Crypto Lender BlockFi, in Talks With FTX, Also Gets Ledn Offer

Jul 1, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Monday is the 4th of July holiday in the U.S. and you can expect to see JLN’s annual sharing of the Declaration of Independence edition of the John Lothian Newsletter. We will resume our normal publication schedule on Tuesday. Have a nice weekend and stay safe.

ICE continues its very sophisticated, advanced, unique and subliminal marketing campaign within a marketing campaign with its latest YouTube video titled “The Making of ICE Make The Connection” that features ICE Chief Communications Officer Josh King interviewing ICE Founder and CEO Jeffrey Sprecher and ICE Chief Marketing Officer Stephanie Dobbs Brown. This very well produced feature varies from the conference room in New York to the high seas and all places in between.

What amazes me is the way that ICE’s marketing has evolved in recent years as new people have been brought in and empowered to create a vision and make it happen. The way the organization works together in finding the influencers, too, is exceptional. It is all about teamwork. This is the best marketing campaign for a diverse, multifaceted company I have seen that weaves the story back to a simple premise, making the connection. The theme itself is an idea inside an idea, not only about markets and connecting buyers and sellers, but connecting people around the world through the use of data across the organization. ICE has a good story to tell and they are telling it well.

Cboe is getting new neighbors in the Old Post Office, the snoopy kind. The Chicago Sun-Times is moving its newsroom into a 6,000 square-foot space in the renovated, and inside very cool looking Old Post Office. The Sun-Times will share space with public radio WBEZ 91.5-FM. The Sun-Times’ David Roeder broke the story on June 29 about how the paper is downsizing from 22,000 square-feet to a smaller hybrid working space.

For years the Sun-Times had a prominent building on the Chicago river near Michigan Avenue, but sold it in 2004 to make way for Trump International Hotel & Tower. The Chicago Tribune now operates out of its printing plant on West Chicago Avenue, but that is slated to be turned into a casino. How the times have changed in the newspaper business.

The FMX Futures Exchange is looking for a manager of market surveillance. You can find out more about the job from the posting on LinkedIn.

ALTSO’s Rocktoberfest Chicago will be back in person this year on October 13th at 7 p.m. at the City Winery. Mark your calendars and get ready to rock for a good cause.

Matt Leising’s DeCential has an article titled “Crypto Halal: Mohammad Abo Jazar Is On a Quest for a Sharia-Compliant Blockchain” by Ahmed A. Mansour. The sub headline is “The backstory on the Gaza-based startup that’s issued Islamic finance verdicts on more than 2,500 cryptocurrencies.”

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


The Making of ICE Make The Connection
NYSE – YouTube
Josh King, Chief Communications Officer at ICE, takes us behind the scenes of ICE’s first major advertising campaign. In a never seen before conversation, Josh, ICE Founder Jeff Sprecher, and ICE CMO Stephanie Dobbs Brown sit down to reveal the inspiration and complete story behind making the connection between people and opportunity. Join the team as they go from an Atlanta based startup to a conference room in New York to the high seas and all the places in between. The north star of the voyage, a 60 second spot that captures how an idea to modernize energy trading led to a global powerhouse of markets, data, and technology.

***** Could Jeff Sprecher be any more relaxed in this video?~JJL


Business leaders need to speak up for democracy
Staying silent might be easier but it could damage both company reputations and the US political economy
Gillian Tett – FT
Are American business leaders ready to defend democracy? If you look at recent opinion polls, the answer might seem to be a resounding — and reassuring — “yes”. Take a survey published in May by the Business & Democracy Initiative, a Washington lobbying group. This found that 96 per cent of business leaders think that “a well-functioning democracy is important to a strong economy” and 81 percent agree that “businesses should act to ensure safe and fair elections”.

****** Leaders need to lead. Not all in positions of authority are leaders or understand the responsibility they have been given. Just my opinion, but I look for those who can live up to the Scout Law (they don’t have to have been Scouts or be Scouters) to find leaders who are brave enough to speak up for democracy. This is another reason why I think Scouting is so important and why I have committed so much time, treasure and energy to it, to help build up the future leaders that will protect our democracy. Scouts earn merit badges in Citizenship in the Nation, Citizenship in the Community and Citizenship in the World and now Citizenship in Society as part of earning the Eagle Scout rank for a reason, to prepare them for a life of service to our nation and world with a deep appreciation for the democratic values of the U.S. and other nations.~JJL


Goldman Sachs and Charles Schwab Executives Join OCC Board of Directors
The Options Clearing Corporation (OCC)
OCC, the world’s largest equity derivatives clearing organization, today announced two new members of its Board of Directors: Alicia Crighton, Managing Director at Goldman Sachs and Faris Matalka, Managing Director at Charles Schwab. “We are pleased to welcome Alicia and Faris as they are both widely respected leaders across the global derivatives market,” said Craig Donohue, OCC Executive Chairman. “Their extensive leadership experience and diverse skillsets make them highly qualified to join our board, and we feel confident that they will support our continued innovation and transformation. We look forward to benefiting from their counsel as we work to ensure confidence in the financial markets and the broader economy.”

***** Iconic firms sending top talent to the OCC board, just as it should be.~JJL


BMO and Jefferies Sign On to Platform Bringing AI Auctions to Stocks
Katherine Doherty – Bloomberg
A new trading platform operated by OneChronos Markets LLC will let institutional investors bid for equities in an automated auction, an effort to disrupt the ages-old system for buying and selling stocks. OneChronos started this month with Bank of Montreal, Jefferies Financial Group Inc. and more than a dozen other broker-dealers signed on. The New York-based firm’s technology enables potential buyers to dictate what they think the value of a portfolio or large quantity of stocks is at a given time, known as an “expressive” bid.

******The world will soon learn what former CBOT CEO Bernie Dan has been up to besides playing golf when they discover OneChronos.~JJL


Thursday’s Top Three
Our most clicked story Thursday was Bloomberg’s Did Razzlekhan and Dutch Pull Off History’s Biggest Crypto Heist? Second was Yahoo! Finance’s Crypto: ‘Blockchain is hype’ – MPs warned. Third was Business Insider’s A hedge fund manager who moved to Miami from Chicago breaks down the pros and cons of living in the Magic City for employees of Ken Griffin’s Citadel — from food to crime to the weather, which was our top story Wednesday.


MarketsWiki Stats
26,892 pages; 239,242 edits
MarketsWiki Statistics


Lead Stories

Crypto Lender BlockFi, in Talks With FTX, Also Gets Ledn Offer; BlockFi deal with Bankman-Fried’s FTX would be deep discount; Proposed deal involving rival Ledn involves funding round
Hannah Miller and Olga Kharif – Bloomberg
Troubled crypto lender BlockFi Inc., already in talks with industry giant FTX, has been approached about a deal with another party that includes rival Ledn, according to three people with knowledge of the matter.

