Facebook gives up on digital payments ambitions with Diem asset sale

Jan 27, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Streets Consulting pulled a major coup by hiring Clare Black as managing director. The U.K. based financial services and technology business development, marketing and communications consulting firm announced the hire today in a press release. Black recently left Innovate Finance, where she served as director of corporate affairs & communications for the U.K. fintech industry trade body.

Black is a veteran of 25 years in the financial services industry, which has taken her across Europe, West Africa, North America and the U.K. in a number of roles, including communications and consultancy, diversity and inclusion, research director, editor and journalist. She has also spent a number of weeks each March in Boca Raton, Florida with her husband, Clive Furness, the CEO of Contango Markets Limited. Clive is a member of the JLN Advisory Committee.

Japan Exchange Group, Inc. and its consolidated subsidiaries have issued their financial results for the nine months ended December 31, 2021. JPX has also offered an overview of earnings for the third quarter of the fiscal year of 2021 for the exchange group.

There are a bunch of U.S. football teams who are hiring general managers and coaches (none of them named Ted Lasso) and the Minnesota Vikings have hired a former Wall Street trader, Kwesi Adofo-Mensah, as their general manager, the New York Post reported. Adofo-Mensah is an “Ivy League-educated data expert” who came from the Cleveland Brown football organization’s front office before joining the Vikings.

While on the theme of football, American style, The Week has a story just in time for the Super Bowl titled “The spectacular risk of cryptocurrency investing. Don’t let Matt Damon neg you into losing all your money.”

And this is not all about football, but Sports Illustrated has a story titled “Bitcoin Price Drop Stings for Athletes Taking Salaries in Cryptocurrency” about all those athletes that wanted to show their cool-factor by getting paid in bitcoin.

Someone commented on one of my stories about NFTs by saying, “I’m not sure why everyone keeps using the abbreviation NFT for Decentralized Ponzi Scheme.”

I encourage you to check out the offer from Quantpedia in JLN this week. It is a tool that can save you a lot of time and effort.

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


There’s still time to register for this year’s FIA-SIFMA Asset Management Derivatives Forum February 7-9 in Dana Point, California. FIA and SIFMA AMG are bringing together market participants from all sides of the trade to examine the latest developments impacting the use of derivatives by asset managers. The event will feature keynote sessions with Bank of England Deputy Governor Sir Jon Cunliffe and former CFTC Chairman Timothy Massad. This year’s program also covers UMR, ESG, global considerations, clearing trends, the future of work and more. You can get more information and register here.~SR


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Streets Consulting appoints Clare Black as Managing Director; Former Director of Corporate Affairs and Communications at Innovate Finance joins Streets Consulting to steer the business through its next phase of growth
Streets Consulting
Streets Consulting, the financial services and technology business development, marketing and communications consultancy, today announced the appointment of Clare Black as Managing Director. Clare joins from Innovate Finance, where she served as Director of Corporate Affairs & Communications for the UK Fintech industry trade body. Reporting to the founder & CEO, Julia Streets, Clare will be responsible for the strategic direction of the business, building on its successful history of growth. Clare brings with her more than 25 years of experience in financial services that has taken her to Europe, West Africa, North America and across the UK, in a variety of roles, including communications and consultancy, diversity and inclusion, research director, editor and journalist.

****** Congratulations to Clare on her new position and Julia on a great hire!~JJL


It’s Hard to Tell When the Crypto Bubble Will Burst, or If There Is One; Crypto prices are highly volatile, as this week’s sell-off showed. But die-hard enthusiasts believe prices will keep soaring in a world where traditional notions of value don’t apply.
Emily Flitter – NY Times
Since late November, some of the world’s savviest cryptocurrency investors have been hooked on a game that has cartoon sheep, cartoon wolves, a digital currency called $wool — and the potential to make real money. Graham Friedman, a self-described crypto evangelist, is among them. Mr. Friedman put up more than $20,000 of his own money to buy one wolf and one sheep — or, rather, unique digital images of them called nonfungible tokens.

****** Here is what you do. You put some soap and water on the bubble and if you get more bubbles, then it is a leaking bubble. If it does not leak, then you keep riding it.~JJL


To Breed or Not to Breed? In a world of pandemic chaos, political strife and climate catastrophe, some would-be parents see the future as too dark to procreate.
Alex Williams – NY Times
Before she married her husband, Kiersten Little considered him ideal father material. “We were always under the mentality of, ‘Oh yeah, when you get married, you have kids,” she said. “It was this expected thing.” Expected, that is, until the couple took an eight-month road trip after Ms. Little got her master’s degree in public health at the University of North Carolina in Chapel Hill, N.C.

****** The human species is very resilient. It can overcome this darkness. Have faith! ~JJL


JPMorgan fights nuns and activists over climate disclosure proposals; Renewed pressure on the biggest global lender to fossil fuel companies
Patrick Temple-West – FT
JPMorgan Chase is fighting four shareholder petitions related to climate change at the Securities and Exchange Commission, in spite of a new policy by the US agency to take a tougher stance against attempts to block investor votes. The largest lender to fossil fuel businesses, JPMorgan has faced mounting pressure from investors over climate change risk in recent years.

