‘Cryptojacking’ Attacks on Financial Firms Surge, Report Says

Jul 26, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Doc Sandor continues to have a bigger smile on his face as his American Financial Exchange announced the second highest weekly volume of $14.119 billion for the week of July 18-22, 2022. The only other week that beat last week was during the height of the pandemic, on March 16-20, 2020, when $14.948 billion was transacted. These are big numbers for a little exchange and the reason innovation is best conceived and executed by a small, independent organization with its own culture. When you have other products trading trillions, it is hard to get excited about those trading billions or millions.

Lots of law firms are fighting to be known for their crypto-savvy practices, but Bloomberg reports one has emerged as the “Go-To Law Firm for Crypto Bankruptcies.” That firm is Kirkland & Ellis, one of the biggest law firms in the world by revenue.

Larry Light, a senior contributor to Forbes, recently interviewed Michael Oyster, the chief investment officer of Options Solutions, for a Forbes piece titled “Diversification Isn’t Enough To Hold Down Market Risk.” You can also listen to the podcast, which is 7 minutes long.

Exchange Invest took a look at job losses at crypto exchanges and issued a report titled “Crypto Exchange Layoffs – A Brief Sample.”

Trading Technologies is looking for a Chicago, Ill.-based hybrid Internal Communications Manager. Details are on LinkedIn.

Those JLN Joe Corona videos shot at OIC were timely, as Matrix Executions recently announced an all-time high in option volume and market share in the second quarter of 2022, in June, and in the first half of 2022. The broker-dealer specializing in trading workflow automation for options markets had an 138% increase in options volume compared to the first half of 2021 and more than double its 2021 options market share.

For many years, during this time of July I was at summer camp with the Boy Scouts. I was Scoutmaster of a boy troop for eight years, but was leading summer camp even before I became Scoutmaster. One of my favorite things to do for a homesick Scout was to buy him ice cream. It was a sure fire way to get his mind off of home. Often, the ice cream would be sold out, as we were in the last week of camp and lots of inventory had started to run out. But for some reason, there was always Choco Tacos, from Klondike. It is ice cream, covered in cone material shaped like a taco, covered in chocolate. It was my favorite ice cream treat, other than a whole pint of Häagen-Dazs. Well, Klondike announced it is no longer selling the Choco Taco. It is just as well; the camp we used to go to has been sold as part of the local Boy Scout Council’s contribution to the national Boy Scouts of America bankruptcy. Some memories are left memories.

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

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Nearly one in three Americans say it may soon be necessary to take up arms against the government
Brad Dress – The Hill
A majority of Americans say the U.S. government is corrupt and almost a third say it may soon be necessary to take up arms against it, according to a new poll from the University of Chicago’s Institute of Politics. Two-thirds of Republicans and independents say the government is “corrupt and rigged against everyday people like me,” according to the poll, compared to 51 percent of liberal voters. Twenty-eight percent of all voters, including 37 percent of gun owners, agreed “it may be necessary at some point soon for citizens to take up arms against the government,” a view held by around 35 percent of Republicans and around 35 percent of Independents. One in five Democrats concurred.
/jlne.ws/3S3I07h

***** This is a scary statistic.~JJL

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The Gun Industry Created a New Consumer. Now It’s Killing Us; Good marketing is supposed to generate demand. Bad firearms marketing has given us a national nightmare.
Ryan Busse – NY Times
Americans are rightly anguished by gun violence and the question of what’s motivating the young men who have committed a succession of horrific mass murders. We seem to be fumbling around for answers: Is it racism and radicalization, or untreated mental illness, or toxic video games, or too-easy access to guns? All of these may be parts of the problem, but equally none of them makes complete sense outside of the larger context: The gun industry’s modern marketing effort did not just arm these shooters; in a very real sense, it created them.
/jlne.ws/3OFsV8J

***** This is a scary story, how the marketing of guns has changed and the impact that has had.~JJL

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London’s Square Mile Struggles to Find Its Way in Brexit Britain; New round of listing reforms planned as IPO volumes stay low; Rule changes are uncertain while UK leadership contest runs
Swetha Gopinath and Katherine Griffiths – Bloomberg
London is in danger of becoming a mere “regional stock market” down the line unless it significantly raises its game — that is the warning from Mark Austin, the latest person charged with sprucing up the UK’s listing rules and helping the city maintain its position as one of the world’s leading financial centers. “We need to be fleet of foot, ambitious and bold,” said Austin, a partner at law firm Freshfields Bruckhaus Deringer, who was commissioned to lead a government review into London’s capital markets. For companies wanting to list in Europe rather than the US, “London was often the go-to option; that is not necessarily the case any more. They are increasingly also eyeing Amsterdam or other venues, be it for valuation, or easier regulation,” he said in an interview.
/jlne.ws/3b6kjKN

****** Three cheers for Brexit!~JJL

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Tech bros prosper in New York, but won’t overrun it; As a capital of media, advertising and finance, Manhattan is an ideal place to create prop-tech, fintech, ad-tech and more
Joshua Chaffin – FT
So many things have changed for the worse in New York City since the Covid pandemic took hold that it is worth noting one development for the better: the city’s tech sector has thrived, and continues to do so. Its rude health is charted in a report published this month by Tech:NYC, a local trade group, and the Center for an Urban Future think-tank. It found that tech accounted for 17 per cent of New York City’s job growth since 2010 (about 114,000 jobs) and was increasing at a faster rate than nearly every other sector.
/jlne.ws/3JdxyGg

****** What is the opposite of a tech bro? ~JJL

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The Choco Taco is gone for good
Danielle Wiener-Bronner – CNN Business
Pour one out for Choco Taco. The beloved Klondike product, packaged ice cream in a taco-shaped cone, has been discontinued. “Over the past 2 years, we have experienced an unprecedented spike in demand across our portfolio and have had to make very tough decisions to ensure availability of our full portfolio nationwide,” a Klondike Brand representative told CNN Business in an email, adding “we know this may be very disappointing.” You could possibly still find Choco Tacos around as sellers run through their inventory, the representative said.
/jlne.ws/3PWExoS

*****Gone, but not forgotten.~JJL

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Monday’s Top Three
Our top story Monday was How Chicago came to love the Italian beef sandwich, from NPR. Second was another Chicago story, Downtown Chicago is awash in summer tourists. But a key driver of retail activity is missing: office workers, from The Chicago Tribune. Third was Don’t Call it a Swap: The CFTC Asserts Jurisdiction Where it Shouldn’t, an opinion piece from Jones Day that was also third on Friday.

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MarketsWiki Stats
26,954 pages; 239,765 edits
MarketsWiki Statistics

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Lead Stories

‘Cryptojacking’ Attacks on Financial Firms Surge, Report Says
Tanzeel Akhtar – Bloomberg
Hackers are increasingly targeting financial firms such as banks and trading houses with attacks designed to use their computer systems to mine cryptocurrencies, according to cybersecurity firm SonicWall. The number of so-called cryptojacking attacks on financial companies more than tripled in the first half from a year earlier, SonicWall said in a report published Tuesday. The overall number of such events rose 30% to 66.7 million, the report found.
/jlne.ws/3J4631K

The madness of the oil market; The past two years have seen the biggest swings in the oil price in 14 years as geopolitics and the energy transition bewilder traders
David Hindley – FT
In the past two years, oil has been traded as cheaply as $19 a barrel (or below zero if you were buying a US blend called West Texas Intermediate) and as high as $139 a barrel. We have not seen such huge swings in the oil price since the 2008 financial crisis, when oil crashed from $150 a barrel to below $40 as fears of a global recession saw demand collapse.
/jlne.ws/3vgTqdP

Banks Start Using Information-Sharing Tools to Detect Financial Crime; Technology can help banks team up to find money launderers, but the legal basis for information-sharing is murky in many countries
Dylan Tokar – WSJ
Banks have long struggled to spot illicit transactions among the multitudes they process daily because criminals move dirty money from one institution to another to cover their tracks, leaving compliance staff with only a partial road map of their actions. That has started to change, with financial institutions and service providers in several countries creating information-sharing platforms and messaging tools with the potential to vastly improve the detection of money laundering and fraud.
/jlne.ws/3PD9Zc9

Tether’s recovery of an $840mn loan scrutinised in Celsius bankruptcy; Case is a major test of how US insolvency rules will apply in digital asset sector
Kadhim Shubber – FT
Stablecoin issuer Tether faces scrutiny over an $840mn loan it recovered from Celsius Network as the crypto lender’s bankruptcy tests how insolvency rules apply to digital assets. Celsius filed for bankruptcy protection in the US this month, becoming the latest casualty of the recent crash in crypto prices and leaving hundreds of thousands of its customers facing losses on their investments.
/jlne.ws/3b2qIqt

