FTX Hammers More Nails Into Crypto’s Coffin

Nov 18, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Longtime CME Group executive David Lerman passed away a week ago. All the services were private. Lerman served as senior director, asset managers client segment, at the time of his death. He had been an independent bond options trader at the Chicago Board of Trade and worked as a U.S. Treasury Bond trader for Fossett Trading.

CME Group Chief Commercial Officer Julie Winkler had this to say about Dave: “We have some heavy hearts at CME and we miss Dave terribly. He gave 31 wonderful years to this company and even while he was out sick, he was pitching to the team new ways to promote futures that he wanted them to incorporate into the education curriculum.”

His family wrote a lovely and very long tribute to him on a funeral home website page.

The demise of crypto is upon us. That is the subject of several stories, including one from economist Paul Krugman in The New York Times titled “Is This the End Game for Crypto?” I know this tune. It is the tune that was sung for the demise of open outcry, sung over decades. And yet, open outcry still exists, though a shadow of its former self. But this is a familiar tune and I know it well.

When JLN started its project for the FIA for the 50th anniversary of financial futures, I kept trying to slip in that financial futures really started in 1970 with the launch of foreign currency futures at the International Commercial Exchange. This first ICE was the renamed New York Produce Exchange, which was negatively impacted by the Great Salad Oil Scandal of the 1960s, when Anthony (“Tino”) De Angelis defrauded the cash and futures vegetable oil markets in New York and Chicago. The International Commercial Exchange was the brainchild of Murray Borowitz, a former trucking executive who approached the NYPE about the idea of foreign currency futures. Borowitz also applied to the SEC when he was made chairman of the International Commercial Exchange to trade stock index futures, but was turned down.

In The History of Financial Futures video series that John Lothian Productions is producing, that is where we start, in 1970 with Murray Borowitz and the International Commercial Exchange. Part of the reason is that although the contracts were not successful, they spurred others to try again. And as Doc Sandor noted in his video, the regulatory environment was much more accommodating after the CME/IMM and CBOT launched their financial futures products and the CFTC was created.

Ultimately, Ginnie Mae futures did not last, but they begat the 30-year Treasury bond futures and the 10-year Treasury note futures and more at the Chicago Board of Trade. The success rate of new contracts was never very high, but the spirit of innovation that started in 1970 sparked a whole revolution in new futures products.

I give all the credit in the world to Leo Melamed and Richard Sandor for stewarding successful futures contracts, but I also tip my hat to the mostly forgotten Murray Borowitz and the International Commercial Exchange. We celebrated the anniversary of the success of financial futures, starting in 1972, 50 years of incredible world-changing success.

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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Chuck Mackie once again provided his take on FIA Expo with his News From The Futures: FIA Expo 2022 Day One and Day Two. His Day One report covers Walt Lukken’s speech and his discussions with CFTC Chairman Rostin Behnam and ICE’s Jeffrey Sprecher, the Regulatory Battlegrounds panel, the “Crypto Spring or Crypto Winter?” panel and more. Day Two covers more Walt Lukken interviews, the “Commodities Markets – The Impacts of Geopolitics” panel, and the winner of the Innovators Pavilion award, which he of course predicted correctly.~SR

The United Nations Environment – Finance Initiative (UNEP FI) is holding a webinar, “Physically fit? How financial institutions can better disclose climate-related physical risks in line with the TCFD recs” on December 5 at 15:00 CET – 3:00 p.m. (CET) or 8:00 a.m. (CST). Speakers include Paul Smith, Senior Climate Consultant, UNEP FI; Lihuan Zhou, Associate, Sustainable Investing Initiative, World Resources Institute; Bouke de Vries, Advisor to the Board on Public Affairs, Rabobank and Chair of Working Group Sustainable Finance, European Association of Cooperative Banks; and David Goldsworthy, Senior Group Risk Manager, Credit and Climate Risk, Standard Bank. Sign up for the webinar here.~SAED

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Sponsored Content
Asia’s most dynamic derivatives exchange is now open on most Japanese National Holidays!
This year’s Fall Equinox, 23rd of September, was a historical day as it marked the start of holiday trading at Osaka Exchange (OSE) and Tokyo Commodity Exchange (TOCOM). Coming out of a global pandemic and facing a shift in consumer behavior, and facing uncertainty both geo-politically and macro-economically, the move underscores Japan Exchange Group’s ambition to be the market of choice for capital flows. The market honored this move with a very active trading participation from day one, as 592,723 lots traded. Since then, we have had two more holiday trading days and on both days roughly 500 thousand lots traded on both OSE and TOCOM.