****** Don’t fight nuns, they fight dirty with rulers and such things.~JJL


Wednesday’s Top Three
Our top story Wednesday was, for the second time, Here’s how much money you have to earn to be in the top 1% in every US state, from CNBC. Second was DeFi Increasingly Popular Tool for Laundering Money, Study Finds, from The Wall Street Journal. Third was Citadel Securities: how the Wall Street outsider became ‘the Amazon of financial markets’, from The Financial Times.


MarketsWiki Stats
26,700 pages; 237,170 edits
MarketsWiki Statistics


Lead Stories

Facebook gives up on digital payments ambitions with Diem asset sale; Cryptocurrency project winds down, marking social media giant’s retreat from dream of revolutionising finance
James Fontanella-Khan and Hannah Murphy and Miles Kruppa – FT
The Facebook-led Diem cryptocurrency project is preparing to sell its assets, as the social media giant admits defeat in its once-sprawling digital payments ambitions. The Diem Association, which was launched by Facebook in 2019 and is supported by 25 businesses and non-profit groups, is planning to wind down, according to several people familiar with the discussions.

****The Wall Street Journal’s version of this story is here.

Retail traders keep the faith during Wall Street’s turbulent January; Amateur investors have purchased US shares every day this year even as market slides
Joshua Oliver and Madison Darbyshire – FT
Retail investors have leaned into this year’s market gyrations, pumping cash into US equities even as share prices have tumbled from the historic highs recorded at the start of January. Small-time investors have been net buyers of US equities and exchange traded funds every trading day this month, according to data from VandaTrack. The scale of daily inflows stood above the 2021 average on all but two days since the start of the year.

Robinhood’s Meme-Stock Hangover; A year later, many issues linger for the trading app at the center of the frenzy.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
Twelve months ago, thousands of retail investors banded together to bid up the stocks of a handful of ailing companies, notably the video game retailer GameStop and the movie theater chain AMC. The actions sent those shares soaring, booking huge gains on paper and dealing heavy losses to hedge funds and to other professional investors who were betting against the companies.

Investors bet billions on crypto custody providers; Fireblocks hits $8bn valuation after raising $550m in latest funding round
Eva Szalay – FT
The safekeepers of crypto assets are attracting billions of dollars from investors betting that the influx of Wall Street players into digital markets will lead to a surge in demand for custody services. Fireblocks became the highest valued crypto asset custodian on Thursday after raising $550m in a new funding round that put an $8bn price tag on the company. The figure matches the valuation achieved by FTX, one of the world’s largest crypto trading exchanges, which announced a $400m funding round on Wednesday.

Why a Bank for the Super Rich Is Taking Aim at the Younger Merely Rich; UBS’s deal to buy robo adviser Wealthfront shows how the Swiss bank is targeting the next generation of wealth.
Claire Ballentine – Bloomberg
Just the good old ultra rich won’t do anymore. UBS Group AG is going after young clients who are still accumulating wealth. The biggest Swiss bank’s deal to buy U.S. robo adviser Wealthfront for $1.4 billion signals how old-guard institutions that have traditionally catered to the world’s moneyed elite are recognizing the importance of attracting younger clients, whose vision of banking differs drastically from their elders.

There’s a New Agri-Giant Invading the U.S. Heartland; Glencore and its wheat-rich division Viterra clinch a deal with Marubeni for a Nebraska grain trader.
Javier Blas – Bloomberg
For decades, four companies have dominated the agricultural market — grain barons controlling our daily bread and beef, and, increasingly, our vegan options, too. The quartet is made up of Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co. — or ABCD for short. It’s a neat acronym for a very profitable, if low-profile, industry. Glencore Plc, the London-listed natural resources giant, is now trying to break in with its own initial. From a business perspective, the timing is perfect; from a political perspective, it may be difficult.

Bank of America looks at Hong Kong staff relocations to Singapore; Review begins to identify workers who can be moved as strict quarantine rules stifle territory’s role as regional hub
Tabby Kinder and Stephen Morris and Imani Moise – FT
Bank of America, the second-largest US bank by assets, has started a review of its Hong Kong business to identify workers who can be relocated to Singapore as severe pandemic control measures have forced global businesses to re-evaluate their operations in the Chinese territory.

Crypto, NFTs Are Rife With ‘Mountains’ of Fraud, IRS Says
Allyson Versprille – Bloomberg
IRS criminal investigators see cryptocurrencies and nonfungible tokens as ripe for fraud, including money laundering, market manipulation and tax evasion — and even celebrities could get caught up in the agency’s probes. Digital assets have been a growing concern for government agencies as they’ve become more mainstream, with regulators grappling over how to police the tokens and carry out enforcement activities to deter investors from engaging in criminal activity.

Hedge Funds Face New SEC Disclosures as Gensler Cracks Down
Ben Bain and Robert Schmidt – Bloomberg
Large hedge funds and private-equity firms may soon have to start reporting steep losses, major redemptions and other extraordinary events in near real-time to the U.S. Securities and Exchange Commission — a change that the regulator says will help it protect the financial system during meltdowns and wild swings like the meme stock mania that roiled markets a year ago.