Cost cuts loom on Wall Street as balance of power with staff shifts; Big banks are preparing to rein in expenses after a marked change in conditions
James Fontanella-Khan – FT
Wall Street bankers should brace themselves — investment banks are getting ready to tighten their belts. A year after rewarding staff with mega bonuses for generating record profits on the back of a boom in dealmaking and initial public offerings linked to the Spac frenzy, there has been a marked change in conditions for banks. Fears of a recession, sparked by the war in Ukraine and a sharp tightening in monetary policy to tackle high inflation, have had a heavy impact on mergers, equity and debt underwriting businesses at most investment banks.
/jlne.ws/3zwkB70

London’s financial markets need more reform to beat rivals, adviser says; Author of deregulation proposals warns on risk of UK complacency over ‘once in a generation’ changes
Daniel Thomas – FT
Ministers need to continue reforming London’s capital markets or risk losing ground to rival cities in the EU and US, the author of the UK’s latest market deregulation proposals has warned. Last week, the Treasury backed a series of reforms drawn up by Freshfields’ lawyer Mark Austin to make it quicker, easier and cheaper for companies to raise money in London.
/jlne.ws/3ovn2QZ

FCA chooses BMLL to access deep market insights; The financial regulatory body will utilise Level 3 data and analytics from BMLL to better understand how markets behave.
Wesley Bray – The Trade
The Financial Conduct Authority (FCA) has selected BMLL to access deep market insights through the latter’s Data Lab, Data Feed and visualisation tools. BMLL claims that its Level 3 Data provides full transparency of the order book, derived from every single insert, modify, execute or delete order message across every venue.
/jlne.ws/3JdD23F

The battle for Euronext’s clearing: a tale of two CCPs; Following the exchange’s decision to migrate its clearing operations, LCH SA and EuroCCP are lacing up for battle. The question is, who will be preferred?
Annabel Smith – The Trade
The race to be Euronext’s preferred clearing counterparty is hotting up, with two main contenders EuroCCP and LCH SA, LSEG’s Paris based clearing arm, preparing for war. Euronext moved to break off its 10-year deal – originally due to expire in 2027 – with LCH SA in November after announcing its plans to move its clearing operations to Italy. The move followed its acquisition of Borsa Italiana and the bourse’s clearing house CC&G – now rebranded to Euronext Clearing.
/jlne.ws/3vcHKsv

Bithumb Holder Says Discussing Stake Sale To Bankman-Fried’s FTX
Hooyeon Kim – Bloomberg
Vidente, which holds a stake in the South Korean crypto exchange Bithumb, says it has discussed a possible sale of its holdings in the business to FTX, confirming an earlier Bloomberg report. Bloomberg News reported that FTX, the crypto trading platform co-founded by billionaire Sam Bankman-Fried, is in advanced talks to buy the South Korean crypto exchange. Bithumb, founded in 2014, currently processes around $569 million worth of trades on its platform a day on average, according to data provider CoinGecko.
/jlne.ws/3PWEb1C

Coinbase Faces SEC Investigation Over Cryptocurrency Listings; Regulator probing whether firm offered unregistered securities; Company has asked watchdog to clarify digital-asset rules
Allyson Versprille and Lydia Beyoud – Bloomberg
Coinbase Global Inc. is facing a US probe into whether it improperly let Americans trade digital assets that should have been registered as securities, according to three people familiar with the matter. The US Securities and Exchange Commission’s scrutiny of Coinbase has increased since the platform expanded the number of tokens in which it offers trading, said two of the people, who asked not to be named because the inquiry hasn’t been disclosed publicly. The probe by the SEC’s enforcement unit predates the agency’s investigation into an alleged insider trading scheme that led the regulator last week to sue a former Coinbase manager and two other people. The SEC and Coinbase declined to comment.
/jlne.ws/3z0tpR2

Coinbase’s Face-Off With the SEC Just Got More Serious. Look Out for a Formal Probe.
Jack Denton – Barron’s
Coinbase Global has since last week appeared poised to clash with the Securities and Exchange Commission over an issue that could prove pivotal to the entire crypto industry—whether some tokens are, in fact, securities. Now, it looks like the cryptocurrency exchange’s face-off with the SEC will get much more serious. Coinbase (ticker: COIN) faces an SEC investigation into whether it improperly let Americans tradedigital assets that should have been registered as securities, Bloomberg reported, citing three anonymous sources.
/jlne.ws/3S3QI58

Coinbase Promised Empowerment While Pushing Questionable Assets; “Surely Coinbase should have found this before randoms on Twitter did?”
Max Chafkin – Bloomberg
In September 2020, amid a wave of activism by employees in support of the Black Lives Matter movement, Coinbase Chief Executive Officer Brian Armstrong announced a new policy governing politics in the workplace. Staff would be banned from engaging in activism at work, he announced, and should refrain from advocating for political and social issues in the office. Anyone who disagreed would be asked to resign, and the only workplace politics allowed in the future would be related to Coinbase’s “mission,” which was “building the most trusted and easiest to use financial products that help people access the cryptoeconomy.” This, he said, would “bring more economic freedom to the world.”
/jlne.ws/3vgzyYB

Binance CEO Sues Bloomberg’s Hong Kong Partner for Defamation
Danny Nelson – Coindesk
Binance CEO Changpeng Zhao on Monday sued Bloomberg Businessweek’s Hong Kong publisher Modern Media CL. on defamation claims over a translated Chinese language article title that portrayed the crypto exchange chief as running a “ponzi scheme.”
/jlne.ws/3OyhkZ5

Ex-US congressman among 9 charged in insider trading cases
Larry Neumeister – AP
A former U.S. congressman from Indiana, technology company executives, a man training to be an FBI agent, and an investment banker were among nine people charged in four separate and unrelated insider trading schemes revealed on Monday with the unsealing of indictments in New York City. It was one of the most significant attacks by law enforcement on insider trading in a decade, and a prosecutor and other federal officials pledged fresh enthusiasm for similar prosecutions in the future. They said the cheating resulted in millions of dollars of illegal profits for defendants situated on both coasts and in middle America. Stephen Buyer was accused in court papers of engaging in insider trading during the $26.5 billion merger of T-Mobile and Sprint, announced in April 2018.
/jlne.ws/3S3vEfm

Former Goldman Sachs Banker Charged in Insider-Trading Scheme; Brijesh Goel is one of nine defendants charged by Manhattan federal prosecutors in four insider-trading cases
James Fanelli and Corinne Ramey – WSJ
A former Goldman Sachs Group Inc. vice president was charged in an insider-trading scheme in which he allegedly profited by tipping off a close friend to confidential information about coming mergers and acquisitions connected to the bank. Federal prosecutors accused Brijesh Goel of relaying information from internal Goldman communications about potential takeovers the firm was considering financing. Mr. Goel’s friend traded on the tips, typically using a relative’s brokerage account to buy call options that would become profitable if the stock price of a company targeted for acquisition rose, according to an indictment.
/jlne.ws/3OzfmI6

Ex-Goldman Banker Tipped Squash Buddy on Deals, US Alleges; US claims banker texted accomplice using game talk as cover; Goldman condemns insider trading and says it is cooperating
Chris Dolmetsch, Sridhar Natarajan, and Patricia Hurtado – Bloomberg
A former Goldman Sachs Group Inc. banker was accused of passing stock tips to a squash buddy, as federal prosecutors unveiled insider-trading charges against nine people, including a onetime member of Congress and an FBI trainee. The indictment of Brijesh Goel, 37, who worked at the bank from 2013 until about 2021, was one of four unrelated cases announced Monday in New York. A former vice president at Goldman, Goel passed along information he received about potential mergers to his friend and then split the trading profits, according to prosecutors.
/jlne.ws/3OEKpSF

Barclay Brothers Brawled on Yacht Over Control of Empire; Fight revealed during court hearing where Frederick faces jail; Tycoon has failed to pay ex-wife £100 million divorce award
Jonathan Browning – Bloomberg
The Barclay brothers brawled on a luxury yacht over the control of their UK business empire, a London court was told, on the first day of a hearing where Frederick Barclay faces jail for failing to pay a penny to his ex-wife in their divorce. The relationship between the highly secretive twins, whose investments put them among Britain’s most rich and powerful, deteriorated to such an extent that the two came to blows, Hiroko Barclay, Frederick’s ex-wife, said in court Monday. She’s attempting to have the 87 year-old Frederick sent to prison over the non-payment of a £100 million ($120 million) award. “They were punching each other,” Hiroko said of Frederick and David Barclay.
/jlne.ws/3oB7NG5