As the first official trading days were an overall success and 70% of regular trading days ADV contributors were trading. Market participants both domestic and internationally applauded the move to offer additional trading opportunities.

In an increasingly interlaced and interdependent world, many Japanese domestic investors took advantage to hedge and transfer risk on OSE and TOCOM. 288 hours of additional trading opportunities and the successful start has led some of the remaining participants, that took a more cautious approach, to revisit their position and to start considering making the holiday market available to their clients.

24/7 trading and the increase of retail participation during the pandemic has had a positive effect on rejuvenating the average Japanese retail investor. The average retail investors opening new accounts were traditionally in their 40s and 50s. During the pandemic, the average was about 10 years younger, and we experienced a massive influx of new participants. This boost by younger, more agile but also still less affluent retail participants, calls for more flexible and more granular products.

OSE has therefore designed new micro futures as well as mini options contracts that will become the bridge for these new additional players to participate.

Improved financial literacy among retail, is also reflected by an increase in retail options participation, in order to further support our domestic and international retail brokers, we have designed Nikkei 225 mini options to maximize the pool of eligible retail investors to enter these products. Both products will go-live in May 2023.

Inflation and macro-economic paradigm-shifts also call for more efficient and elaborate fixed income hedging tools. OSE has grasped the opportunity to list STIRS futures from May 2023. As CCP as well as being the market for JGB futures, this move will provide unprecedented margin efficiency and market access to the Japanese and global fixed income space.

Author: Matthias Rietig, Senior Officer of OSE

Contact: Osaka Exchange / Tokyo Commodity Exchange Derivatives Business Development

E-mail: ose-dmg@jpx.co.jp

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MWE SHORT: Anna Irrera – The Birth of Fintech
JohnLothianNews.com

In this video from MarketsWiki Education’s World of Opportunity event in New York, Anna Irrera, a fintech correspondent for Reuters, breaks down how fintech is revolutionizing the financial industry. While fintech is a broad term, Irrera talks about four main areas: payments, online lending, digital wealth management and blockchain projects.

Watch the video »

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CFTC Has ‘Boots on the Ground’ at FTX Subsidiary LedgerX
Lavender Au – CoinDesk
Kristin N. Johnson, a commissioner at the Commodity Futures Trading Commission, said Thursday that the regulator has “boots on the ground” at LedgerX, a U.S.-based subsidiary of FTX, the multibillion-dollar cryptocurrency exchange that collapsed last week. The regulator, Johnson said, was “monitoring and overseeing on a daily, if not hourly basis, verifying what we believe to be the case, which is [that] every dollar of customer assets held at LedgerX continues to be available.”
/jlne.ws/3tE37ls

****** Who wants to go to the Bahamas? OK, let’s do this by a lottery.~JJL

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How FTX’s Sister Firm Brought the Crypto Exchange Down; Alameda Research was Sam Bankman-Fried’s first company. He built FTX partly to help Alameda’s trading business. Then things got out of control.
Matthew Goldstein, Alexandra Stevenson, Maureen Farrell and David Yaffe-Bellany – The New York Times
In late 2017, Sam Bankman-Fried, then 25 years old, co-founded Alameda Research, a small trading firm that marked the beginning of his cryptocurrency empire. Now the relationship between Alameda and his cryptocurrency exchange, FTX – and how the two propped each other up – is coming under scrutiny as prosecutors and regulators investigate the collapse of one of the best-known trading platforms in the crypto universe.
/jlne.ws/3Xc0Ew5

***** Sure, blame it on the sister. It is her fault!~JJL

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Twitter closes offices until Monday as employees quit in droves
CBC News
Hundreds of Twitter employees are estimated to be leaving the beleaguered social media company following an ultimatum from new owner Elon Musk that staffers sign up for “long hours at high intensity,” – or leave. Early Wednesday, Musk had emailed Twitter employees, saying: “Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore.”
/jlne.ws/3V3bS4g