ESMA recognises US-based clearing houses OCC and FICC; In contrast, UK-CCPs have only been granted time limited equivalence of three years to reduce EU institutions reliance on them.
Annabel Smith – The Trade
ESMA has recognised US-based Fixed Income Clearing Corporation (FICC) and the Options Clearing Corporation (OCC) as Tier one central counterparties under Emir regulation. On 27 June the European securities markets regulator recognised for the first time the two CCPs which are also supervised by the US’ Securities and Exchanges Commission (SEC) and Commodity Futures Trading Commission (CFTC).

ICE to cease CDS clearing in London in March 2023
Huw Jones – Reuters
Intercontinental Exchange said on Thursday it would stop clearing credit default swaps in London next year and shift the activity to Chicago, helping to shield itself from any rupture from the European Union. The loss of clearing business will stoke concerns that London needs to do more to keep its global appeal as a financial centre after being largely cut off from the EU since Brexit, with the government on Thursday promising finance a “reset… We will be consolidating our CDS clearing services into ICE Clear Credit in Chicago from the end of March 2023,” ICE said in a statement, confirming a Reuters report in March.

FTX Nears Deal to Buy Lender BlockFi in Likely Fire Sale
Deal talks in place after FTX agrees to provide credit line; Depressed value reflects liquidity troubles in crypto industry
Yueqi Yang and Hannah Miller – Bloomberg
FTX, the digital-asset exchange co-founded by Sam Bankman-Fried, is nearing an agreement to buy BlockFi Inc. after extending a credit line to the beleaguered crypto lending platform, according to people familiar with the matter. CNBC reported earlier that FTX is paying roughly $25 million and that a term sheet is almost complete, citing unnamed sources. Zac Prince, chief executive officer of BlockFi, responded in a tweet, saying “I can 100% confirm that we aren’t being sold for $25M.” Prince didn’t comment in the tweet whether BlockFi was in acquisition talks.

CFTC Charges South African Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin This Action Is CFTC’s Largest Fraud Scheme Case Involving Bitcoin
The Commodity Futures Trading Commission filed a civil enforcement action in the U.S. District Court for the Western District of Texas, charging Cornelius Johannes Steynberg of Stellenbosch, Western Cape, Republic of South Africa and Mirror Trading International Proprietary Limited (MTI), a company organized and operated under the laws of the Republic of South Africa, with fraud and registration violations. Steynberg created and operated, through MTI, a global foreign currency commodity pool that only accepted Bitcoin to purchase a participation in the pool, with a value of over $1,733,838,372. This action is the largest fraudulent scheme involving Bitcoin charged in any CFTC case.

CFTC Orders Interactive Brokers LLC to Pay Over $1 Million for Supervision Failures
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Interactive Brokers LLC, a registered futures commission merchant, for failing to diligently supervise its employees’ handling of exchange fees charged to customers. The order requires Interactive Brokers to cease and desist from violating the CFTC regulation addressing supervision, pay $710,828.14 in disgorgement with credit for money paid to affected customers, and pay a $300,000 civil monetary penalty.

Mesirow names first female CEO in its 85-year history
Natalie Brown, a relative newcomer to the Chicago-based investment firm, succeeds 50-year company veteran Richard Price, who now is executive chairman.
Steve Daniels – Crain’s Chicago Business
Mesirow Financial has tapped a relative newcomer to the 85-year-old investment firm as the sixth CEO in its history. Natalie Brown leads the Chicago-based investment house beginning today after landing at Mesirow in 2018. Before that, she spent 18 years at Chicago-based fixed-income asset management firm Nuveen in a variety of finance roles. Brown, 51, the first female chief executive of Mesirow in its history, succeeds Richard Price, a 50-year company veteran who’s channeled in and out of the top job over the past decade as Mesirow found it challenging to find a successor. Price now is executive chairman and will remain active in the firm, according to a statement announcing the news.

Can crypto contagion infect mainstream finance? Most regulators and industry heavyweights believe banks and asset managers are protected
FT reporters – FT
The crypto carnage has one silver lining: the broader financial system has been spared. From Brussels to Washington, finance watchdogs downplay the risk of turmoil spilling into other markets and argue that their own actions have protected banks from the crypto tailspin.

Pentagon finds concerning vulnerabilities on blockchain
A new report reveals that blockchain is neither decentralized nor updated.
Ray Fernandez – TechRepublic
A report commissioned by the Pentagon concluded that the blockchain is not decentralized, is vulnerable to attacks and is running outdated software. The report, “Are Blockchains Decentralized, Unintended Centralities in Distributed Ledgers”, uncovered that a subset of participants can “exert excessive and centralized control over the entire blockchain system.” The findings of the report are a cause of concern for a wide range of sectors, but especially serious for security, fintech, big tech and the crypto industries, which continue to grow.

EU finalises sweeping rules for ‘wild west’ crypto industry
Scott Chipolina – FT
Europe has reached a landmark deal to regulate trading of crypto assets in the bloc, in an effort to rein in what lawmakers call the “wild west” of financial markets. EU member states and the European parliament late on Thursday settled the terms of rules that aim to protect consumers while allowing the nascent market to flourish. “Recent developments on this quickly evolving sector have confirmed the urgent need for an EU-wide regulation,” said Bruno Le Maire, French finance minister.

Omicron variants drive 34% jump in UK Covid-19 infections
Scotland remains the nation hit hardest by the surge, according to the ONS
Clive Cookson – FT
Covid-19 infections in England have jumped by 34 per cent in a week as new Omicron variants drive a wave of new cases across the UK, according to the weekly survey by the Office for National Statistics.

Vinod Khosla: AI and climate investors can help western values win out
The Silicon Valley venture capitalist says it is vital to take risks on breakthrough technologies as economic rivalry between the US and China intensifies
Clean tech, health tech and “bleeding edge” computing have been the investment themes of Vinod Khosla’s venture capital firm since he set it up in Silicon Valley in 2004. After his own success in building the computer hardware and chip group Sun Microsystems in the 1980s, followed by 18 years at VC firm Kleiner Perkins, he became one of the earliest backers of the first wave of US solar start-ups — suffering losses when China disrupted the economics of the market.

It Is Our Reputation That Matters: Interview with Tony Saliba, CEO of Mercury Digital Assets
Adam Mendler
I recently went one on one with Tony Saliba, CEO of Mercury Digital Assets. Tony is also the founder and CEO of LiquidPoint, a trading platform, broker, and solution provider that he sold to Convergex for $250 million.

Celsius Says Its Exploring Strategic Transactions, Restructuring
Lender last provided an update to its users on June 19; Comment comes amid speculation the lender is seeking a bailout
Olga Kharif – Bloomberg
Crypto lender Celsius Network, which halted user withdrawals more than two weeks ago amid liquidity issues, said it’s exploring options such as “strategic transactions as well as a restructuring of our liabilities.” The lender didn’t elaborate in a blog post Thursday. Celsius, which let users lend out their coins for up to more than 18% annualized rate, grew to more than 1.7 million users and at one point had more than $20 billion in assets before its fall from grace.