Barclays to Buy Back Up to $18 Billion of Wrongly Sold Notes
Stefania Spezzati and Tom Metcalf – Bloomberg
Barclays Plc will start to buy back as much as $17.6 billion of securities, a process that should determine its losses from a paperwork blunder that saw it accidentally sell more structured and exchange-traded notes than it had registered. The bank said the repurchase period will start on Aug. 1 and will expire on Sept. 12, according to a statement Monday. Barclays separately said it plans to resume the issuance and sales of some iPath exchange-traded notes, which had been suspended in April.
/jlne.ws/3Bec9L2

Booming ETFs That Worry Wall Street Watchdogs Rake In Billions
Katie Greifeld and Emily Graffeo – Bloomberg
Traders are splurging billions of dollars on “complex” ETFs to ride out the crushing bear market across assets — just as Wall Street watchdogs threaten intrusive measures to limit retail participation. Issuers including ProShares Advisors LLC, Direxion and Innovator ETFs have been flooded with nearly $24 billion of inflows this year into these typically derivatives-powered exchange-traded funds. Investors are navigating the crash in everything from stocks and crypto to fixed income by using the ETFs to bet on more pain or to nab outsize returns during market rebounds.
/jlne.ws/3PW19pC

U.S. regulators won’t accept any restrictions on China audit access – sources
Katanga Johnson – Reuters
The U.S. public company accounting regulator will not accept any restrictions on its access to the audit papers of Chinese companies listed in New York, including where firms have been delisted, two people with knowledge of the U.S. agency’s thinking told Reuters.
/jlne.ws/3S0iQGs

Crypto CEO pleads guilty in $21 million fraud scheme
Olafimihan Oshin – The Hill
The CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS) has pleaded guilty to involvement in a $21 million cryptocurrency fraud scheme, according to the Department of Justice (DOJ). In a news release on Monday, the DOJ said the CEO, Michael Alan Stollery, pleaded guilty to one count of securities fraud. According to court documents, Stollery touted his crypto firm as a cryptocurrency investment opportunity, urging investors to purchase BARs, TBIS’s type of coin token service, through a series of false statements. Justice said Stollery did not register his company’s initial coin offering to the Securities and Exchange Commission and did not have a valid exemption.
/jlne.ws/3PCRFjh

Ukraine Invasion

Exodus of Ukrainian workers hits Europe’s emerging economies
Fanny Brodersen, Anna Koper and Michael Kahn – Reuters
Construction sites, factory assembly lines and warehouses across central Europe are scrambling to fill vacancies after tens of thousands of Ukrainian men left their blue-collar jobs to return home after Russia invaded their country. Ukrainian workers had flocked to central Europe in the past decade – drawn by higher wages and aided by an easing of visa requirements – filling jobs that weren’t highly paid enough for local workers in construction, the automotive sector, and heavy industry.
/jlne.ws/3PAVzt8

Russia struggling to repair thousands of destroyed combat vehicles, British intelligence says
Niamh Cavanagh – Yahoo
Russia is likely struggling to extract and repair combat vehicles damaged in its war in Ukraine, Britain’s Ministry of Defense has said. In a Monday intelligence update, the ministry said that a Russian army facility six miles from the Ukrainian border was created to refit and refurbish broken combat vehicles. Close to 300 damaged vehicles, including armored personnel carriers and battle tanks, were identified at the lot.
/jlne.ws/3vfhuOi

Russia’s Hunger Games: Elements by Clara Ferreira Marques; The world’s most vulnerable consumers need Ukraine’s grain to get moving again. The Kremlin, however, prefers to keep the world on edge.
Clara Ferreira Marques – Bloomberg
Hello, this is Clara Ferreira Marques with today’s edition of Elements, Bloomberg’s new energy and commodities newsletter. It mixes commentary from Bloomberg Opinion writers with the best of our market-leading news coverage. We hope you enjoy it. And if you haven’t yet signed up to receive this email every day, you can do that here. The world’s most vulnerable consumers need Ukraine’s grain to get moving again, to help cool food prices. Battle-ravaged Ukraine and its farmers need the missing revenue. The Kremlin, however, prefers to keep the world on edge — and that won’t change soon.
/jlne.ws/3zayu9w

Russia cynically threatens the Black Sea grain export deal; Moscow’s bombardment raises questions on whether ships can safely be loaded
The Editorial Board – FT
If further proof were needed of the Kremlin’s cynicism, it came this weekend. Barely had the ink dried on a deal a day earlier to allow grain exports to resume from blockaded Ukrainian ports, when Russia hit the port of Odesa with two cruise missiles; two more were shot down. The grain agreement, brokered by the UN and Turkey, aimed to avert a global food crisis that the World Food Programme has warned could push an additional 47mn people into acute hunger. If the hard-won deal now fails, the responsibility will be Moscow’s.
/jlne.ws/3vfDp89

As Prices Soar in Ukraine, War Adds Economic Havoc to the Human Toll; Fuel prices are up 90 percent from a year ago. Food costs have surged over 35 percent. Many people, with incomes no higher than before the war, are being squeezed.
Liz Alderman – NY Times
At his compact stall in Lviv’s main outdoor food market, Ihor Korpii arranged jars of blueberries that he and his wife had picked from a nearby forest into an attractive display. Fragrant dill and fresh peas harvested from their garden lay in neat piles on a table.
/jlne.ws/3RYxTR0

Exchanges, OTC and Clearing

CLS Records Continued Growth In Settled Values Of Cross Currency Swaps
Mondovisione
CLS, a financial market infrastructure (FMI) delivering settlement, processing and data solutions across the global FX ecosystem, today announced it has witnessed continued growth in settled values of cross currency swaps submitted to CLSSettlement, with a 27% year-on-year increase (Q2 2022). Cross currency swaps exhibit significant settlement risk exposure due to the high value of the initial and final principal exchanges. By using CLSSettlement, participants can mitigate the settlement risk associated with these transactions. Furthermore, as cross currency swap flows are multilaterally netted against other FX transactions within CLSSettlement, users also benefit from a significant reduction in daily funding requirements.
/jlne.ws/3PyKEQA

Shanghai Exchange Aims for Stability Ahead of Congress; The exchange said it would try to thwart big or sudden swings in capital markets, and make solid preparations to expand reforms in the initial public offering process
Reuters via Asia Financial
Officials running the exchange said they will try to ensure stability in the run-up to the party congress at the end of this year. The Shanghai Stock Exchange (SSE) has vowed to maintain market stability ahead of the 20th Party Congress later this year, while warning of “resolutely” thwarting big and swift swings in the capital markets.
/bit.ly/3PDacfp

American Financial Exchange® Posts Second Highest Weekly Volume Record Of Over $14 Billion, Nearing Levels Set In March 2020 During Height Of Pandemic
Mondovisione
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced the second highest weekly volume of $14.119 billion for the week of July 18-22, 2022. This total is only surpassed by the all-time weekly record set during the height of the pandemic on March 16-20, 2020, when $14.948 billion was transacted when AFX was the primary source of liquidity for the interbank market.
/jlne.ws/3PONMaE

MARF admits a new 200 million euro Commercial Paper Programme from securitisation fund Factor One
BME-X
BME’s Fixed Income Market, MARF, today admitted the Basic Information Document about Factor One’s Commercial Paper (CP) Securitisation Programme, a Securitisation Fund that will allow it to issue CPs up to 200 million euros. The Fund is managed by Intermoney Titulización, SGFT. Currently, the outstanding balance of securitisation assets in MARF reaches 3.9 billion euros, representing 37% of the approximately 10.6 billion euros admitted to trading on the market, including CPs, bonds, project bonds, covered bonds and other types of securities.
/bit.ly/3OAOPtK

BME, BBVA and IDB issue the first regulated bond in Spain registered with Blockchain
BME
The project will serve as the basis for the future issuance by IDB of thematic bonds in Spain, Latin America and the Caribbean; BBVA has acted as the transaction’s ‘active bookrunner’, digital custodian, tokenizer of digital money and digital structurer; This project reaffirms BME’s commitment to the development of new solutions based on blockchain technology; The issuance, book-entry, trading, settlement and corporate events processes have been implemented through smart contracts based on blockchain technology developed by ioBuilders.
BME, through Iberclear, BBVA and the Interamerican Development Bank (IDB), have completed the first bond issuance in Spain listed in a regulated market and registered using blockchain technology developed by ioBuilders. This platform could serve as a basis for future issuances in Spain and in Latin America and the Caribbean.
/bit.ly/3zbnNDG

Block Trades
CME Group
Effective on trade date Monday, August 8, 2022, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA2202-5 from May 9, 2022. It is being issued to amend Section 14 regarding derived block trades to clarify that derived block trades are only eligible in equity index products as indicated in the list of block eligible products, here.
/bit.ly/3OAHkDa