US financial watchdog proposes tougher rules for hedge fund disclosures; SEC seeks to boost market stability with rapid updates on big losses and margin calls
Stefania Palma, Eric Platt and Philip Stafford and Chris Flood – FT
Wall Street’s top regulator has proposed new rules that would force hedge funds to report immediately when they suffer extreme losses or large investor withdrawals, in a bid to close gaps that were exposed by market ructions last year.

U.K. Has Botched Crypto, Chancellor-Turned-Adviser Hammond Says
Emily Nicolle – Bloomberg
Former official says country has less than a year to catch up; Hammond warns crypto firms will leave unless rules clarified
The U.K. has less than 12 months to regain its footing on crypto or face a loss of talent and even its status as a global financial-services leader, the country’s former Chancellor of the Exchequer Philip Hammond warned.

Susquehanna joins TP ICAP digital asset platform as market maker ahead of launch; The quantitative trading firm joins Flow Traders, Jane Street and Virtu Financial who have also agreed to provide liquidity for platform.
Annabel Smith – The Trade
Quantitative trading firm Susquehanna’s digital assets subsidiary has joined TP ICAP’s Digital Asset Platform as a market maker ahead of its upcoming launch later this year. The firm will provide liquidity for the platform which will feature a wholesale electronic over the counter (OTC) marketplace for spot crypto asset trading including in Bitcoin and Ethereum.

ESMA consults on CCP anti-procyclicality measures
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today launches a consultation paper to review the European Market Infrastructure Regulation’s (EMIR) requirements on anti-procyclicality (APC) margin measures for central counterparties (CCPs).

More online traders betting on options and futures, IG says
Sinchita Mitra – Reuters
Online traders are increasingly turning to options and futures amid high stock prices, dealing platform IG Group said on Thursday, as an easing in market volatility slowed its half-yearly profit growth. Chief Executive June Felix also told Reuters that more people were trying their hand at other asset classes such as oil and other commodities.


The World’s Next Big Health Emergency Is Already Here; Covid-19 has claimed nearly 6 million lives. Antimicrobial resistance may claim 10 million annually by 2050 — and that figure is starting to look low.
Therese Raphael – Bloomberg
If we look on the bright side of the past two years, Covid should at least mean we’ll be ready for the next major threat from infectious disease. We know how to prepare, we have more advanced technology, we’ve strengthened public-health protocols. And governments have learned just how quickly science can move when offered the right incentives.

Yes, Omicron Is Loosening Its Hold. But the Pandemic Has Not Ended; With spotty immunity in the population and a churn of new variants, the coronavirus is likely to become a persistent but hopefully manageable threat.
Apoorva Mandavilli – NY Times
After a frenetic few weeks when the Omicron variant of the coronavirus seemed to infect everyone, including the vaccinated and boosted, the United States is finally seeing encouraging signs. As cases decline in some parts of the country, many have begun to hope that this surge is the last big battle with the virus — that because of its unique characteristics, the Omicron variant will usher Americans out of the pandemic.

Omicron’s most crucial warning: A disease can move much faster than we can; Our approach to pandemic response can’t react fast enough for a Covid-19 variant like omicron. That should scare us.
Kelsey Piper – VOX
By some estimates, about 40 percent of the population of the United States will have been infected with the omicron variant of Covid-19 by the time the current wave fully subsides. The WHO estimates that half of Europe will have been infected as well. And nearly all of those infections will have occurred between mid-December and the beginning of February.

Exchanges, OTC and Clearing

Exclusive: CME crypto futures products a smash hit with investors
Lily Russell-Jones – City AM
Surging demand for crypto exposure amongst investors has created a bustling futures market according to the Chicago Mercantile Exchange (CME). Global investment banks Citi Group and Goldman Sachs are reportedly among institutions mulling offering clients exposure to crypto futures products traded on the CME amid strong demand. Retail investors are also getting in on the action at the world’s largest derivatives exchange. The CME revealed that trade volumes for micro ether futures have surpassed 500,000 contracts since they launched in early December 2021 with daily trade volumes topping 50,000 this week.

London Metal Exchange Gets New Member for Embattled Trading Pits
Mark Burton – Bloomberg
Sigma Broking has been given the green light to trade on the London Metal Exchange’s floor, in a bold bet that the historic open-outcry pit will survive a recent slump in volumes.

OCC Dallas Site Leader Mike Hansen Appointed to Dallas Regional Chamber’s Board of Directors
OCC is pleased to announce that Mike Hansen, Executive Director of Market Operations and Dallas Site Leader, was appointed to the Board of Directors of the Dallas Regional Chamber (DRC). He will serve a two-year term. For several years, Mike has worked closely with the DRC in their efforts to attract quality companies and talent to the Dallas-Fort Worth area, and he is excited to join the Board and gain greater opportunities to positively impact the Dallas community.

ICE Midland WTI American Gulf Coast Futures Begin Trading With Over Two Million Barrels Traded
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Midland WTI American Gulf Coast futures (Midland WTI AGC) began trading on January 24, with the equivalent of over 2.8 million barrels traded within the first three days.