Crypto lender Celsius says it is exploring options
Retail crypto lending platform Celsius Network said on Thursday it was exploring options including deals and restructuring its liabilities. Celsius earlier this month froze withdrawals and transfers, citing “extreme” market conditions, leaving its 1.7 million customers unable to redeem their assets. The Hoboken, New Jersey, company hired restructuring consultants from advisory firm Alvarez & Marsal to advise on a possible bankruptcy filing, the Wall Street Journal reported last week, citing people familiar with the matter.
/ Cooperating With Investigations Into Three Arrows
Deribit, pushed for Three Arrows’ liquidation; Singapore central bank reprimanded fund over false claims
Yueqi Yang, Lucca De Paoli, and Benjamin Robertson – Bloomberg, a creditor of Three Arrows Capital, said it is cooperating with ongoing investigations into the troubled crypto hedge fund. and Deribit, a crypto derivatives exchange, confirmed that they are among creditors that sought for the liquidation of Three Arrows at a court in the British Virgin Islands, according to a court filing and representatives at the two companies. The court made the liquidation order on Monday and has appointed two partners at consulting and advisory firm Teneo to handle the process, a person familiar with the matter has told Bloomberg News.

Putin’s Swoop on Key Gas Plant Could Force Foreign Partners Out
Shell, Mitsubishi, Mitsui hold stakes in Sakhalin-2 LNG site; Decree will transfer rights in plant to a new Russian company
Stephen Stapczynski and Garfield Clinton Reynolds – Bloomberg
President Vladimir Putin signed a decree to transfer rights to the Sakhalin-2 natural gas project to a new Russian company, a move that could force foreign owners including Shell Plc to abandon their investment in the facility. The decree cites threats to Russia’s national interests and economic security, according to a statement dated June 30, issued by the Kremlin and signed by Putin. Stakeholders have one month to say whether they’ll take a holding in the new company, and those who opt out may not be fully compensated, the statement said. The move could prove complicated for Shell, which holds a 27.5% stake in the liquefied natural gas facility in Russia’s far east. The energy giant announced it would exit the project after Russia invaded Ukraine, and also said it wouldn’t commit to any new investments in the country.

Three Arrows Crypto Fund CEO Wants to Sell Singapore Mansion
Zhu Su is seeking to offload bungalow bought for $35 million; His hedge fund faces liquidation, central bank reprimand
Faris Mokhtar and Yoojung Lee – Bloomberg
The co-founder of beleaguered crypto hedge fund Three Arrows Capital is seeking to sell one of his luxury homes in Singapore as the company faces liquidation. Chief Executive Officer Zhu Su has been trying to offload at least one of his so-called good-class bungalows in the past couple of weeks, according to people with knowledge of the matter.

EU finalises sweeping rules for ‘wild west’ crypto industry
Authorities agree standards designed to protect consumers and increase transparency from companies
Scott Chipolina – FT
Europe has reached a landmark deal to regulate trading of crypto assets in the bloc, in an effort to rein in what lawmakers call the “wild west” of financial markets. EU member states and the European parliament late on Thursday settled the terms of rules that aim to protect consumers while allowing the nascent market to flourish. The rules, known as the Regulation on Markets in Crypto-assets (Mica) represent the first effort to impose standards throughout the bloc, rather than a patchwork of national rules.

DE Shaw ordered to pay record $52mn to former star money manager; Finra panel finds hedge fund defamed senior partner who parted ways with the firm in 2018
Brooke Masters – FT
DE Shaw and four of its top executives have been ordered to pay a record $52mn to one of its former star money managers by financial industry arbitrators who found the secretive hedge fund defamed him. A Financial Industry Regulatory Authority (Finra) arbitration panel found that Dan Michalow had not committed sexual misconduct, even though DE Shaw announced in 2018 that its investigation had found “gross violations of our standards and values”.

Ukraine Invasion

Inflation in eurozone hits record 8.6% as Ukraine war continues
ECB plans first interest rate rise in 11 years as food prices increase and Putin’s invasion drives up energy costs
Richard Partington – The Guardian
Inflation across the eurozone has soared to a fresh record of 8.6% in June as Russia’s war in Ukraine adds to the cost of living crisis.
Figures from the EU statistics agency Eurostat showed consumer price inflation increased from 8.1% in May, reaching the highest level since relevant records began in 1997, two years before the euro was launched.

Russia Admits It’s Running Out of Weapons in Ukraine War
Isabel Van Brugen – Newsweek
For the first time, Russia has admitted that it is running out of weapons in the Ukraine war, after President Vladimir Putin’s government created a draft federal law that would allow the country to quickly repair weapons and military equipment.
On Thursday evening, the Kremlin submitted a bill to the State Duma on “special economic measures” for “counterterrorist and other operations” outside of Russia.
An explanatory note attached to the bill said that there is, particularly amid Putin’s war against Ukraine, “a short-term increased need for the repair of weapons and military equipment.”

Culture of Ukrainian borscht cooking inscribed on the List of Intangible Cultural Heritage in Need of Urgent Safeguarding
Culture of Ukrainian borscht cooking was today inscribed on UNESCO’s List of Intangible Cultural Heritage in Need of Urgent Safeguarding by the Intergovernmental Committee for the Safeguarding of the Intangible Cultural Heritage, composed of representatives of the States Parties to the UNESCO Convention.

The European Union flag was placed inside the main chamber of the Ukrainian Rada, or parliament, in Kyiv.
ABC News
The president of the European Commission told the Rada that “Europe will stand up with Ukraine for as long as it takes.”

Exchanges, OTC and Clearing

Nickel sulfate vs metal: Is the market shifting towards new pricing mechanisms?
Jesline Tang and Leah Chen – S&P Global
Three months after a historic short squeeze on the London Metal Exchange, which sent nickel prices soaring past $100,000/mt, the LME is back in the spotlight. This time it’s facing two lawsuits, a complaint and a membership cancellation over the situation.

NYSE Pitches US Listings to Gulf Tech Firms Amid Global Selloff
Julia Fioretti – Bloomberg
The New York Stock Exchange is trying to lure Middle Eastern technology companies to list in the US, promising access to a broader investor base and deeper capital markets, even amid heightened volatility that’s scuppered listings worldwide.

BME and Kreab bring together leading economic experts to discuss post-trade
A wide range of national and international speakers analysed the challenges of post-trade in the post-pandemic recovery environment; The event featured three round tables covering regulation, digitalisation and sustainable investment in this industry
BME and the communication consultancy Kreab, today hosted a gathering in the Madrid stock exchange to discuss the main challenges of post-trade in the context of the economic recovery after the Covid-19 pandemic.

Swiss set to step up scrutiny of commodities traders
Switzerland is set to take a closer look at Swiss-based commodities traders to get more intelligence about a sector that has flourished in a country known for its light-touch approach to regulation.