Clearstream and LCH SA add Austria and Spain to joint connection
Deutsche Börse
As from today, all Austrian and Spanish government debt securities cleared by LCH SA’s RepoClear service are available for settlement through Clearstream Banking AG. The two new markets complement the existing proposition for Belgian, French and German government debt. RepoClear clearing members can now choose Clearstream as a new settlement location for these two markets. Additionally, investors are able to consolidate an even wider range of their European settlement activity in one place, minimising cross-border inefficiencies, reducing intraday liquidity requirements and fostering global trading.
/bit.ly/3z5ToGR

Euro cease to be Negative Interest Rate Currency of Cash Margin Collateral for HKCC and SEOCH
HKEX
Margin Collateral issued by HKFE Clearing Corporation Limited (“HKCC”) and The SEHK Options Clearing House Limited (“SEOCH”). Euro will cease to be defined as a Negative Interest Rate Currency effective 1 August 2022. As a result, the interest payable or charged to Clearing Participants shall be calculated based on the prevailing bank savings rate, starting from the effective day.
/bit.ly/3oAQHYU

Satrix lists ETF on the JSE that targets smart cities
JSE
South African investors who are looking for an opportunity to invest in smart cities need to look no further following the listing of the Satrix Smart City Infrastructure Feeder Exchange Traded Fund (ETF) on the Johannesburg Stock Exchange (JSE) today. This ETF tracks the performance of companies that invest in infrastructure and technologies that transform cities into smart cities.
/bit.ly/3zydyed

Changes in Nifty Fixed Income indices
NSE
The Index Maintenance Sub-Committee – Debt of NSE Indices Limited, as part of its monthly review, announces the following replacement in Nifty G-sec (Maturity) Indices: These changes shall become effective from August 01, 2022.
/bit.ly/3OOZ3Hr

NYSE Arca Equities – CEE Ruling in MUX – McEwen Mining Inc.
NYSE
NYSE Arca Equities in conjunction with other UTP exchanges, have ruled to bust all erroneous trades in MUX – McEwen Mining Inc. executed on NYSE Arca between 4:00 and 5:30 ET today, at or above $0.3912. This ruling is not eligible for appeal.
/bit.ly/3b7qSg0

Fintech

If Only Elon Musk Snapped Instead of Tweeted; Twitter benefits from its line up of high-profile users and bots, which will likely make it more resilient in a downturn.
Tim Culpan – Bloomberg
If Elon Musk does eventually take over Twitter Inc. he will quickly discover the one feature he’s disparaged the most, bots, are the key to the platform’s ongoing growth. Musk may also be glad to see that its main rival in ephemeral social media, Snap Inc., doesn’t even have that same “problem.” Both companies reported earnings last week and similarly disappointed investors. On paper, Twitter’s performance was worse. Revenue was 11% lower than expected and operating loss missed estimates by the equivalent of 35% of sales. 1
/jlne.ws/3PE97UI

Platform boosts investors’ participation in shareholder votes; Success could encourage corporate democracy campaigners
Joshua Oliver – FT
The number of do-it-yourself investors on the Interactive Investor platform who voted on shareholder resolutions soared after the company automatically opted all of its customers into a voting and information service. The shift could encourage campaigners who have battled for greater participation by retail savers in shareholder votes, including on corporate pay, strategy and environmental, social and governance (ESG) issues.
/jlne.ws/3ou7NHU

Reinventing the wheel with web3, drug research edition; Putting a medical research facility in a casino and hoping nothing goes wrong
Alexandra Scaggs – FT
Martin Shkreli is back to his entrepreneurial ways, just a couple of months after his release from jail. Shkreli announced on Monday that he’s launching a web3 platform called Druglike. This is not a drug company, mind you – he’s banned from the pharmaceutical industry – but an open-source platform for drug research, according to a press release:
/jlne.ws/3b4ezBc

Beijing detains ex-Tsinghua semiconductor boss, report says; Former shepherd Zhao Weiguo is latest aggressive dealmaker to fall foul of Xi Jinping’s government
Edward White – FT
Zhao Weiguo, the former head of an expansive Chinese conglomerate with state backing and deep investments in the global technology sector, has been placed under investigation by officials in Beijing, according to local media. The 54-year-old, who led cash-strapped chipmaking giant Tsinghua Unigroup for a decade, has been out of contact after being taken from his home by authorities in mid-July, reported Caixin, a Chinese business publication.
/jlne.ws/3BiHzQz

Matrix Executions Achieves Record Equity Options Volumes; Growth Predicated on Sustained Client Focus
Matrix Executions, LLC (
Matrix Executions, LLC (“Matrix”), a broker-dealer specializing in trading workflow automation for options markets, today announced record 2022 Q1 and Q2 volume in their low-touch options execution business, along with an enhanced offering of specialized execution algos. In the first half of 2022, Matrix achieved: An all-time high in option volume and market share in Q2, in June, and in the first half of 2022; A 138% increase in options volume compared to 2021 H1; and More than double its 2021 options market share.
/jlne.ws/3S2c6YQ

Versana Hires Industry Veteran David Kamp as Chief Technology Officer; Senior leader joins a management team transforming the syndicated loan market
Versana
Versana today announced that industry veteran David Kamp has joined the firm as Chief Technology Officer (CTO). In this role, Kamp is responsible for Versana’s technology strategy, while building and managing its engineering and development teams. He will also collaborate closely with the company’s senior management team and client base to ensure Versana’s platform meets the high standards and technical specifications needed to create solutions for the complex syndicated loan asset class. Kamp reports directly to Cynthia E Sachs, Chief Executive Officer, and is based at the company’s headquarters in New York.
/jlne.ws/3Px5rnE

Cybersecurity

CoinLoan Partners With Blaze Information Security To Bring A New Standard Of Cybersecurity To Their Clients
Mondovisione
In the first quarter of 2022, hackers stole an estimated $1.3B from crypto companies across the globe — a number projected to go up as attacks become more frequent. In an industry fraught with cybercrime, CoinLoan’s zero-incident track record stands out as uncommonly rare. Recently, CoinLoan partnered with Blaze Information Security to further strengthen its already-stringent security standards to best protect its customers’ assets and create the most secure crypto application possible. Blaze is a well-known financial cybersecurity firm which specializes in the review and testing of a company’s current security configuration with the intent of correcting misconfigurations and helping businesses improve their resilience against cyberattacks. Its clients include top banking institutions, FinTech firms, and cryptocurrency companies like CoinLoan.
/jlne.ws/3BfNfus

Former Michigan Gov. Rick Snyder, partners launch cybersecurity firm
Candice Williams – The Detroit News
Former Michigan Gov. Rick Snyder said Monday that he and three business partners have launched a cybersecurity firm.
Called SensCy, the Ann Arbor-based cybersecurity start-up is designed to help small and medium-sized organizations, known as SMOs.
/jlne.ws/3otgQsK

Cybersecurity lessons from Russia’s war in Ukraine, according to Microsoft’s president and vice-chair
Kelsey Koberg – Fox News
Since invading Ukraine, Russia has upped their cyberattacks on the United States and its allies, according to a report from Microsoft, and there are several lessons to help protect against these attacks in the future, Microsoft President and vice-Chair Brad Smith told Fox News Digital.
A drastic cyberattack against the United States is not a far-reaching idea. In fact, according to the report “Defending Ukraine: Early Lessons from the Cyber War,” Microsoft has tracked Russian cyber hacking in 42 countries, with the United States being the top target, followed by Poland.
/jlne.ws/3zyvEwz

New York Begins $30M Program to Help Municipalities Boost Cybersecurity Efforts
Insurance Journal
New York State is beginning a $30 million shared services program designed to assist counties with cybersecurity for government systems across the state, including tools to protect against ransomware attacks.
In the initial part of the program, New York’s counties and several municipalities including Albany, Buffalo, Syracuse, Rochester, and Yonkers, will be offered CrowdStrike endpoint detection and response (EDR) services at no cost to them. EDR is a technology used to protect computers or servers by monitoring cyber threats in real-time.
/jlne.ws/3vgNTUM

Proactive auditing — a key component to an offensive cybersecurity approach
John DeSimone – Security Magazine
In today’s current threat environment, data breaches and ransomware threats have increased as cybercrime has become more sophisticated. That said, recent studies indicate that many organizations are still underperforming when it comes to taking action to enhance their cybersecurity. A survey from IBM Marketplace reveals that while 62% of organizations consider cybersecurity the top concern as they plan their IT infrastructure, almost 30% of organizations do not plan to implement cybersecurity solutions.
/jlne.ws/3b9VkX1