Why An Omicron-Specific Vaccine Is Worth Testing; A jab targeting a specific variant may help against high rates of reinfection, but it needs to work better than existing vaccines.
Therese Raphael and Sam Fazeli – Bloomberg
The omicron variant may be infecting people who’ve already had Covid, as well as those who have been fully vaccinated, at a far higher rate than previously thought. But does that mean an omicron-specific vaccine is warranted? After all, the strain has been shown to be much milder and such a targeted vaccine might not work against some new post-omicron variant.

Buy-side firms can now achieve margin offsets on futures and swaps cleared at Eurex; Cross product margining services are already being offered to Société Générale and BNP Paribas’ clients.
Wesley Bray – The Trade
Margin offsets can now be achieved by buy-side firms between fixed income futures and interest rate swaps cleared at Eurex. Société Générale and BNP Paribas have already begun to provide the service to their clients.

Eurex EnLight: our roadmap for 2022
Andre Eue, Head of Market Development at Eurex, gives an overview of Eurex EnLight’s recently introduced new functionalities, including Staging of RFQs that allows for enhanced member access. He also talks about the more intuitive GUI and outlines the upcoming availability of Options Volatility Strategies (OVS) in single stock options. In addition, he explains the focus on increasing the distribution in the Dealer-to-Dealer and the Dealer-to-Client space in 2022.

Randolf Roth on Eurex’s crypto strategy
In a recent interview with Crypto Valley Journal Randolf Roth, Member of the Executive Board of Eurex, has a conversation on its strategy surrounding digital assets.

Buy-side firms now able to offset margins on futures and swaps cleared at Eurex
Societe Generale and BNP Paribas offering cross product margining services to their clients; First large hedge fund to take advantage of cross product margining; Average Daily Cleared Volume in long-dated interest rate swaps and overnight index swaps up 31 percent y-o-y to EUR 32 billion in 2021
Buy-side firms are now able to achieve margin offsets between fixed income futures and interest rate swaps cleared at Eurex. Societe Generale and BNP Paribas have begun providing the service to clients. Societe Generale announced the first multi-billion multi strategy hedge fund to take advantage.

Nasdaq, Inc. Announces $325 Million Accelerated Stock Repurchase Program
Nasdaq, Inc. (the “Company”) (Nasdaq: NDAQ) today announced that it has entered into an accelerated stock repurchase agreement (“ASR”) with Goldman Sachs & Co. LLC (“Goldman Sachs”), to repurchase $325 million of the Company’s common stock. The ASR was entered into pursuant to the Company’s share repurchase program, under which $784 million remained available as of January 25, 2022.

SGX welcomes Novo Tellus Alpha Acquisition to Mainboard
Singapore Exchange (SGX) is pleased to welcome the listing of Novo Tellus Alpha Acquisition (NTAA), as part of SGX’s first batch of Special Purpose Acquisition Company (SPAC) listings. NTAA will be listed on the SGX Mainboard under the stock code “NTU”.

Japan Exchange Group, Inc. and Consolidated Subsidiaries Consolidated financial results for the nine months ended December 31, 2021 (Based on IFRS), unaudited

EBS Market Integration Notice: New Content and Updates – CME
CME STP Notices: January 27, 2022
CME Globex Notices: January 24, 2022


There’s a $50 Trillion Industry Making a Huge Bet on Blockchain; The global supply chain may be in crisis now, but someday soon it could operate much faster—and more fairly.
Gloria Kurnik – Bloomberg
Blockchain may one day eliminate inefficiencies and lack of transparency in supply chains. While slow in coming, this revolution would benefit not only customers and brands, but the “invisible” workers who power global trade.

UBS Agrees to Buy Robo-Adviser Wealthfront for $1.4 Billion
Marion Halftermeyer and Annie Massa – Bloomberg
UBS Group AG agreed to buy U.S. robo-adviser Wealthfront for $1.4 billion in cash, as Chief Executive Officer Ralph Hamers tapped a fintech firm for his first major acquisition.

Apple to Rival Square by Turning iPhones Into Payment Terminals
Mark Gurman – Bloomberg
Apple Inc. is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, according to people with knowledge of the matter.

China Fintech PingPong Weighing $1 Billion Hong Kong IPO, Sources Say
Pei Li and Vinicy Chan – Bloomberg
Chinese fintech startup PingPong is considering an initial public offering in Hong Kong to raise as much as $1 billion, people with knowledge of the matter said. The Hangzhou-based payment company is working with advisers on a listing that could happen as soon as this year, the people said, asking not to be identified as the information isn’t public. The firm had previously considered a listing in mainland China, one of the people said.

Eventus names Jeff Bolke Chief Revenue Officer
Eventus Systems
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, announced today that Jeff Bolke has just joined the organization as Chief Revenue Officer (CRO). Bolke has more than three decades of experience, including executive and sales leadership roles at major cloud-based, Software-as-a-Service (SaaS) firms.
Based in Austin and reporting to Eventus CEO Travis Schwab, Bolke will drive the firm’s aggressive global expansion strategy and oversee the sales, marketing, business development and account management teams.