The Spanish stock market trades 32.8 billion euros in June
The volume traded in Equities was up 1.5% in June and 11.8% in the first half of the year; Fixed Income issuance in June was up 61.6%; Trading in IBEX 35 index futures contracts to the end of June increased 14.3%
The Spanish stock market traded 32.8 billion euros in Equities in June, 1.5% more than in May and 6.7% less than in the same month the previous year. The amount recorded in the first half of the year grew by 11.8%. The number of trades in June was 3.3 million, down 4.6% from May and down 6.5% on the same month in 2021. The annual cumulative figure was down by 4.7%.

BNP Paribas Securities Japan, Ltd. joins as a broker to provide connection to RFQ Platform CONNEQTOR
Tokyo Stock Exchange, Inc. (TSE) launched the RFQ (Request For Quote) platform, CONNECTOR, in February of last year with the aim of improving liquidity in the ETF market. We are pleased to announce that BNP Paribas Securities Japan, Ltd. has joined as a broker to provide connectivity to CONNEQTOR from today. And they will also provide a service to use CONNEQTOR on behalf of institutional investors so that they can use the service by phone.

Trading Overview in June 2022 & First Half of 2022 (January to June)
Japan Exchange Group released Trading Overview in June 2022 & First Half of 2022 (January to June).

Moscow Exchange, together with market participants, creates an Investor Protection Club
On July 1, 2022, the Moscow Exchange discussed with professional financial market participants the issues of protecting the rights of investors in the face of economic restrictions imposed by the European Union on the National Settlement Depository (NSD, part of the Moscow Exchange Group).


Liquidnet’s head of trade services for EMEA and APAC joins Citi’s Execution to Custody unit; New E2C head for EMEA has held senior roles at UBS, Deutsche Bank, Liquidnet and HSBC Securities.
Jonathan Watkins – The Trade
Citi has appointed Nadine Readie as head of Execution to Custody (E2C), EMEA, the unit which provides clients global execution, settlement and custody services through a single portal. Readie brings a wealth of experience to the role, having started her career in financial services back in 2002.

GAM Investments integrates Bloomberg solutions to simplify risk and portfolio management; The asset manager will use the suite of buy-side solutions to manage market risk exposure and liquidity and investment risk.
Annabel Smith – The Trade
GAM Investments has integrated a suite of solutions from Bloomberg in a bid to simplify its risk and portfolio management capabilities. Included in the suite adopted by the asset manager are MARS, a multi-asset risk system, LQA, a liquidity assessment solution and PORT Enterprise, Bloomberg’s multi-asset portfolio and risk analytics solution.

Crypto Halal: Mohammad Abo Jazar Is On a Quest for a Sharia-Compliant Blockchain
Ahmed A. Mansour – DeCential
The backstory on the Gaza-based startup that’s issued Islamic finance verdicts on more than 2,500 cryptocurrencies. Mohammad Abo Jazar learned about currency crises early in life. Perhaps too early. Born in Iraq, he witnessed his country’s invasion of neighboring Kuwait in the early 1990s when the resulting war and harsh economic sanctions brought the economy to its knees. The Iraqi Dinar fell from 3 dollars to less than a few pennies. After losing all their savings, Abo Jazar’s family left Al Anbar, in western Iraq, for his father’s hometown of Gaza in the Palestinian Territories. “Out of the frying pan and into the fire,” he said with a laugh. Today, the 43-years-old university professor is the founder of “Crypto Halal,” a Gaza-based company specializing in Islamic Sharia-compliant cryptocurrencies. The Iraqi Dinar isn’t the only currency in the Middle East to take a nosedive. In 2019, The Lebanese Lira lost 90 percent of its value. In the past three months, Egypt devalued its currency by 14 percent. On the other side of the equation, the dominance of the U.S. dollar in global markets is having an adverse effect as well, Abo Jazar said.


Russian Hackers Target Norway in Latest Volley of Cyber Attacks
Stephen Treloar – Bloomberg
Russian hacker group Killnet targeted a string of Norwegian public service websites in the latest digital salvo against NATO member countries. Norway’s National Security Authority has been assisting a series of organizations in dealing with targeted cyber attacks from an alleged pro-Russian group, Director General Sofie Nystrom told reporters on Wednesday. Some websites experienced instability or disruption, but there are currently no indications that any sensitive or personal information has been compromised

A Fintech Horror Story: How One Company Prioritizes Cybersecurity
Cesar Cerrudo – DarkReading
“Veem is committed to safeguarding customer information and funds and has in place a comprehensive security program that includes internal, external and regulatory assessments. We have responded to Mr. Cerrudo, and we continue to evaluate information provided to us by customers or third parties to ensure that any issues raised from those sources are included in our roadmap, as appropriate. As a matter of policy, we do not publicly comment on specifics of our program, other than to reinforce that we take our obligations seriously and devote substantial resources to deliver services in a reliable and secure manner.”

Companies are desperate for cybersecurity workers—more than 700K positions need to be filled
Sydney Lake – Fortune
The need for cybersecurity professionals has been growing rapidly, even faster than companies can hire—and that demand is expected to continue. The number of unfilled cybersecurity jobs worldwide grew 350% between 2013 and 2021, from 1 million to 3.5 million, according to Cybersecurity Ventures. The industry researcher also predicts that in five years, the same number of jobs will still be open.


Nvidia Game Card Prices Fall Along With Crypto Mining Demand; Prices have tumbled as much as 50% on secondhand markets; Ethereum to change approach to mining, further eroding demand
Cecilia D’Anastasio and Ian King – Bloomberg
The turmoil in the cryptocurrency industry has ravaged portfolios and left large and small investors struggling to adapt. It’s also taken a toll on a corner of the tech world that once benefited from crypto’s rise: Nvidia Corp. graphics cards. Long popular with computer gaming nerds, these cards enjoyed a second life during the crypto boom as an essential component of the systems that generate digital coins.

Crypto Exchange CoinFlex Won’t Resume Withdrawals as Planned; CEO says a distressed debt fund committed to buying new token; Halted withdrawals, citing large client’s failure to pay debt
Yueqi Yang – Bloomberg
Cryptocurrency exchange CoinFlex won’t resume withdrawals Thursday as it had planned as it continues to raise funds to make up for the shortfall of $47 million triggered by a client’s default. In an effort to resume withdrawals, CoinFlex issued a new token that will offer a 20% annual return. CoinFlex Chief Executive Officer Mark Lamb declined to share how much money has been raised. CoinFlex is aiming to reopen withdrawals “as soon as possible, upon a successful raise,” Lamb said in a message to Bloomberg News, without providing a specific date. “One distressed debt fund has committed and we’re talking to several others. Our confidence has grown since Monday, as the industry of traditional finance buyers for these products has reached out in full force.”