****** The employees are not flocking to the office, they are scattering to the four winds. But flocks of birds sometimes reassemble. Could we see a new enterprise scoop them up into a new coop?~JJL

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Potentially ‘historic’ lake-effect snowstorm underway in western New York could bury Buffalo
Doyle Rice and Victoria E. Freile – USA TODAY
The snow has started. AccuWeather forecasters say a blockbuster lake-effect snowstorm will bury some locations in western New York with feet of snow, grind travel to a halt and possibly stamp new marks in the weather history books. “Bands of heavy lake-effect snow began to pour off Lake Erie and Lake Ontario late Wednesday night, and meteorologists say that snow is only one phase of what is shaping up to be a historic and multi-day snowfall event,” said AccuWeather meteorologist Renee Duff.
/jlne.ws/3GvORTs

****** The snow is so bad, the Buffalo Bills football team’s game was moved to Detroit.~JJL

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Thursday’s Top Three
Our top story Thursday was Fallen Crypto Billionaire Admits His Persona Was a Sham in New Interview, from The Daily Beast via Yahoo! News. Second was He Thought His Home Might Sell for $30 Million. Fifteen Months Later, It’s ‘The Steal of the Century.’ from The Wall Street Journal. Third was FTX Was an Empty Black Box All Along, from Bloomberg.

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MarketsWiki Stats
27,084 pages; 241,765 edits
MarketsWiki Statistics

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Lead Stories

FTX Hammers More Nails Into Crypto’s Coffin; Even the true believer HODLers and DeFi exchanges must see that the crypto walls are closing in.
Lionel Laurent – Bloomberg
The disillusionment that follows bouts of crypto euphoria is known as crypto winter. And this one feels like the coldest yet. Every day seems to bring new revelations of bankrupt exchange FTX’s internal dumpster fire and its tentacular reach into all corners of the cryptocurrency ecosystem, making it look like a blend of Enron and the 2008 financial crash. FTX was mercifully less systemic than either, and no taxpayer bailouts are on the way. But the bigger fallout is only just beginning. Crypto exchanges have failed before, but this time is different.
/jlne.ws/3hY2ale

Crypto Whistleblowers in Line for Multimillion-Dollar Payouts; Commission’s Kristin Johnson encourages them to come forward; She says possible payouts for whistleblowers are ‘very big’
William Shaw and Eva Szalay – Bloomberg
A CFTC commissioner has urged crypto industry whistleblowers to come forward in the aftermath of FTX Group’s implosion, saying tipsters have previously received millions of dollars for their help. Commodity Futures Trading Commission’s Kristin Johnson said on Thursday that informants would get anonymity, adding that such tips play a crucial role in enforcement given the opaqueness of some of the crypto world.
/jlne.ws/3XbVDnf

US watchdogs play blame game over FTX demise; Regulators and lawmakers scrap over which agency should have had oversight of fallen $32bn crypto empire
Stefania Palma and Colby Smith and Nicholas Megaw – Financial Times
An awkward pause followed one lawmaker’s questions at a hearing this week when they quizzed regulators about which agency was responsible for monitoring the failed cryptocurrency exchange FTX. “Can you tell me who in our federal financial services regulatory administrative state was watching FTX to make sure no one there stole people’s money?” John Kennedy, a Republican senator from Louisiana, asked banking regulators during a Senate hearing. “Was anyone watching this?”
/jlne.ws/3hWAY6N

Crypto-Product Pipeline Goes Bust as Survival Questioned; ETF Store’s Geraci sees ‘wave of crypto-related liquidations’; Just 14 products debuted in third quarter, only one in October
Vildana Hajric and Katherine Greifeld – Bloomberg
Even before the collapse of the FTX exchange brought the crypto industry to heel, the boom in virtual-currency exchange-traded products was deflating. Launches worldwide for ETPs focused on digital assets have dwindled to a trickle, from 58 in the first half of the year to 14 in the third quarter, with just one debut in October, according to data compiled by Bloomberg. None have come to market so far in November, a month that’s seen the implosion of a number of once-supreme crypto firms.
/jlne.ws/3tESS07