White House moves to boost cybersecurity at federal agencies
Brad Dress – TheHill
The White House announced on Wednesday new measures to boost cybersecurity within federal agencies following increased cyberattacks on private and public U.S. infrastructure.
According to a memo released by Shalanda Young, the acting director for the Office of Management and Budget (OMB), agencies will be transitioning to a “zero trust” approach that assumes no actor, system or network operating outside the security perimeter is to be trusted.

Best Cybersecurity Research Paper Revealed
Sarah Coble – Info Security Magazine
The National Security Agency has announced the winning entry to its ninth annual Best Cybersecurity Research Paper Competition.
The winning paper was written by Yanyi Liu from Cornell University and Rafael Pass, professor of Computer Science at Cornell Tech. It expounded a theorem that relates the existence of one-way functions (OWFs) to a measurement of the complexity of a string of text.

Implementing strong cybersecurity hygiene standards
James Wilde – Security Magazine
The complexities of securing an organization go far beyond one simple solution. While there is an abundance of security technologies and processes available to address many different facets of cyber security risks, an underlying focus on cyber hygiene can provide a strong foundation to help organizations protect themselves.
Cyber hygiene is about making sure you have the fundamental security controls operating and that they are consistently applied across your environment.

Banks Face Countdown to New Cybersecurity Rules
Brandon N. Robinson – Bloomberg Law
New federal rules taking effect this spring will require all U.S. banking organizations to report “any significant computer security incident” to federal regulators no later than 36 hours after the incident has occurred. Balch & Bingham LLP partner Brandon N. Robinson examines the new requirements and suggests steps for compliance.


FTX US Reports Full-Year 2021 Trading Results and Provides Operational Update
Average daily volume grew 608% in 2021; peak total volume of $812 million during a 24-hour period on 11/10/2021; Total spot crypto traded in 2021, the first full year of operation, eclipsed $67 billion; Increased user count 11,900% over the course of 2021 to a total of ~1.2 million
West Realm Shires Services Inc. (“FTX US” or “the Company”), owner and operator of FTX US, a leading U.S.-regulated cryptocurrency exchange, today announced its business update for the 2021 calendar year.

Digital Asset adds former CFTC chairman to board
Kristin Majcher – The Block
New York-based Digital Asset has added the former chair of the U.S. Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo, to its board of directors. In a Jan. 25 press release, the enterprise blockchain firm said Giancarlo will advise its leadership on strategic issues like asset tokenization and distributed ledger technology (DLT). Digital Asset has raised more than $300 million after completing a $120 million Series D round last April. Its core product is an open-source smart contract language called DAML.

Goldman Sachs alum’s new cryptocurrency platform offers social sentiment for investing
Steve Gelsi – MarketWatch
Entrepreneur and veteran of Goldman Sachs’ Marcus retail banking unit Adam Dell is launching Domain Money, a new cryptocurrency platform that will be using social sentiment to help investors. Dell, who is also the brother of Dell Technologies Inc. (DELL) founder Michael Dell, put together a team from Goldman Sachs Group Inc. (GS) for Domain Money.

Crypto Lending Firms Celsius Network, Gemini Face SEC Scrutiny
Joe Light, Matt Robinson and Zeke Faux – Bloomberg
The U.S. Securities and Exchange Commission is scrutinizing cryptocurrency firms Celsius Network, Voyager Digital Ltd. and Gemini Trust Co. as part of a broad inquiry into companies that pay interest on virtual token deposits, according to people familiar with the matter.

The Crypto Crash Strengthens the Case for Crypto; The plunge shows that prices can fall sharply and suddenly without inducing a more general contagion.
Tyler Cowen – Bloomberg
Crypto prices are tumbling. By one account, crypto assets have lost about $1.35 trillion globally since November, with some falling in price by 80% or more. Many investors feel a real pinch. The good news is that the global economy, or for that matter American society, is not poorer. And thus there need not be much of an economic response to adjust to these new prices. (The flipside is that if crypto prices see another steep increase, there won’t be much cause to celebrate.)

Celsius’s 18% Yields on Crypto Are Tempting—and Drawing Scrutiny; Alex Mashinsky’s company promises big rewards if you let it hold your crypto. Regulators are trying to make sure it’s playing by the rules.
Zeke Faux and Joe Light – Bloomberg
Every Friday, Alex Mashinsky sits in front of a video camera and livestreams for more than an hour with a sales pitch for his crypto company, Celsius Network LLC. Send money to Celsius, he says, and he’ll make you rich by paying you interest of as much as 18% a year.


Putin Backs Crypto Mining Despite Bank of Russia’s Hard Line
Evgenia Pismennaya – Bloomberg
Bank of Russia proposed total ban on crypto mining and trading; Russia is the third-biggest miner, after U.S. and Kazakhstan
President Vladimir Putin backs a Russian government proposal to tax and regulate mining of cryptocurrencies, rejecting the central bank’s proposal to ban it completely, according to three people familiar with the matter.

U.S., Britain and Other ‘Populist’ Nations Mishandled Pandemic, Study Says
Iain Rogers – Bloomberg
Excess mortality more than twice as high in those countries; Governments less likely to impose ‘unpopular’ contact curbs
The U.S., Britain, Brazil and other nations with “populist” governments mishandled the Covid-19 pandemic in 2020 and caused unnecessary deaths with relatively lenient policies, according to an academic research paper.