Bank of America’s Crypto Users Shrunk by 50% in Bear Market; Crypto comprises less than 1% of US household financial assets; Sentiment toward cryptocurrencies has soured, says BofA
Vildana Hajric – Bloomberg
The number of active cryptocurrency users at Bank of America has declined by more than half amid the prolonged rout in the digital-asset market. The bank’s crypto users shrunk to below 500,000 in May from more than 1 million in November 2021, when Bitcoin and some other tokens hit all-time highs. Since then, crypto prices have cratered, with sentiment among fans also souring. Bitcoin has tumbled nearly 60% this year and is trading just above $19,000. The bank said there has been “a grave decline” in prices.

Why Twitter, Redfin, Coinbase are rescinding job offers
Allie Garfinkle, Brian Cheung and Akiko Fujita – Yahoo! Finance
Yahoo Finance’s Allie Garfinkle joins the Live show to break down the reasons why Twitter, Redfin, Coinbase are among the latest companies to rescind job offers.

Crypto Lender Celsius Network Exploring Options to ‘Preserve and Protect’ Assets
Elizabeth Napolitano – CoinDesk
Crypto lending platform Celsius is exploring options to “preserve and protect assets,” following its mid-June turmoil, according to an announcement published on the firm’s blog on Thursday. “Across Celsius today, we are focused and working as quickly as we can to stabilize liquidity and operations, in order to be positioned to share more information with the community,” the post reads. These actions could include “pursuing strategic transactions” and “restructuring its liabilities” among other strategies, the company said. “These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines,” Celsius wrote.

Bitcoin Swings Buffet Traders After Token Suffers Worst Month
Suvashree Ghosh and Sidhartha Shukla – Bloomberg
Bitcoin, fresh off its biggest-ever monthly decline, whipsawed traders with wild swings on Friday as digital assets struggle to regain their footing. The largest token rallied as much as 11.3% in Asia on Friday, briefly closing in on the $21,000 level. Bitcoin then quickly gave up most of those gains, trading around $19,400 at 11:30 a.m. in London. June’s 41% drop was the steepest in Bloomberg data going back to 2010.

Crypto Winter Is Coming After SEC Rejects Key Bitcoin ETF
As if crypto bros didn’t have enough to worry about. The Securities and Exchange Commission has rejected Grayscale Investments’ application to convert its $13 billion spot Bitcoin trust into an exchange-traded fund, crushing one of crypto’s greatest hopes for wider digital asset ownership. Grayscale—which had the support of the greater crypto industry behind it—has tapped a former U.S. Solicitor General to sue the SEC in what may be one of the most important legal battles in Bitcoin’s history.

Grayscale Got Its Answer on a Bitcoin ETF. And Didn’t Like It
The SEC rejected Grayscale’s bid to convert its Bitcoin investment product into an ETF. Now the parties are heading to court
Victoria Vergolina – Bloomberg
One of the most closely-watched fights in crypto might sound a little obscure, but it’s really important. It pits a company called Grayscale Investments against the US Securities and Exchange Commission, a crucial regulator. And it involves so-called exchange traded funds, an extremely popular type of investment vehicle, and Bitcoin, the largest and most liquid cryptocurrency. Grayscale had been lobbying regulators to allow it to convert one of its existing crypto products into an exchange traded fund, or ETF.

Cryptocurrency CEO Used Social Media to Steal $1.7B of Bitcoin: Officials
Matthew Impel – Newsweek
The head of a cryptocurrency firm was recently accused of defrauding dozens of individuals out of over $1.7 billion worth of Bitcoin, officials announced on Thursday. In a press release, the Commodity Futures Trading Commission (CFTC) announced that they were filing a “a civil enforcement action” in Texas against a South African man identified as Cornelius Johannes Steynberg.

Are N.F.T.s All Scams?
Stephen J. Dubner and Ryan Kelley – Freakonomics
Some of them are. With others, it’s more complicated (and more promising). We try to get past the Bored Apes and the ripoffs to see if we can find art on the blockchain.


Supreme Court limits EPA’s power to combat climate change; The decision risks putting the U.S. further off track from President Biden’s goal of running the power grid on clean energy by 2035
Robert Barnes and Dino Grandoni – The Washington Post
The Supreme Court on Thursday sharply cut back the Environmental Protection Agency’s ability to reduce the carbon output of existing power plants, a blow to the Biden administration’s plans for combating climate change. The ruling infuriated President Biden and environmentalists, who said it raised formidable obstacles to the United States meeting its climate goals, including the president’s goal of running the U.S. power grid on clean energy by 2035. “Another devastating decision that aims to take our country backwards,” Biden said. But the Republican-led states that challenged the broad authority the EPA claimed said it was a dutiful examination of the Clean Air Act and a proper acknowledgment that Congress had not given such vast powers to the agency. The vote was 6 to 3, with Chief Justice John G. Roberts Jr. writing for the court’s majority. And it reinforced an emerging view from its conservatives that too much power is vested in executive branch agencies that act without clear authority from Congress.


Grayscale Got Its Answer on a Bitcoin ETF. And Didn’t Like It; The SEC rejected Grayscale’s bid to convert its Bitcoin investment product into an ETF. Now the parties are heading to court
Victoria Vergolina – Bloomberg
One of the most closely-watched fights in crypto might sound a little obscure, but it’s really important. It pits a company called Grayscale Investments against the US Securities and Exchange Commission, a crucial regulator. And it involves so-called exchange traded funds, an extremely popular type of investment vehicle, and Bitcoin, the largest and most liquid cryptocurrency. Grayscale had been lobbying regulators to allow it to convert one of its existing crypto products into an exchange traded fund, or ETF.

‘Baller Ape Club’ NFT Promoter Charged in Alleged Rug-Pull Scam
Chris Strohm – Bloomberg
The Justice Department announced criminal charges against a person involved in promoting “Baller Ape Club” non-fungible tokens and five other people involved in crypto fraud schemes that together raised more than a $130 million from investors. Le Anh Tuan was accused of conspiring to steal $2.6 million from investors in the largest NFT scheme ever charged, the department said in a Thursday statement. Tuan was allegedly part of the Baller Ape Club, which purported to sell NFTs in the form of various cartoon figures. Shortly after the first NFTs were publicly sold, Tuan and other unnamed conspirators engaged in a so-called “rug pull,” shutting down the project and disappearing with investors’ money.

Apple Ex-Corporate Law Chief Admits Years of Insider Trading; Gene Levoff pleaded guilty to six counts of securities fraud; Levoff was responsible for policing insider trading at Apple
Chris Dolmetsch and Bob Van Voris – Bloomberg
The Apple Inc. lawyer who was once responsible for enforcing the company’s insider trading policy admitted he used his access to draft SEC filings to personally profit. Gene Levoff, Apple’s former director of corporate law, pleaded guilty on Thursday to six counts of securities fraud between 2011 and 2016. Levoff, 48, was co-chairman of the company’s disclosure committee, which allowed him to see Apple’s revenue and earnings statements before they were filed with the Securities and Exchange Commission.