Cryptocurrencies

Cryptoverse: What crisis? Venture capitalists bet big on crypto
Tom Wilson, Medha Singh and Lisa Pauline Mattackal – Reuters
It’s not all doom and gloom. Even as the crypto sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that’s set to outstrip last year’s record. In the first half of the year, VCs bet $17.5 billion on such firms, according to data from PitchBook. That puts investment on course to top the record $26.9 billion raised last year, a warmer and happier time for bitcoin and co.
/jlne.ws/3PRxAFR

PBOC Official Vows to Protect User Privacy in Digital Yuan Push
Bloomberg
China will protect data related to the use of digital yuan, its central bank’s head of digital currency unit says, as the country moves forward with tests of the currency also known as e-CNY. Only a limited amount of personal information is collected when people use digital yuan, and access to it will be restricted, Mu Changchun, head of the Digital Currency Institute at the People’s Bank of China, said at a forum in Fujian, China, on Sunday. For normal transactions and purchases, neither the PBOC nor the platforms that operate and convert digital currency will be able to get all the information about the trading, Mu said. Authorities should only ask to use the data when it’s necessary to investigate transactions that are suspected of violating laws, he said.
/jlne.ws/3vbXagD

Chipotle giving away $200,000 in Bitcoin, Ethereum, and other cryptos
Chris Morris – Fortune
Chipotle is giving customers the chance to win free cryptocurrency, as it begins accepting digital currencies as payment. The company’s “Buy the Dip” promotion will give away over $200,000 in Bitcoin, Ethereum, Avalanche, Solana, and Dogecoin starting at 1:00 p.m. ET on Monday. Most players, though, are likely to walk away with promo codes for guacamole or queso blanco for one cent.
/jlne.ws/3z8hIbl

Binance’s Changpeng Zhao sues Bloomberg publisher in HK
Timmy Shen – Forkast
Binance founder and CEO Changpeng Zhao is suing the Hong Kong publisher of Bloomberg Businessweek for defamation for an article published last month. Zhao Monday filed a lawsuit in Hong Kong against Modern Media Co. Ltd., which publishes the Chinese edition of Bloomberg Businessweek, for a June article once titled and translated as “Changpeng Zhao’s Ponzi Scheme”. The traditional Chinese title was later tweaked to “Secret Changpeng Zhao”.
/jlne.ws/3BkkbSM

Mexican crypto exchange Bitso reaches more than 1 million users in Brazil
Reuters
Mexican cryptocurrency exchange Bitso has hit the one million users mark in Brazil about a year after it launched in the country, according to the company’s Brazil chief. “We beat 1 million users in Brazil earlier than expected, and our transaction volumes grew by 66% in June from May,” Thales Freitas told Reuters in an interview.
/jlne.ws/3Jld1Qd

Kirkland & Ellis Is the Go-To Law Firm for Crypto Bankruptcies; With little case law on the books, Kirkland & Ellis is working on crypto bankruptcies that could set precedents for the industry.
Victoria Vergolina – Bloomberg
There’s an old joke in finance: when companies fight, lawyers win. And right now in crypto, lots of companies are fighting – many for their corporate lives. Kirkland & Ellis, one of the biggest law firms in the world by revenue, has emerged as a major player in crypto. Earlier this month, the firm signed on to work on the bankruptcy filings for both Celsius Network and Voyager Digital. There’s relatively little case law that addresses how crypto assets – and their holders – should be treated in bankruptcy. That means that any legal precedents set now could have wide-ranging implications for an industry notorious for its boom-and-bust cycles.
/jlne.ws/3BhWzxS

Mark Cuban warns bitcoin, crypto face looming SEC ‘nightmare’
Thomas Barrabi – NY Post
Tightened SEC regulation of the cryptocurrency industry represents a potential “nightmare” for the struggling sector, whose prices already have been battered by surging interest rates and recession fears, billionaire Mark Cuban warned on Twitter. Cuban provided his dire warning in response to a tweet from Sen. Pat Toomey (R-Pa.), who had slammed the SEC after it brought insider trading charges against a former Coinbase product manager. The senator said the SEC took an enforcement action without clarifying why it views certain digital coins as “securities” similar to stocks or bonds.
/jlne.ws/3vkd0WH

What to Know About NFTs and the ‘Bored Ape’ Boom and Bust Cycle
Prarthana Prakash – Bloomberg
Since NFTs, or nonfungible tokens, screamed into public consciousness in 2020 with million-dollar sales of digital artifacts, the debate surrounding them has gone more or less like this: NFTs are the future of art and commerce! No, NFTs are a worthless scam! No, NFTs have a useful if limited future doing something that’s not quite clear yet! In the world of digital currencies, those are familiar arguments. So is the boom and bust cycle NFTs have been through, with big bucks made and lost along the way. For instance, the price to join the Bored Apes Yacht Club by purchasing an NFT of an image of a bored ape soared to $420,430 before falling almost 79% in June, while the JPG NFT Index, which tracks a handful of blue-chip NFT projects, by June was down by more than 70% since its inception in April.
/jlne.ws/3cw8qy0

Politics

EU Nations Reach Agreement to Reduce Gas Use for Next Winter; Ministers sign off on voluntary rules to cut demand by 15%; Rules may become mandatory under emergency supply situation
John Ainger and Alberto Nardelli – Bloomberg
European Union countries reached a political agreement to cut their gas use by 15% through next winter as the prospect of a full cut-off from Russian supplies grows increasingly likely. Energy ministers meeting in Brussels gave the green light to a proposal to voluntarily cut their gas usage over the next months, the Czech presidency of the EU said in a post on Twitter. The plan makes the 15% target mandatory under an emergency situation — such as a severe disruption to flows from Russia — albeit with certain opt-outs for particularly vulnerable nations or those integral to the bloc’s network as a whole.
/jlne.ws/3vfj3vE

Elements: Putin, Natural Gas and Democracy; In his energy war with the nations backing Ukraine, Vladimir Putin can take advantage of a defining strength of the West: democracy.
Liam Denning – Bloomberg
An aficionado of judo, Russian President Vladimir Putin likes to turn his opponents’ strengths against them. In his energy war with the nations backing Ukraine, he can take advantage of a defining strength of the West: democracy. Having denied Putin a quick victory, Ukraine is embroiled in a grinding war, relying on Western aid. The US and allies have also begun to slowly implement sanctions on Russia’s vital energy exports. Rather than wait around, Putin has weaponized them already.
/jlne.ws/3cvrkFe

Trump Is Plotting to Blow Up the Constitution; Contempt for the rule of law appears to be emerging as the main qualification for a job in a second Trump administration.
Jonathan Bernstein – Bloomberg
The must-read reporting over the weekend was Jonathan Swan’s series at Axios exploring the efforts of former President Donald Trump’s supporters and other Trump-friendly Republicans to prepare to staff a potential Trump second term. During the presidential nomination competition in 2015-2016, Republican party actors generally opposed Trump, in part because they considered him a risky general election candidate and in part because they were not convinced he would be reliable on matters of public policy.
/jlne.ws/3b3IlpF

House stablecoin bill held up on federal wallet standard: source
Jennifer Schonberger – Yahoo! Finance
Republicans and Democrats on the House Financial Services Committee are at loggerheads over a provision on how to treat digital wallets for draft legislation to regulate stablecoins, according to a person familiar with the matter. The bill is now not likely to get marked up until September, though it’s possible some sort of draft language could be released this week. But a source tells Yahoo Finance even that’s up in the air. At issue: including strong provisions for digital wallets to protect consumers. Democrats at Treasury — who went back and forth with the Committee all weekend — want a federal standard for wallets that would bar custodial wallets from becoming a shadow bank. Democrats also want to ban custodians from taking customers’ stablecoins and using them as liabilities to make loans or hold other riskier assets.
/jlne.ws/3J50bVM

Bipartisan Bill to Regulate Stablecoin Is Delayed for at Least Several Weeks; Lawmakers continue to negotiate deal, but unable to complete work ahead of August break
Andrew Ackerman – WSJ
U.S. House lawmakers are delaying consideration of a bipartisan bill to curb potential risks posed by so-called stablecoins, according to people familiar with the matter, pushing back a vote on the measure for at least several weeks. The potential deal would have marked the first significant step to apply tougher rules on the cryptocurrency industry, which developed with virtually no regulation. Biden administration officials and a bipartisan group of lawmakers worry that current laws don’t provide comprehensive standards for the new assets and have warned of potential risks to financial stability posed by stablecoins, a type of cryptocurrency intended to be pegged to the dollar or another national currency.
/jlne.ws/3zbs61Q

Estonia’s prime minister has a message for the West: ‘Don’t worry about Putin’s feelings’
Michael Weiss – Yahoo News
Sitting in her office in Stenbock House, a well-appointed neoclassical building in the heart of Tallinn’s medieval Old Town, Prime Minister Kaja Kallas wanted to discuss the last 80 years of European history. But she had only 20 minutes.
/jlne.ws/3J5vZtE