Why Swift’s Global Payments Are a Sanctions Pain Point
Nicholas Comfort and Natalia Drozdiak – Bloomberg
As the U.S., the U.K. and the European Union weigh what sanctions to impose against Russia should it invade Ukraine, one idea under discussion involves cutting off access to a messaging system called Swift. So central is Swift to the international financial system that any such talk rattles bankers and diplomats alike.


ISDA and IIF Respond to BCBS/CPMI/IOSCO Consultation on Margin Practices
ISDA and the Institute of International Finance (IIF) welcome the consultative report Review of Margining Practices. The Associations appreciate the large amount of data shared by BCBS, CPMI and IOSCO. The report paints a very accurate picture of the events of 2020 in relation to margin practices.

FMA publishes 2021 annual report
The Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko – has today published its annual report for the year to June 2021.
Throughout the year, the FMA continued to prepare for three new regulatory regimes, including the licensing and supervising of banks, insurers and non-bank deposit takers for conduct, climate-related financial disclosures that will become mandatory for some entities, and monitoring compliance with new requirements for insurers regarding policies and protections for customers¹.

Crypto Skeptic Set to Join Consumer Finance Watchdog
Allyson Versprille – Bloomberg
A vocal skeptic of cryptocurrencies is joining the Consumer Financial Protection Bureau, a sign the agency may be pushing to ratchet up scrutiny of digital tokens. Alexis Goldstein, financial policy director at the anti-monopoly organization Open Markets Institute, will work on a range of issues including digital assets, according to a CFPB spokesperson.

Founder of failed private equity firm Abraaj fined for misleading investors; Dubai regulator rules Arif Naqvi ‘personally orchestrated’ deception at firm that collapsed in 2018
Simeon Kerr – FT
Dubai’s financial regulator has provisionally fined Arif Naqvi, the founder of failed private equity firm Abraaj, $135.6m for misleading investors about the use of their funds.

US regulator favours tougher disclosure requirements for hedge funds in the wake of Archegos; Watchdog has backed new disclosure rules that require hedge funds to more quickly report significant losses that could harm investors or the broader financial markets.
Annabel Smith – The Trade
The Securities and Exchange Commission (SEC) has proposed amendments to hedge fund disclosure rules in a bid to safeguard the markets from the repetition of events such as the Archegos fallout The proposed amendments relate to the US regulator’s confidential reporting form for certain registered investment advisors for private funds and would see their disclosures sped up to just one business day if they suffer a systematic loss that could ultimately harm investors and the equilibrium of the wider markets.

SEC Proposes Amendments to Enhance Private Fund Reporting
The Securities and Exchange Commission today voted to propose amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds. The proposed amendments are designed to enhance the Financial Stability Oversight Council’s (FSOC) ability to assess systemic risk as well as to bolster the Commission’s regulatory oversight of private fund advisers and its investor protection efforts in light of the growth of the private fund industry.

SEC Proposes Amendments to Include Significant Treasury Markets Platforms Within Regulation ATS; Proposal Would Enhance Investor Protections and Cybersecurity for Alternative Trading Systems That Trade Treasuries and Other Government Securities
The Securities and Exchange Commission today proposed rules to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (ATS) that trade Treasuries and other government securities under the regulatory umbrella. The proposal builds upon a 2020 proposal and public comments received in response to that proposal. It would extend Regulation ATS to include systems that offer the use of non-firm trading interest and provide protocols to bring together buyers and sellers for trading any type of security. These Communication Protocol Systems would be required to either register as exchanges or register as broker-dealers and comply with Regulation ATS.

SEC Settles Case Against Gary Pryor and Two Arizona-Based Financial Technology Companies
The Securities and Exchange Commission announced today the entry of final judgments against two Arizona-based financial technology companies and their chief executive officer, Gary Pryor an Arizona resident, for defrauding investors of millions by making false and misleading statements about the revenue and business prospects of the two companies.

SEC Charges Tennessee Resident with Fraudulent Misuse of Investor Funds
The Securities and Exchange Commission today charged a Tennessee-based promoter with defrauding investors in a venture to organize and operate exchange-traded funds in violation of the antifraud provisions of the federal securities laws.

SEC Obtains Final Judgment Against Canadian Man Charged with Conducting Fraudulent Trading Scheme
On January 25, 2022, the Honorable Kevin McNulty of the U.S. District Court for the District of New Jersey entered a final consent judgment against a Canadian man whom the Securities and Exchange Commission charged with orchestrating a lucrative market manipulation scheme.

Statement on Government Securities Alternative Trading Systems
Chair Gary Gensler – SEC
Today, the Commission is considering amendments to include significant Treasury markets platforms within Regulation ATS. I support these amendments because, if adopted, they would help promote resiliency and greater access in the Treasury market. We’re also considering modernizing our rules related to the definition of an exchange. Over the decades since Congress put in place the definition of an exchange, there have been many changes to platforms — in particular, that they are increasingly electronified. I think it’s important that we revise the SEC’s rules to reflect those changes.