***** Here is the FT version of this story. ~JJL

‘Cryptoqueen’ Ruja Ignatova added to FBI’s 10 Most Wanted Fugitives list; The FBI is offering up to $100,000 for information leading to her arrest.
Aaron Katersky and Meredith Deliso – ABC News
Ruja Ignatova, the so-called Cryptoqueen, has now been named a most-wanted fugitive by the FBI. The FBI added Ignatova to its 10 Most Wanted Fugitives list for allegedly defrauding investors of more than $4 billion through OneCoin, a cryptocurrency company she helped found in 2014. The move comes after Europol added Ignatova, 42, to its most-wanted list earlier this year. “It’s an important tool for us, the top 10 list,” FBI Assistant Director Michael Driscoll told reporters during a news briefing Thursday. “We think the public is in the best position to help.” Ignatova, a Bulgarian lawyer, claimed to have invented a cryptocurrency to rival Bitcoin. She and others allegedly made false statements while soliciting investments and promoted OneCoin through a multi-level marketing strategy, according to the FBI.

EU Watchdog Wants to Address Threat Crypto Assets Could Pose to Financial System
Camomile Shumba – Coindesk
The European Systemic Risk Board (ESRB) has deemed it a “matter of urgency” to consider the need for additional regulatory measures and policy steps to address the potential threat that crypto assets could pose to the financial system.

Singapore regulator censures embattled crypto fund Three Arrows; MAS says investment firm filed false information and has been under investigation for a year
Scott Chipolina – FT
Singapore’s markets regulator has reprimanded Three Arrows Capital for filing false information, dealing a further blow to the crypto hedge fund being liquidated over its failed bets. The Monetary Authority of Singapore said on Thursday that Three Arrows had breached its allowed threshold for S$250mn assets under management. It also said the fund manager had failed to notify it of changes to directorships or shareholdings.

CFTC Charges Commodity Pool Operators and a Florida Company with Fraudulently Solicitating Over $41.6 Million in a Commodity Pool Scheme
The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the U.S. District Court for the Southern District of Florida against Emerson Pires and Flavio Goncalves, both Brazilian citizens who previously resided in Port Saint Lucie, Florida; Joshua Nicholas of Stuart, Florida; and Empires Consulting Corp., a Florida corporation. The complaint alleges the defendants fraudulently solicited, accepted, and pooled at least $41.6 million, including more than $14.3 million from individuals in the U.S., through commodity interest pools under the name EmpiresX. The complaint further alleges that Pires, Goncalves, and Empires Consulting misappropriated at least $5 million in pool participant funds. In continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA), as charged.

Statement of Commissioner Kristin Johnson Regarding the CFTC Charging South African Commodity Pool Operator and CEO with $1.7 Billion Fraud Involving Bitcoin
Today, the Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Western District of Texas against Cornelius Johannes Steynberg of South Africa and Mirror Trading International Proprietary Limited (MTI), a South African company, alleging that they operated a fraudulent scheme to solicit, accept, and pool more than $1.7 billion to trade off-exchange, retail foreign currency (forex) on a leveraged, margined and/or financed basis. Defendants engaged in an international fraudulent multilevel marketing scheme via various websites, in addition to social media, to solicit bitcoin from members of the public for participation in their pool. At least 23,000 of the pool participants—most, if not all, of whom were not eligible contract participants—were from the United States.

Statement of Commissioner Kristin Johnson Regarding the CFTC Charging Commodity Pool Operators and a Florida Company with Fraudulent Solicitation of $41.6 Million
Today, the Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Southern District of Florida against Empires Consulting Corp., a Florida corporation, and three individuals, alleging that they operated a fraudulent scheme to solicit, accept, and pool at least $41.6 million, including at least $14.3 million from over 2,300 individuals in the United States. Defendants’ solicitations were largely via the internet or online, through the company’s website, videos posted on social media platforms, and emails. Defendants initially solicited participants to fund their accounts using cryptocurrencies, including, among others, bitcoin, ether, and tether.

FINRA Updates the OTC Equities High Price Dissemination List
FINRA is publishing its quarterly OTC Equities High Price Dissemination List for the first quarter of 2022. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of July 1, 2022. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter June 30, 2022 as the “Start” date and July 1, 2022 as the “End” date.

SEC Charges Empires Consulting Corp. with Fake Trading Scheme; As scheme collapsed, defendants stopped investor withdrawals and relocated to Brazil
The Securities and Exchange Commission today announced fraud charges against Empires Consulting Corp. (EmpiresX), its founders Emerson Sousa Pires and Flavio Mendes Goncalves, and its head trader Joshua David Nicholas, for a scheme that allegedly raised at least $40 million by luring investors with false claims of one percent daily profits, but instead misappropriated large sums of investors’ money for personal uses.

Statement on Decision in Bench Trial of Mark Heckele
Gurbir S. Grewal – SEC
After a 2-day bench trial, the Honorable Mark C. Scarsi in the Central District of California found Mark Heckele liable for securities fraud and illegally selling securities in unregistered offerings.

SEC Charges Recidivist and Four Others in Oil-And-Gas Offering Frauds
The Securities and Exchange Commission charged William Glen Baker, recidivist Michael Bowen, Cannon Operating Company LLC, and Chol Kim for their roles in raising approximately $2.2 million from more than 140 investors through the fraudulent and unregistered sale of working interests in four Oklahoma wells.

ASIC to communicate negative audit review findings to directors
ASIC has announced that it will routinely communicate negative findings from its reviews of audit files to directors, rather than the current exception basis.

Warning: Crypto Bot using a fake news article
FMA New Zealand
We have received a report of Crypto Bot using a fake article with the name and images of a well-known New Zealand public figure to promote their platform. Below is one of the images from the article.

Investing and Trading

SPAC Led by Former Apple Executive Goes Bankrupt Less Than a Year After Going Public
Jeremy Hill and Bailey Lipschultz – Bloomberg
Enjoy Technology Inc., a retail startup founded by former Apple Inc. executive Ron Johnson, filed for bankruptcy on Thursday — less than a year after going public through a merger with a blank-check company. The company plans to keep operating and sell itself to Asurion LLC while in Chapter 11 bankruptcy, court papers show. Asurion has agreed to lend $52.5 million of new money to fund the Chapter 11 case. Enjoy operates what it calls mobile retail stores that help consumers buy and set up technology gadgets, like mobile phones, in their homes. The Palo Alto-based company, which was founded in 2014, has struggled to raise the capital needed to fund its operations lately, according to court papers.

Richest Billionaires Lose $1.4 Trillion in Worst Half-Year Ever; Musk, Bezos, Zuckerberg among those with steepest wealth drops; Global stock markets plunge as central banks fight inflation
Josephine Walker – Bloomberg
Elon Musk’s fortune plunged almost $62 billion. Jeff Bezos saw his wealth tumble by about $63 billion. Mark Zuckerberg’s net worth was slashed by more than half. All told, the world’s 500 richest people lost $1.4 trillion in the first half of 2022, a dizzying decline that marks the steepest six-month drop ever for the global billionaire class.

