifeld – Bloomberg
David Booth’s Dimensional Fund Advisors has seized the crown of largest active ETF manager 14 months after the quant giant entered the industry. Supercharged by a series of unprecedented mutual fund conversions, assets across the firm’s 13 exchange-traded funds have surged to nearly $46 billion, surpassing First Trust’s $45 billion haul in actively managed funds, according to Bloomberg Intelligence data. Including passively managed funds, Dimensional is on the cusp of becoming one of the top 10 largest U.S. issuers.


U.S. Corn Saves Hungry Canadian Cows After Drought Scorches Feed
Jen Skerritt and Michael Hirtzer – Bloomberg
Canada is now one of the top buyers of U.S. corn as cattle ranchers scour for grain to feed their animals.Dry conditions zapped as much as 40% of western Canada’s grain output last year, sending prices for barley and other crops to all-time highs and leaving a dearth of feed for the nation’s cattle industry. The squeeze has prompted Canada to make a rare commitment to bring in about 3.2 million metric of tons of corn from its southern neighbor, according to U.S. Department of Agriculture data.That’s the most in roughly two decades and compares to only 457,000 tons a year ago. Canada’s now one of the biggest purchasers alongside China, Mexico and Japan, and its buying binge is reducing already tight stockpiles of feed grains.

Exotic Forex Derivatives Return in RBI’s Push to Deepen Markets
Subhadip Sircar and Akshay Chinchalkar – Bloomberg
Exotic foreign-exchange derivatives are making a comeback in India, reflecting the central bank’s efforts to deepen the financial markets. After the Reserve Bank of India’s allowed lenders to offer derivative products earlier this month, banks such as ICICI Bank Ltd. and Axis Bank Ltd. sold barrier forex options to customers including Reliance Industries Ltd. and Supreme Petrochem Ltd.

France Culls Poultry in Home of Foie Gras to Fight Bird Flu
Megan Durisin – Bloomberg
Government orders cull in southwest, home of foie-gras sector; Outbreak of disease in Europe threatens higher chicken prices
French poultry farmers face a mass cull of their flocks for a second straight year as a bird flu crisis deepens across Europe. The government on Thursday ordered poultry and waterfowl in parts of the southwest — home to France’s famed foie gras industry — to be killed to stop the disease spreading. That follows a severe outbreak that claimed about 3.5 million poultry, mainly ducks, between autumn 2020 and spring 2021.

Electronic trading adoption accelerates in Asian bond markets; New report from Coalition Greenwich found that since 2016, bonds traded electronically in Asia have more than doubled.
Wesley Bray – The Trade
E-trading growth in Asia so far has been a result of relatively liquid G3 and Chinese Yuan denominated bonds; however, more recently, trading in local market bonds has moved increasingly onto electronic trading venues.


WBEZ board approves acquisition of Sun-Times; The Chicago Sun-Times will operate as a subsidiary of Chicago Public Media; both newsrooms will have their own editors and editorial independence.
Ally Marotti – Crain’s Chicago Business
The board that controls WBEZ approved the acquisition of the Chicago Sun-Times, marking one of the first scenarios in the nation in which a public radio station owns a newspaper. The organizations expect the transaction to close by Jan. 31.

A Glut of Cauliflower Is Coming to Britain; Poor growing conditions mean the vegetable wasn’t ready for harvest in time for the festive season.
Press Association. Via Bloomberg
Half a million cauliflowers that flowered too late for Christmas are to be sold at a reduced rate from January, following “some of the worst growing conditions for many years”. British retailers had to import the vegetables from France and Spain to meet festive demand as a lack of cold nights in August and September delayed the growth of the brassica in the UK.

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