Dissenting Statement on the Proposal to Amend Regulation ATS
Commissioner Hester Peirce – SEC
Events in the U.S. Treasury market (as well as the related repo market) over the past several years strongly suggest that the market for government securities suffers from inadequate levels of intermediation, liquidity, and transparency that in times of stress can dramatically decrease its ability to function properly and significantly increase risks to market participants.[1] Commentators have suggested a number of possible reforms,[2] and, although I am skeptical of some of these suggestions, I agree that the Commission should be considering carefully how it might use its authority to make changes that could relieve some of these pressures and help ensure that the market continues to perform its vital functions in the U.S. and global economy.

Statement on Amendments to Exchange Act Rule 3b-16, Regulation ATS, and Regulation SCI
Commission Caroline A. Crenshaw – SEC
Thank you Chair Gensler, and thank you to my fellow Commissioners for their thoughtful remarks. I want to join my colleagues in thanking the staff of the Division of Trading and Markets, Division of Economic and Risk Analysis, and the Office of the General Counsel for the hard work that went into this release. I’d also like to thank Sai Rao in the Chair’s Office, and the other counsels, for all their assistance in getting the proposal to this open meeting.

Statement on Form PF
Chair Gary Gensler – SEC
Today, the Commission is considering amendments to Form PF — a form that came about after the financial crisis in 2008. We’d had challenges in private funds previously. So after the financial crisis in 2008, Congress came along and said, it’s time for us to collect information and share it with the newly formed Financial Stability Oversight Council.

Statement on Proposed Amendments to Form PF to Require Current Reporting and Amend Reporting Requirements for Large Private Equity Advisers and Large Liquidity Fund Advisers
Commissioner Hester Peirce – SEC
I want to begin by offering my thanks to the staff of the Divisions of Investment Management and Economic and Risk Analysis, and the Offices of the Chief Accountant and General Counsel. Although I am unable to support today’s proposal, I appreciate all of the work and effort staff put into the proposal, including fielding numerous comments and questions from me.

Statement on Proposed Amendments to Form PF
Commissioner Allison Lee – SEC
Today’s proposed amendments to Form PF contain key enhancements to investor protection for private fund investors as well as better tools for monitoring systemic risk. The private fund space continues to grow with the latest aggregated data from Form PF showing over 3300 reporting fund advisers, overseeing or managing over 37,000 funds, with an aggregate net asset value of $11.7 trillion that is more than double the amount from just seven years ago.[1]

Statement on Amendments to Form PF to Require Current Reporting and Amend Reporting Requirements for Large Private Equity Advisers and Large Liquidity Fund Advisers
Commission Caroline A. Crenshaw – SEC
Last year, I gave a speech about assessing the unknown.[1] My thesis was that we should proactively try to anticipate the risks that may arise and proliferate in our financial markets. If we continuously evaluate the threats that our markets and investors may face, it should help us promote market resilience and appropriate investor protections, even when destabilizing events inevitably occur.

ESAs welcome ESRB Recommendation on a pan-European systemic cyber incident coordination framework
The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published today a statement welcoming the European Systemic Risk Board’s (ESRB) Recommendation on systemic cyber risk, which calls on the ESAs to prepare for the gradual development of a Pan-European systemic cyber incident coordination framework (EU-SCICF).

ESMA consults on the review of MiFID II suitability guidelines
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is consulting on certain aspects of suitability requirements under the Markets in Financial Instruments Directive (MiFID II), in order to update its guidelines following amendments to MiFID II relating to sustainability.

Can the FCA tackle greenwashing?
Nick Britton – FT Advisor
For those who care about environmental, social and governance considerations, watching the glacial progress towards standardised ESG disclosures has been frustrating.

Investing and Trading

Norway Wealth Fund CEO Warns Days of High Returns Are Over
Lars Erik Taraldsen and Ott Ummelas – Bloomberg
World’s top wealth fund returned 14.5% on tech, financials; CEO says return prospects limited by low rates, high stocks
Norway’s $1.3 trillion sovereign wealth fund, the world’s biggest, is reaching the pinnacle of the returns that can be expected, according to Chief Executive Officer Nicolai Tangen.

U.K. Retail Trading Platforms See Renewed Demand in Wild Markets
Joe Easton – Bloomberg
CMC Markets and IG Group both say they’ve seen volumes rise; Tesla, Netflix and Microsoft among top trades in AJ Bell data
A volatile start to the year for global stock markets is breathing new life into U.K. trading platforms, which had seen fading interest amid less stringent pandemic restrictions. CMC Markets Plc and IG Group Holdings Plc both said they’ve seen an increasing number of bets being placed on equity markets amid price swings that put the S&P 500 Index on course for its worst month since March 2020. Headlines on tightening U.S. monetary policy as well as geopolitical tensions in eastern Europe have been a “call to trade,” according to CMC’s deputy Chief Executive Officer David Fineberg.

Environmental, Social and Corporate Governance

Nestle to Pay Cocoa Farmers Cash Incentives to Fight Child Labor
Corinne Gretler – Bloomberg
Company says it aims to address root causes of child labor; KitKat maker plans to invest $1.4 billion by 2030 for program
Nestle SA will offer cocoa farmers and their families in the Ivory Coast cash incentives that aim to reduce child labor, as the chocolate industry faces growing scrutiny over the problem.