Why This JPMorgan Strategist Says It’s OK to Hoard Cash; According to Oksana Aronov, it serves as a “free option” on any asset class.
Vildana Hajric and Michael P. Regan – Bloomberg
It’s a common motto among investors: Cash is trash. But Oksana Aronov, head of market strategy, alternative fixed income at J.P. Morgan Asset Management, says not so fast.

World’s Top Pension Fund Writes Off Russia Stocks, Sells Bonds; Japan’s GPIF says it’s unable to sell some Russian equities; Apple was fund’s largest international holding at end of March
Hideyuki Sano – Bloomberg
Japan’s Government Pension Investment Fund said Friday that it’s been selling Russian assets since March following the invasion of Ukraine, marking down some values to almost zero in the process.

The looming risks in private equity returns; More insulated than stock markets, the industry is still exuberant — but the reckoning may be coming
Anneka Treon – FT
The stock market has run out of exuberance, but private equity has not. That is leading to some extreme distortions in the correlations between the public and private markets. Stock markets are seeing large and fast declines as the largest single US buyer of financial securities — the Federal Reserve — switches to selling while raising rates.

Crypto loses its hedge role; Investors should tread warily in a very volatile market
Ian Taylor – FT
The big question on everyone’s lips in the cryptocurrency markets now is: where will this sharp sell-off end? On top of that, many people are asking what happened to the supposed zero correlation between crypto and traditional assets — the idea that bitcoin and other currencies offered a hedge against declines in securities such as equities and bonds. They point out that we have seen crypto and equity markets coming down together recently in the face of the same macroeconomic headwinds. Are these markets correlated after all?

Environmental, Social and Corporate Governance

Coca-Cola among brands greenwashing over packaging, report says; Research ‘exposes litany of misleading claims’ by household names, including Coca-Cola and Unilever
Sandra Laville – The Guardian
Claims about plastic packaging being eco-friendly made by big brands, including Coca-Cola and Unilever, are misleading greenwashing, according to a report. The Changing Markets Foundation says claims that companies are intercepting and using “ocean-bound” or “recyclable” plastic to tackle the plastic pollution crisis are some of the most common examples of greenwashing. The claims are made with little proof about how the products address the crisis in plastic pollution, their report says. It says this is done to obscure the real impact of plastic from consumers. George Harding-Rolls, campaign manager at Changing Markets Foundations, said: “Our latest investigation exposes a litany of misleading claims from household names consumers should be able to trust. This is just the tip of the iceberg and it is of crucial importance that regulators take this issue seriously.

The Supreme Court Tries to Overrule the Climate; A destructive decision in West Virginia v. E.P.A.
Bill McKibben – The New Yorker (Opinion)
Credit where due: the Supreme Court’s 6 – 3 ruling in West Virginia v. E.P.A. is the culmination of a five-decade effort to make sure that the federal government won’t threaten the business status quo. Lewis Powell’s famous memo, written in 1971, before he joined the Supreme Court—between the enactment of a strong Clean Air Act and a strong Clean Water Act, each with huge popular support—called on “businessmen” to stand up to the tide of voices “from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians” calling for progressive change. He outlined a plan for slowly rebuilding the power of industrial élites, almost all the elements of which were taken up by conservative movements over subsequent years: monitoring textbooks and TV stations, attacking left-wing faculty at universities, even building a publishing industry.

Climate Litigants Look Beyond Big Oil for Their Day in Court; Airlines and fashion firms increasingly defendants in lawsuits; Cases have doubled since 2015; growing outside the US, Europe
Katharine Gemmell – Bloomberg
Airlines, farming and other heavy polluting industries have started to join oil giants as the main targets of climate change lawsuits, as campaign groups try to get their day in court with some of the world’s biggest polluters. More than half of the 38 climate lawsuits filed against businesses globally last year took aim at firms outside their familiar fossil-fuel hunting ground, including plastics, agriculture, transport and clothing companies, according to a report from the London School of Economics’ Grantham Research Institute on Climate Change and the Environment. Climate litigation has become a crucial part of the toolkit to force companies and governments to account over their climate promises and to boost action to slow global warming.

First Mover Asia: Speculating on Tokenized Carbon Offsets Won’t Help Climate Crisis, Says Consultant; BTC Falls Under $19K Amid Wider Crypto Woes
Sam Reynolds, James Rubin – Coindesk
Crypto investors looking for bad news to justify a continued retreat from bitcoin had more than enough on Thursday. There were the dual spot bitcoin exchange-traded fund (ETF) rejections in the U.S. late Wednesday, one of which prompted an immediate lawsuit by Grayscale Investments, a subsidiary of CoinDesk parent Digital Currency Group. There were the Singapore central bank’s reprimand of floundering crypto hedge fund Three Arrows Capital for misleading it with allegedly false information, a CoinDesk report of bitcoin miners facing margin calls, of crypto futures exchange CoinFLEX continuing to halt withdrawals and the European Systemic Risk Board (ESRB) deeming crypto assets possible threat to traditional financial systems a “matter of urgency.”

Shareholders back away from green petitions in US proxy voting season; Support drops after activists filed a record 389 environmental and social proposals
Brooke Masters – FT
A record-breaking US proxy season for shareholder proposals brought disappointment to environmental activists, as some investors shied away from backing climate proposals they saw as too prescriptive.

ESG: Not Woke Capitalism or Greenwashing—but an opportunity for employee voice
Judy Samuelson – Aspen Institute
In literal terms, ESG stands for environmental, social, and governance approaches to running or investing in companies. In practical terms, it’s a catch-all for issues that have captured the attention of consumers and shareholders but divide us politically, from climate change and human rights to racial equity and geopolitics, to abortion and guns. As a result, ESG is itself becoming a political issue, with critics on both the right and the left.


BNP Paribas Exits Commodities Finance Business in the US; French bank sells book of US loans to Mitsubishi UFJ Financial; Sale of loan portfolio is expected to close in 3 to 6 months
Lucia Kassai – Bloomberg
BNP Paribas SA is exiting its commodities finance business in the US, following earlier retreats in other parts of the world. “The decision taken to exit this business was consistent with our approach in EMEA,” the bank said in a statement in response to questions. “The impact is limited, and BNP Paribas remains deeply committed to the US and Americas” as well as its energy and renewables clients, it said.

Wellness Exchange

Wuhan Sees Virus Return Days After Xi Reinforces Covid Zero; Chinese city has seen few cases since quelling first outbreak; Cases jump by 107 in locked down area of Anhui province
Covid-19 has returned to the central Chinese city where it first emerged, with two cases reported in Wuhan and a swelling outbreak in a neighboring province, just as Beijing and Shanghai appear to have quelled the virus once again. Two port workers in Wuhan came down with asymptomatic Covid infections, authorities said Friday. They’re the first cases there in more than a month and come just days after President Xi Jinping’s symbolic visit to the city, where he reiterated China’s pursuit of a zero-tolerance pandemic policy that’s leaving the country isolated and subject to unpredictable restrictions.