New FTX chief says crypto group’s lack of control worse than Enron; John Ray criticises ‘absence of trustworthy financial information’ at sprawling digital assets group
Kadhim Shubber and Joshua Oliver in London and Sujeet Indap – Financial Times
The new chief executive of FTX, an insolvency professional who oversaw the liquidation of Enron, has said that the bankruptcy of the crypto group is the worst case of corporate failure he has seen in more than 40 years. John Ray III, who was appointed to run the FTX bankruptcy, said in a US court filing that he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information”.
/jlne.ws/3EJLW8q

COP27 communications group lambasted over work for fossil-fuel industry; Hill+Knowlton Strategies draws ire from scientists for ‘incompatible’ representations
Camilla Hodgson – Financial Times
The global PR company handling external communications for COP27 in Egypt is under fire from a group of scientists for its work for the fossil-fuel industry, amid concerns about the rise of oil and gas lobbyists at the UN climate summit.
/jlne.ws/3gf3yjd

Exonerated trader sues Deutsche Bank over Libor rigging allegations; Scandal forced some of the world’s largest financial institutions to pay billions in fines
Joe Miller and William Langley – Financial Times
A former Deutsche Bank trader whose conviction over the alleged rigging of the Libor interbank lending rate was overturned by a US appeals court has sued the German lender for $150mn, accusing it of deliberately framing him for the crimes of others.
/jlne.ws/3gopTL0

World’s largest crypto fund swept into FTX storm; Shares in $10.5bn Grayscale Bitcoin Trust traded at 40% discount to the value of its holdings
Steve Johnson – Financial Times
The world’s largest cryptocurrency fund has become embroiled in the turmoil swirling around the troubled sector, in a further sign of waning enthusiasm for digital assets. The share price of the $10.5bn Grayscale Bitcoin Trust (GBTC), which owns 3.5 per cent of the world’s bitcoin, has plummeted to a 39 per cent discount to the value of its underlying assets as investors have embarked on an increasingly desperate scramble to exit.
/jlne.ws/3tGq87j

Coinbase’s Brian Armstrong: ‘I’m just as bullish on crypto as ever’; The founder-CEO on his enduring belief in blockchain, his ‘no politics in the workplace’ policy, and why the solution to crypto chaos is . . . more crypto
Hannah Murphy – Financial Times
Ahead of my lunch with crypto exchange chief Brian Armstrong, his team tell me they had tried to find a decent restaurant in San Francisco that accepted crypto as a payment. But alas, no luck.
/jlne.ws/3EbKY3m

How a Series of Crypto Meltdowns Is Reshaping the Industry
Olga Kharif – Bloomberg
The history of cryptocurrencies has rarely been dull, but the slump of 2022 has been a wilder ride than most. Billions of dollars in holdings have been disappearing almost overnight in a series of business collapses, most notably the evaporation of the FTX crypto exchange in November. Each left in its wake a wave of related bankruptcies. The events have eroded trust in a field that was itself created in response to a loss of faith in mainstream finance following the 2008 banking crash. Some investors have responded to the crisis by calling for tough new regulation. Others blame the bankruptcies on the failures of crypto middlemen and say the turmoil should hasten a switch to more decentralized platforms.
/jlne.ws/3XcoMPe

They put their trust in FTX. Now their money is frozen – and maybe wiped out.
Daniel Arkin – NBC News
In the first year of the pandemic, Manny Bautista started investing in cryptocurrencies – first on the exchange platform Coinbase and later on FTX, the brainchild of wunderkind entrepreneur Sam Bankman-Fried. Two years later, Bautista and hundreds of thousands of other FTX customers are in limbo, shocked and unsure what happens next. FTX has paused customer withdrawals, and there’s growing doubt that customers will be able to recover any of their assets. Bautista isn’t optimistic. He has lost access to crypto assets valued at roughly $35,000, according to a screenshot he took in the days before FTX tanked and shared with NBC News.
/jlne.ws/3TLgcE3