Energy Transition Drew Record $755 Billion of Investment in 2021
Will Mathis – Bloomberg
Spending surged 27%, driven by electric transport, BNEF says; Low-carbon energy needs rapid scale-up to reach climate goals
Global spending on the transition to low-carbon energy rose by more than a quarter in 2021, driven by the electric vehicle and renewable power sectors.

EU Lawmaker Seeks Changes to Carbon Market Reserve Proposal
Ewa Krukowska – Bloomberg
EPP’s Jarubas wants to tie reserve reform with EU ETS overhaul; Bloc is debating measures to bolster CO2 market in green shift
A lawmaker from the European Union’s biggest political group is proposing that the bloc abandon fast-tracking a measure to stabilize its carbon market, and instead link it to a broader overhaul of the emissions trading program.

Profits at Deutsche Bank’s investment bank almost halve in fourth quarter; Falling trading revenue and rising costs hit division that generated two-fifths of full-year group revenue
Olaf Storbeck – FT
Pre-tax profits at Deutsche Bank’s investment banking business almost halved at the end of last year as the division was hit by falling trading revenue, soaring costs and higher provisions for bad loans.


BofA Increases Base Pay to Keep Top-Tier Bankers
Katherine Doherty and Sridhar Natarajan – Bloomberg
Managing directors see base pay rise to $500,000 from $400,000; Bank’s directors and associates also see base salaries rise
Bank of America Corp. is boosting pay for senior bankers in an effort to retain top talent. The company increased base salaries for its managing directors in investment banking and markets to $500,000 from $400,000, according to people with knowledge of the matter. Directors are getting a bump to as much as $350,000 this year from $250,000, the people said, asking not to be identified discussing plans that aren’t public. Beyond their salaries, finance-industry employees in such positions receive a significant portion of their compensation in bonuses.

UBS targets US millennials with Wealthfront acquisition; First significant move in chief executive Ralph Hamers’ plans to expand in America
Owen Walker – FT
UBS has agreed to buy US robo-adviser Wealthfront in an all-cash transaction valued at $1.4bn, as the Swiss bank expands further into the US wealth market. The deal is the first significant move in chief executive Ralph Hamers’ plans to expand in the US mass affluent market. California-based Wealthfront, which is popular among millennials and Generation Z customers, has 470,000 clients and $27bn of assets.

Deutsche Bank Boosts Guidance After Traders Hold Market Share
Steven Arons – Bloomberg
All units lift revenue to cap most profitable year in a decade; CEO Sewing is set to unveil his next strategic plan in March
Deutsche Bank AG raised its revenue outlook and said a key financial target is within reach, giving a further boost to Chief Executive Officer Christian Sewing after the lender’s most profitable year in a decade.

BlackRock’s active strategies threaten to steal the show; Passive funds still dominate but efforts to revive its actively managed funds are beginning to pay off
Robin Wigglesworth – FT
BlackRock’s stockpickers are accustomed to toiling in the shadow of the group’s exchange-traded fund business, which last year sucked in more than $1bn a day on average from investors.

When Cathie Wood Loses, He Wins, and It Started With a Tweet
Alex Wittenberg and Emily Graffeo – Bloomberg
The stray tweet stood out: Why not start a fund to bet against Cathie Wood, the star investor who’s been stumbling so hard? “Holy crap, that’s a great idea,” Matthew Tuttle thought when it crossed his feed last year. His fund that wagers against companies that previously merged with SPACs — another investment craze of the moment — had been performing well amid signs that the pandemic economy was losing steam. So Tuttle, 53, figured the time was ripe for a bet against Wood.


China Approves AMD’s $35 Billion Acquisition of Xilinx
Bloomberg News
Chinese regulators have granted approval for Advanced Micro Devices Inc. to buy Xilinx Inc., clearing the way for one of the largest deals to emerge from the global semiconductor industry.

Number of Hong Kongers Moving to Taiwan Hits a Record
Cindy Wang – Bloomberg
Frustrations rise over coronavirus rules, political crackdown; Exodus began during pro-democracy demonstrations in 2019
The number of Hong Kong residents moving to Taiwan climbed to a record high, a sign of frustrations over a political crackdown and strict rules to curb the coronavirus. Some 11,173 Hong Kongers received permits last year to live in Taiwan, up 3.3% from a year earlier, according to new data from the National Immigration Agency in Taipei. That’s the highest figure in official data dating to 1991.

Hong Kong-Based NFT Platform Attracts Backing From High-Profile Art and Tech Investors
Abby Schultz – Barron’s
A nonfungible token platform that curates works from renowned traditional and digital artists is receiving an infusion of funding from leading members of both the art and tech worlds. TRLab, which was co-founded by Xin Li-Cohen, Christie’s non-executive deputy chairman, in May 2021 in Hong Kong, is receiving US$4.2 million from several investors, including a number of venture capital funds such as Animoca Brands, owner of blockchain-based game Sandbox.

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