There Is No ‘Back to Normal’ After Covid; A Q&A with top Japanese virologist Hitoshi Oshitani about reopening tourism, future strains of Covid and the post-pandemic world.
Gearoid Reidy – Bloomberg
Japanese virologist Hitoshi Oshitani has an impressive record fighting pandemics. As one of the leading experts advising the government during Covid, he helped formulate a strategy that has kept deaths in the country with the world’s oldest population lower than any other developed nation, without resorting to lockdowns. Now, as the world clamors for Japan to reopen its borders, he’s urging caution. Perhaps it’s time to listen. “I don’t like the notion of ‘back to normal,'” Oshitani, a professor of virology at the Tohoku University Graduate School of Medicine, said in an interview in his Tokyo office.

Covid Cases Up By More Than 30% in Britain Last Week
The number of new coronavirus cases across Britain has surged by more than 30% in the last week, new data showed Friday, with cases largely driven by the super infectious omicron variants.


Bond Traders Who Faced Irrelevance Make a Comeback in Japan; Volatility index for Japanese government bonds surges; Bank of Japan policy under scrutiny as global rates climb
Takashi Nakamichi – Bloomberg
Things are looking up for long-suffering traders of Japanese government bonds. After years of subdued price swings caused by central bank intervention, a key gauge of volatility in the 1 quadrillion yen ($7.4 trillion) market has surged in recent weeks to the highest level since 2008. That’s boosting demand for JGB traders, with Nomura Holdings Inc. noting signs of intensifying competition for talent. “The industry may have become short of human resources” for handling JGB business, Yutaka Nakajima, Nomura’s head of global markets, said in an interview. Japan’s biggest brokerage is open to hiring “a few dozen” staffers, including dealers and sales people for its global fixed income operations, although it has no set target, he said.

Japan’s Top Baby-Formula Maker Joins Race to Feed American Kids; Meiji seeking to expand overseas with high-quality, lower cost; US FDA relaxed import rules because of powdered milk shortage
Kanoko Matsuyama – Bloomberg
Meiji Holdings Co. plans to enter the $5.9 billion US baby formula market, joining Nestle SA, Danone DA and other global giants seeking to supply powdered milk to ease a national shortage. Japan’s largest maker of baby formula has applied to the Food and Drug Administration for authorization to export to the US, including specialized formula and its portable cube-shaped powder milk, Shinichirou Tanaka, manager of Meiji’s global infant nutrition business, said in an interview. Parents in the US are struggling to find baby formula amid a nationwide shortage, prompting President Joe Biden to invoke emergency powers under the Defense Production Act to speed production of formula and use government planes to import ingredients and formula. At the same time, the deaths of infants suspected to be tied to contaminated formula earlier this year has also fueled concerns over the quality of products.

Japan Trading Houses Fall on Putin’s Sakhalin Gas Project Decree; Mitsui & Co, Mitsubishi Corp have a 22.5% stake in Sakhalin-2; Putin signed order to move the plant to a new Russian entity
Aya Wagatsuma – Bloomberg
Shares of Japanese trading houses dropped after President Vladimir Putin signed a decree to transfer the Sakhalin-2 natural gas plant to a new Russian entity, a move that could force the companies to exit their investment in the key energy project. Mitsubishi Corp. and Mitsui & Co., which own a combined 22.5% of the Sakhalin project, both tumbled. Mitsui fell as much as 5.7%, while Mitsubishi declined 5%.

A $12 Billion South African Fixed-Income Manager Plans Startup Fund; Futuregrowth to raise as much as 600 million rand in 2022; Fund manager to invest in firms with a developmental impact
Paul Burkhardt – Bloomberg
Futuregrowth Asset Management Ltd., a South African fixed-income money manager with 193 billion rand ($11.9 billion) of assets, is raising a fund to invest in startups with a strong developmental impact. The company aims to raise as much as 600 million rand for the Futuregrowth High Growth Development Equity Fund — a closed-ended, limited-life fund — by the end of the year, according to a statement from Futuregrowth. For the money manager’s Cape Town-based Chief Investment Officer Andrew Canter, South Africa’s second-largest city offers ample opportunities for investment. “There are some real hives of activity going on out there,” Canter said in an interview in Bloomberg’s Cape Town office, adding that he has seen lot of business action while cycling 30 kilometers (18.6 miles) to work and back. Futuregrowth has invested in companies such as financier of small firms, Retail Capital, which Canter has observed while on his ride to work.

Dubai Is the Newest Hedge Fund Hotspot
Nicolas Parasie, Archana Narayanan and Nishant Kumar – Bloomberg
After attracting crypto firms, property investors and Russian billionaires, Dubai is drawing a new crowd: hedge fund managers. Izzy Englander’s Millennium Management has grown its staff in the Dubai International Financial Centre to about 30 since securing a license in 2020. Michael Gelband’s ExodusPoint Capital Management, one of the largest multi-strategy hedge funds in the world, registered in the DIFC in June, according to a filing.


Chicago Sun-Times moving to Old Post Office
Robert Feder – Crain’s Chicago Business
For the third time in 17 years, the Sun-Times newsroom is on the move. Under the new ownership of nonprofit Chicago Public Media, the newspaper will be downsizing its offices to a 6,000 square-foot space in Chicago’s renovated Old Post Office at 433 West Van Buren Street. It will share the space with public radio WBEZ 91.5-FM, which will retain its offices and studios at Navy Pier. Since 2017 the Sun-Times has been leasing 22,000 square feet in a nondescript building at 30 North Racine Avenue on the Near West Side. The new space “will be optimized for flexible work schedules for a staff working remotely since the pandemic,” according to a report by David Roeder. Sun-Times CEO Nykia Wright told staffers the company signed a one-year lease and the site should be ready by August.

Sotheby’s CEO on Why the Art Market Is Soaring; From inflation to the rise of Asian collectors, Charles Stewart reveals the dynamics fueling robust auction sales
Kelly Crow – WSJ
Amid London’s ongoing summer auction series, Sotheby’s Chief Executive Charles Stewart is taking stock of the global art market, and he likes what he sees. On Wednesday, Sotheby’s sold $182 million worth of art over a couple hours in London, meeting the house’s expectations even though a few works by artists such as David Hockney and Ernst Ludwig Kirchner failed to find buyers. Top sales included Francis Bacon’s $53 million “Portrait of Lucian Freud” and Andy Warhol’s $16 million “Self Portrait.” Feverish bidding followed young upstarts like Flora Yukhnovich, whose smudgy Rococo-style painting, “Boucher’s Flesh,” sold to a bidder in Asia for $2.8 million—10 times its low estimate.

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