Regulation

Former Goldman banker, ex-FBI trainee charged with insider trading
Luc Cohen – Reuters
A former Goldman Sachs banker, a former FBI agent trainee, and a technology executive were among those charged on Monday with insider trading in separate schemes that together generated millions of dollars in profits, U.S. prosecutors said. “Each of the defendants charged today corrupted the integrity of the markets,” Damian Williams, the top federal prosecutor in Manhattan and one of Wall Street’s main cops, told reporters. The U.S. Securities and Exchange Commission (SEC) filed related civil charges over the trading schemes. Among those charged were former Goldman Sachs Vice President Brijesh Goel, who faces six counts of securities fraud and obstruction of justice for allegedly giving a co-conspirator non-public information about potential mergers and acquisitions beginning in February 2017. He now works at private equity firm Apollo Global Management.
/jlne.ws/3J8Rj1K

Former U.S. congressman Buyer charged with insider trading ahead of telecoms merger
Luc Cohen – Reuters
Former U.S. Congressman Stephen Buyer has been charged with insider trading over purchases of shares in telecommunications company Sprint before it merged with T-Mobile US Inc, prosecutors said on Monday. Buyer, a Republican who represented Indiana in Congress between 1993 and 2011, was working as a consultant to T-Mobile ahead of the 2018 merger, according to an indictment filed by federal prosecutors in Manhattan. “It’s always troubling whenever there’s someone who has had a position of public authority… engaged in this conduct,” Damian Williams, the top federal prosecutor in Manhattan, told reporters. Andrew Goldstein, a lawyer for Buyer, said the former congressman is innocent and that his stock trades were lawful. “He looks forward to being quickly vindicated,” Goldstein said in a statement.
/jlne.ws/3zvt62m

SPTF And Cambodia Microfinance Association Sign Agreement To Strengthen Client Protection In Cambodia’s Financial Services
Mondovisione
The Social Performance Task Force (SPTF) and the Cambodia Microfinance Association (CMA) have a new memorandum of understanding to strengthen responsible, inclusive finance in Cambodia. SPTF and CMA signed the agreement at an event on July 22 at the Hyatt Regency in Phnom Penh along with senior management from the National Bank of Cambodia. Financial inclusion stakeholders from around the world joined the event virtually. “This new partnership, a first of its kind, will help chart a roadmap for responsible growth, financial stability and customer protection in Cambodia’s microfinance and broader financial sector,” said Nitin Madan, the SPTF Director of Responsible Inclusive Finance Facility for Southeast Asia (RIFF-SEA). “The CMA and its members can also apply for co-financing for implementing and strengthening capacity on responsible, inclusive finance practices of financial service providers in Southeast Asia.”
/jlne.ws/3vf7FQD

Titanium Blockchain CEO Pleads Guilty to Fraud; Michael Alan Stollery pleaded guilty to one count of securities fraud related to a $21 million initial coin offering
Mengqi Sun – WSJ
Titanium Blockchain Infrastructure Services Inc.’s founder and chief executive has pleaded guilty for his role in a cryptocurrency fraud scheme that involved raising about $21 million in an initial coin offering, the U.S. Justice Department said. Michael Alan Stollery, 54, of Reseda, Calif., pleaded guilty to one count of securities fraud in the U.S. District Court in Los Angeles on Friday after being charged in June.
/jlne.ws/3z8e0hL

SEC Charges Former Indiana Congressman with Insider Trading
SEC
The Securities and Exchange Commission today filed insider trading charges against Stephen Buyer, a former U.S. Representative for Indiana’s 4th Congressional District.
According to the SEC’s complaint, after leaving Congress in 2011, Buyer formed a consulting firm, the Steve Buyer Group, which provided services to, among other clients, T-Mobile. In March 2018, Buyer attended a golf outing with a T-Mobile executive, from whom he learned about the company’s then nonpublic plan to acquire Sprint. Buyer began purchasing Sprint securities the next day, and, ahead of the merger announcement, he acquired a total of $568,000 of Sprint common stock in his own personal accounts, a joint account with his cousin, and an acquaintance’s account. After news of the merger leaked in April 2018, Buyer saw an immediate profit of more than $107,000.
/jlne.ws/3vgxpfe

SEC Files Multiple Insider Trading Actions Originating from the Market Abuse Unit’s Analysis and Detection Center
SEC
The Securities and Exchange Commission today filed insider trading charges against nine individuals in connection with three separate alleged schemes that together yielded more than $6.8 million in ill-gotten gains. Those charged include a former chief information security officer (CISO), an investment banker, and a former FBI trainee, all of whom allegedly shared confidential information with their friends, who then traded on that confidential information. Each of the three actions announced today originated from the SEC Enforcement Division’s Market Abuse Unit’s (MAU) Analysis and Detection Center, which uses data analysis tools to detect suspicious trading patterns.
/jlne.ws/3OwLThT

Keynote Address of Chairman Rostin Behnam at the Brookings Institution Webcast on The Future of Crypto Regulation
CFTC
Good afternoon. I am delighted to join you today. Thank you to Brookings for hosting this event, to Aaron Klein for sitting down with me following my remarks, and to the distinguished panel participants.
In a 1984 New York Times article, astrophysicist Dr. Jeremiah P. Ostriker remarked, “The discrepancy between what was expected and what has been observed has grown over the years, and we’re straining harder and harder to fill the gap.”[1] Ostriker was referring to findings that a vast majority of the mass in the universe is not detectable, but consists of “dark matter.” While it is compelling to get into a discussion about the similarities between dark matter and digital assets—and indeed, at least one author has done so with respect to Bitcoin,[2] for me, the fact that I cannot actually see either is about as far down that rabbit hole as I want to go today. What does resonate, since watching the cryptoverse develop and expand over the last several years, is that the space has not necessarily evolved in ways we may have anticipated. Neither has our regulatory approach—and we are now straining harder and harder to fill that gap.
/jlne.ws/3J6qefm

SEC Charges Investment Banker and His Friend with Insider Trading
SEC
The Securities and Exchange Commission today filed a complaint in federal district court in Manhattan alleging insider trading by investment banker Brijesh Goel and his friend Akshay Niranjan, who was a foreign exchange trader at a large financial institution. The SEC alleges that the two men, close friends from business school, made more than $275,000 from illegally trading ahead of four acquisition announcements in 2017 that Goel learned about through his employment. The complaint further alleges Niranjan purchased call options on the target companies and later wired Goel $85,000 for Goel’s share of the proceeds.
/jlne.ws/3vfgIAM

Investing and Trading

Coinbase, Robinhood Shareholders Face Significant Stock Dilution: JPMorgan
Michael Bellusci – Coindesk
Shareholders of crypto exchange Coinbase (COIN) and brokerage platform Robinhood Markets (HOOD) face risk of higher share dilution stemming from restricted stock units (RSU) included in employee compensation plans, JPMorgan (JPM) said in a note to clients Monday.
/jlne.ws/3orHzGe

Post-Covid, Elvis Presley’s Graceland bonds default
Alexandra Peers – CNN Business
“The Mississippi Delta is shining like a National guitar… And for reasons I cannot explain there’s some part of me wants to see Graceland.” Paul Simon released that anthem about the historic Memphis home of Elvis Presley in 1986, about a decade after the death of the famed singer. Much has changed. Covid-19 hurt Graceland so much that Tennessee state-issued bonds tied to tourist revenue have gone into default. The city of Memphis, the state and Elvis Presley Enterprises are squabbling over how this happened and how to fix a slide that brought some $20 million of Graceland Project bonds down to “junk” status. Now, in the home of the King, there’s a whole lot of finger-pointing going on.
/jlne.ws/3PCchZc

Bond Investors Need to Liquidate China Evergrande Now; A drawn-out restructuring gives the developer time to do side deals with friendly creditors.
Shuli Ren – Bloomberg
When it comes to collecting debt from distressed companies, a wait-and-see attitude will only end up with investors losing everything. That’s especially true with China’s real estate developers. China Evergrande Group’s woes have been festering for more than a year. It was labeled a defaulter by international ratings agencies in December. Yet the developer still has not published a restructuring proposal. It has promised to release a preliminary plan by the end of July, but details will most likely be sparse.
/jlne.ws/3OyJYtm

Mexico’s ‘Super Peso’ Shocks Traders Who Were Betting on Wipeout; Mexico is benefitting as factories ‘nearshore’ from China; It’s the beginning of a turnaround from two decades ago
George Lei and Michael O’Boyle – Bloomberg
Amid the carnage in emerging-market currencies this year, there’s been a surprisingly resilient outlier: the Mexican peso. It’s held up as almost every peer succumbed to the dollar’s relentless push higher, an outperformance so stark that a few analysts have taken to calling it the “super peso.” Some of the strength stems from fairly typical drivers — a tight fiscal policy and interest-rates increases that have lifted the carry trade. But another key factor is expectations for a sea change in global trade in coming years that could bring a surge in foreign direct investment.
/jlne.ws/3PLCFiW

Transition to RFRs Review: First Half of 2022 and the Second Quarter of 2022
ISDA
The Transition to Risk-free Rates (RFRs) Review analyzes the trading volumes of over-the-counter (OTC) and exchange-traded interest rate derivatives (IRD) that reference selected alternative RFRs, including the Secured Overnight Financing Rate (SOFR), the Sterling Overnight Index Average, the Swiss Average Rate Overnight, the Tokyo Overnight Average Rate, the Euro Short-Term Rate and the Australian Overnight Index Average.
/jlne.ws/3vfNIZT

Environmental, Social and Corporate Governance

A Chef Tackles Inequality by Opening Farms in Black Communities; Chris Williams is reconnecting residents of a tiny Texas town with their agricultural roots.
Kate Krader – Bloomberg
Farming was at the heart of Kendleton, Texas, when the tiny community was established more than a century and a half ago. After the Civil War ended in 1865, formerly enslaved Americans purchased plots from a plantation owner to harvest cotton, corn, and wheat, and to grow produce for their families. But over the years the farmland has been increasingly dedicated to raising cows, pigs, and chickens, or gone unused because of competition from bigger agribusinesses. Now, few of the 339 residents, 77% of whom are Black, farm their own properties—and Kendleton, which is in Fort Bend County and a 45-minute drive southwest of Houston, is considered a food desert. The nearest supermarkets with any sizable quantity of fresh fruits and vegetables are more than 20 miles away in Richmond.
/jlne.ws/3RUYyyd

ESG Is More Important Than Ever—Here’s Why; Jag is the founder and CEO of Certa, a third-party lifecycle management platform for procurement, compliance and ESG.
Jagmeet Lamba – Forbes Business Council
Every year, the call for increased sustainability—in everything from operations to products to the very people we do business with—grows louder. Stakeholders want transparency into what businesses are doing to increase their sustainability. Customers want it from their brands, as they look for shared values when making purchasing decisions. Partners and suppliers, too, look for demonstrable actions toward ESG (that’s environmental, social and governance) initiatives. And investors, knowing that customers and partners’ evaluation of a company’s sustainability holds real weight, want that transparency as well. Beyond the most obvious reasons for organizations to pursue real sustainability, recent years have shown that prioritizing ESG can be a competitive differentiator. Those that ignore it do so at their own peril.
/bit.ly/3ovegCx

The bright spots in a complicated ESG framework
Humzah Yazdani – World Economic Forum
ESG investing is a fast growing sector of finance, and, according to Bloomberg Intelligence, global ESG assets are likely to surpass $41 trillion in 2022 and $50 trillion by 2025.
ESG is now an essential component in every corporate strategy from a risk mitigation and opportunity optimization standpoint.
Creating measurable recognized standards for ESG investment, where failure to meet these results in penalties, enables investors to better evaluate ESG commitments.
Is ESG a distraction from climate change? That was the subject of a panel discussion at the recent New York Times Climate Forward conference. Environmental social and corporate governance (ESG) is a risk management tool to cater to long-term risks that organizations are likely to face in the future. It is a fast-growing sector of finance, and, according to Bloomberg Intelligence, global ESG assets are likely to surpass $41 trillion in 2022 and $50 trillion by 2025.
/bit.ly/3S0QfAK

ESG Is Far More Than a Marketing Gimmick; It can be a boon to investors, markets and future generations.
Peter Coffin – WSJ Letters
Andy Kessler’s “The Many Reasons ESG Is a Loser” (Inside View, July 11) criticizes greenwashing and calls out managers who appear to be using environmental, social and governance investing to charge higher fees. While these practices are regrettable and speak to the need for greater scrutiny, they should do nothing to diminish the importance of considering ESG factors. At bottom, ESG is not a product. ESG data is nonfinancial information that can be helpful in analyzing a security issuer’s future prospects. If grounded in investment-relevance, ESG research can provide a more holistic view of long-term risks and costs, shifting the sightlines of investors a little further out on the horizon.
/on.wsj.com/3J51Sma

1 Fund, 3 Names and Lots of Questions for BlackRock’s ‘ESG’; BlackRock Chief Executive Officer Larry Fink has taken flak from all sides for promoting environmental, social and governance-style investing.
Silla Brush – Daily Business Review
The first was billed as an “impact” investment, the second as an “ESG” investment and the third as “sustainable” investment. In fact, those three BlackRock Inc. mutual funds started out as the same fund—one that was marketed and remarketed under different names at different times as Wall Street sold the idea of investing with a social purpose. How and why the switch was made, not once but twice in six years, is a story for these uneasy times in environmental, social and governance investing.
/bit.ly/3zsxEFB

Environmental Groups Ask Tesla to Stop Nickel Plans in Indonesia
Annie Lee – Bloomberg
Environmental groups urged Tesla Inc. on Monday to reconsider its plans for nickel investment in Indonesia, the world’s top producer of the material, as ESG scrutiny mounts in an industry crucial to the electric vehicle revolution.
/jlne.ws/3S0qiRW

The oil dealmaker: Total’s Patrick Pouyanné is not backing down; The TotalEnergies CEO backs controversial new oil and gas projects even as he pushes billions into clean energy. How long can he have it both ways?
Sarah White and Tom Wilson – FT
This year Patrick Pouyanné, chief executive of TotalEnergies, was en route to Mozambique when he stopped off in the tiny central African nation of Rwanda. Rwanda has no oil and gas reserves and a small domestic market of 13mn people. Yet Pouyanné and Rwanda’s president Paul Kagame signed a co-operation agreement anyway, agreeing to explore opportunities to develop renewable energy projects. The proposal was of little commercial value to the French oil major. But in the preceding months Rwanda had made itself invaluable to Total by deploying 1,000 troops Mozambique to quell an Islamist insurgency that had halted the company’s plans for a mammoth gas project.
/jlne.ws/3cK0o4U

Institutions

UBS Drops on Profit Miss as Investors Flee Global Stock Slump; Asset management sees $12 billion in outflows during quarter; UBS sees net income of $2.1 billion as it confirms buyback
Myriam Balezou – Bloomberg
UBS Group AG shares slumped after weaker-than-expected profit in the second quarter, as the global market sell-off kept wealthy clients on the sidelines and institutional investors pulled funds. The Zurich-based bank reported net income of $2.1 billion, compared with analyst estimates of $2.4 billion. The quarter was impacted by lower revenues at the key wealth management business, outflows in asset management and investment banking results that also trailed expectations.
/jlne.ws/3RZr0il

HSBC’s past may not help its futureThere is no place in the new Hong Kong for a bank which is not institutionally subject to the Chinese government
Michael Sheridan – FT
Some very sharp minds are currently trying to divine the future of HSBC by working out how its return on equity, dividends, regulation and capital base would change if the bank is broken up as its biggest shareholder, the Chinese insurer Ping An, has recently demanded.
/jlne.ws/3cE1QFO

Goldman Sachs Chases Its Main Street Banking Ambitions—Slowly; The Wall Street powerhouse is betting on checking accounts, new partnerships to give its consumer bank a boost
Charley Grant and AnnaMaria Andriotis – WSJ
Goldman Sachs GS 0.06%? Group Inc. first started taking deposits from ordinary savers more than six years ago. It still has a way to go before it can call itself a full-service consumer bank. The bank has invested billions of dollars in Marcus, the consumer arm named after the firm’s founder. Its high-yield savings accounts have amassed more than $100 billion in deposits, but its long-delayed checking account remains in beta testing. Its credit-card business has struggled to grow much beyond the splashy offering it launched with Apple three years ago. Marcus offers installment loans for big-ticket purchases, but no auto loans or mortgages.
/jlne.ws/3PReEYl

Wellness Exchange

Think You’ve Never Had Covid-19? Think Again; Most people have been infected with the virus, epidemiologists say, even if some don’t realize it
Julie Wernau – WSJ
Charley Ding spent weeks early in the pandemic intubating patients sick with Covid-19. The 42-year-old anesthesiologist in South Barrington, Ill., said he has since watched most of the doctors and nurses he works with get infected at some point. But he has never gotten Covid-19, he said. “It’s probably a combination of being careful, maybe being blessed with a good immune system,” he said. “But also just luck.” Dr. Ding is a member of a shrinking club of people who are pretty sure they have never been infected with SARS-CoV-2, the virus that causes Covid-19. Geneticists and immunologists are studying factors that might protect people from infection, and learning why some are predisposed to more severe Covid-19 disease. For many, the explanation is likely that they have in fact been infected with the virus at some point without realizing it, said Susan Kline, professor of medicine at the University of Minnesota Medical School. About 40% of confirmed Covid-19 cases are asymptomatic, according to a meta-analysis published in December in the Journal of the American Medical Association.
/jlne.ws/3or8jXr

Why the WHO Wants Everyone to Wake Up About Monkeypox; The emergency declaration might be controversial, but the virus is spreading and countries need a more robust response.
Therese Raphael – Bloomberg
The World Health Organization had a hard time deciding whether to label monkeypox a public health emergency of international concern (PHEIC) or not. That’s a rare designation, given to Covid-19 and a handful of other diseases such as swine flu in 2009, polio in 2014 and Ebola (twice). It carries binding legal commitments for member nations to act. A majority of the WHO’s Emergency Committee, however, was unconvinced that monkeypox qualified. WHO Director General Tedros Adhanom Ghebreyesus, who came under criticism for being slow to declare Covid-19 a pandemic and too deferential to China, cast the deciding vote. With a rising number of monkeypox cases around the world — some 16,000 have now been reported in 75 countries — the WHO chief clearly wanted to err on the side of caution.
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Regions

Global gasoline cracks collapse, blow to refiners’ profits
Mohi Narayan, Laura Sanicola and Shadia Nasralla – Reuters
A sudden crash in global gasoline prices in the past two weeks has dented refiners’ profits, pushing up inventories in key trading hubs around the world while looming exports from China and India also add to pressure on growing stockpiles. Refiners will be forced to cut gasoline output to safeguard themselves against losses and switch to producing more profitable fuels, traders say, but summer demand is also being hurt by high pump prices in the United States and Europe, and by instability and easing seasonal demand in some parts of Asia. This has led to a rise in inventories from Singapore to Amsterdam-Rotterdam-Antwerp and the United States, according to traders, analysts and inventory data.
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Hong Kong’s Fix for China’s Mortgage Boycotts; The presales model has advantages for both buyers and developers—but the apartments have to get built.
Shuli Ren – Bloomberg
The refusal of some Chinese consumers to pay mortgages on unfinished homes has shed light on the sales model that dominates the country’s trillion-dollar real estate market, where apartments are often bought 18 months to two years before they’re completed. Presold units account for more than 70% of residential home sales.
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China’s Rural Banking Smash-Up; Problems at small-town banks have been gestating for years, but they are now coming to a head—with unpredictable consequences
Nathaniel Taplin – WSJ
A protest by bank depositors in the province of Henan has been put down forcibly. Meanwhile, home buyers with mortgages—but not yet finished apartments—throughout China are making noises about halting payment. For a Chinese economy already in significant trouble, these are eye-opening headlines. The problems in Henan are partly about a discrete case of financial malfeasance—an investigation by China’s banking regulators found that a private investment group called Henan New Wealth Group has been illicitly siphoning off deposits from small banks. But they come against an extremely worrying backdrop. Property prices in small Chinese cities are falling rapidly. Developers, unable to access finance and watching their sales dry up, have halted construction on many presold homes—and the online movement to halt mortgage payments threatens to compound their woes by further spooking banks. All this comes after many small Chinese lenders have seen their capital adequacy levels plummet over the past half-decade.
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Why a Primary Listing in Hong Kong Matters for Alibaba, BiliBili
Filipe Pacheco – Bloomberg
The decision by Alibaba Group Holding Ltd. to change its listing status in Hong Kong to “primary” from “secondary” is a move similar to that taken by other companies in the Asian hub recently and might spur others to do the same. What are reasons for such a switch? 1. What is a primary listing? It refers to the main stock exchange where a public company’s shares are traded. In order to list, a firm has to fulfill requirements of that market. Secondary listings, often subject to less-stringent regulation, offer a separate trading venue that may increase liquidity in trading of the shares and provide access to a wider pool of investors — a key in the case of Hong Kong.
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Zimbabwe debuts gold coins as legal tender to stem inflation
Farai Mutsaka – AP
Zimbabwe has launched gold coins to be sold to the public in a bid to tame runaway inflation that has further eroded the country’s unstable currency. The unprecedented move was announced Monday by the country’s central bank, the Reserve Bank of Zimbabwe, to boost confidence in the local currency. Trust in Zimbabwe’s currency is low after people saw their savings wiped out by hyperinflation in 2008 which reached 5 billion%, according to the IMF. With strong memories of that disastrous inflation, many Zimbabweans today prefer to scramble on the illegal market for scarce U.S. dollars to keep at home as savings or for daily transactions. Faith in Zimbabwe’s currency is already so low that many retailers don’t accept it. The central bank disbursed 2,000 coins to commercial banks on Monday. The first batch of the coins was minted outside the country but eventually they will be produced locally, according to the governor of the Reserve Bank of Zimbabwe, John Mangudya. The coins can be used for purchases in shops, depending on whether the shop has enough change, he said.
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Kremlin: Nord Stream 1 turbine not arrived yet, a second has defects
Reuters
The Kremlin said on Tuesday that a repaired gas turbine for Nord Stream 1, Russia’s biggest gas pipeline to Europe, had not yet arrived after maintenance in Canada and that a second turbine was showing defects.
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£14 Billion of Cash Could Soon Be Worthless. Here’s What to Do With It; The Bank of England’s £20 and £50 paper banknotes will no longer be legal tender starting in October.
Conrad Quilty-Harper – Bloomberg
Got an old £20 or £50 note in your wallet? If it’s made of paper, you might want to spend it or deposit it soon. As of Sept. 30, the note will no longer be legal tender. That’s the cutoff date for using the old notes set by the Bank of England, with new polymer notes featuring mathematician Alan Turing and artist J.M.W. Turner replacing the old paper variations.
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Heat Wave Hits U.S. Farms, Stressing Crops and Ranchers’ Herds; Weather issues give U.S. growers anxiety in a year when a banner harvest would help global food concerns
Patrick Thomas – WSJ
Intense heat and dry conditions are stressing U.S. agriculture, threatening corn, soybeans and other crops, as well as cattle herds. Scorching temperatures this past week have put swaths of the U.S., especially in the South and West, under excessive-heat warnings and advisories. The hot weather is hitting during an important period of the Midwest crop-growing season, analysts said, and just as some commodity prices ease amid concerns about global food supplies. The heat is also exacerbating longer-running drought conditions in parts of Kansas, Oklahoma, Texas and other states, risking harm to livestock, parching pastures and leading ranchers to spend more on supplemental feed for cattle.
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Miscellaneous

Hybrid Work Reduced Attrition Rate by a Third, Study Shows
Reade Pickert – Bloomberg
Hybrid work reduced attrition rates at a large technology firm by 35% and improved self-reported work satisfaction scores, with no negative impact on performance ratings or promotions, according to a new study co-authored by Nicholas Bloom of Stanford University. After the explosion of remote work during the pandemic, many companies have now adopted hybrid work arrangements for their employees. This typically involves working two to three days each week at the office and the rest at home, allowing employees to split tasks best done in person and those best done individually. With the unemployment rate near its lowest level in five decades, even some of the staunchest critics of work-from-home have changed their tune to attract and retain employees.
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Record Temperatures, Wildfires Wreak Havoc on Europe’s Winemakers; Growers fear yields could be 25% smaller than usual.
Elin McCoy – Bloomberg
In Portugal’s Douro Valley on July 7, a wildfire burned close to Oscar Quevedo’s Quinta da Alegria vineyard. By the middle of the night, flames surrounded it. The vines around the edges, amounting to about a hectare, burned. In his 39 years, Quevedo says, “I had never seen such a big and fast fire in the heart of the Douro.” All over Europe, temperatures in wine regions have been sweltering at new highs, and heat waves are moving north into such normally cool countries as Germany. In the UK, temperatures above 40C (104F) were recorded for the first time. Winemakers worry this will lower yields by 25% or more for this vintage. Many had already been slammed by early frost and hail. Increasingly intense heat waves are signaling that conditions could become even more extreme and unpredictable over time.
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Job Switchers Are Earning a Lot More Than Those Who Stay; Even if you’re happy at your job, getting a new job for more pay is a good strategy as inflation eats into paychecks
Julia Carpenter – WSJ
It often pays to switch jobs, and now is one of the best times to do it. The pay difference between those who stay and those who changed jobs is growing, according to the Federal Reserve Bank of Atlanta. Job stayers, or people who stayed in their job for the past three months, increased their wages by about 4.7% as of June 2022. Meanwhile, those who switched jobs received a raise of 6.4%. The gap is the largest in two decades.
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