Stick or twist? CME retains FCM application; Even though FTX has withdrawn its application, the exchange still plans to take on FCM business
Luke Clancy – Risk.net
CME is ploughing on with its application to become a US futures commission merchant (FCM), despite the demise of cryptocurrency exchange FTX and the pulling of its own similar application. FTX’s proposal would have allowed it to effectively bypass FCMs and give retail traders direct access to crypto derivatives trading, also opening the possibility it could extend its offering to traditional assets.
/jlne.ws/3TOjnef

FINRA Targets Crypto Communications After FTX Collapse
Camomile Shumba – CoinDesk
The Financial Industry Regulatory Authority (FINRA), a U.S. self-regulatory body for brokerage services, is targeting crypto marketing practices in the wake of the collapse of industry juggernaut FTX. The assessment will require firms to provide all retail communication concerning crypto assets distributed between July 1 and Sept. 30 this year, according to an announcement made by FINRA on Monday.
/jlne.ws/3gnKmj7

Understanding the Collapse of Sam Bankman-Fried’s Crypto Empire; Understanding FTX and Alameda
Tracy Alloway and Joe Weisenthal – Bloomberg
The collapse of the Sam Bankman-Fried empire is gigantic, sprawling and fast moving. While details are still coming out, it already ranks among the most prominent corporate disasters of all time and has left the entire crypto community reeling. To better understand the role that FTX played in the industry and how the exchange started to unravel, we speak with two guests on this episode. First, we have Evgeny Gaevoy, the founder and CEO of the crypto market-making firm Wintermute, to explain how he used the FTX platform and how he understood its relationship with SBF’s trading firm, Alameda Research.
/jlne.ws/3EH3TEt

Musk’s ‘Hardcore’ Ultimatum Sparks Exodus, Leaving Twitter at Risk; Musk aims to retain workers, softening work from home policy; Offices to be shut immediately, reopening Monday, memo says
Kurt Wagner and Davey Alba – Bloomberg
Elon Musk gave Twitter Inc. employees an ultimatum to either commit to the company’s new “hardcore” work environment or leave. Many more workers declined to sign on than he expected, potentially putting Twitter’s operations at risk, according to people familiar with the matter. So many employees decided to take severance that it created a cloud of confusion over which people should still have access to company property. Twitter closed its offices until Monday, according to a memo viewed by Bloomberg.
/jlne.ws/3AqIqgx

COP27 Gets Chaotic With Mysterious Draft Text, Elusive President; Delegates in Sharm El-Sheikh vent their frustration at the slow advance of UN-sponsored negotiations in Egypt.
John Ainger, Jennifer A Dlouhy, Salma El Wardany, and Laura Millan Lombrana – Bloomberg
Diplomats from rich and poor countries, observers from nonprofits and activists meeting in Egypt for the UN-sponsored climate talks are finding themselves in the unusual position of agreeing on something: This is chaos. There is collective exasperation among attendees at the COP27 summit over the status of talks essential to advance humanity’s fight against climate change as the summit nears the end.
/jlne.ws/3AqjmGD

The Elon Musk of Climate Plans Gets a Test Drive; A $20 billion program to wean Indonesia off coal is a potential game changer for much bigger prizes, India and China. It must succeed or die trying.
David Fickling – Bloomberg
Future generations may well remember Elon Musk for his self-destructive $44 billion Twitter Inc. takeover, his vile attack on a cave diver trying to rescue a junior soccer team, or his bizarre and troubling interventions in the Ukraine conflict. There’s one solid feat that will be hard to take away from him, however. By building Tesla Inc. at a time few thought electric cars were remotely viable, he was a catalyst who transformed the global automotive industry as drastically as Henry Ford or Eiji Toyoda.
/jlne.ws/3OfnSgX

New FTX CEO Distances Company From SBF After Controversial DMs Surface
Jason Nelson – Decrypt
Following days of cryptic and controversial tweets from former CEO Sam Bankman-Fried (SBF), plus today’s revelation of shocking direct messages to a reporter, FTX’s newly-installed CEO took to Twitter to distance the firm from its founder and one-time poster child. New CEO John J. Ray III used FTX’s official Twitter account to re-emphasize the change in leadership at the embattled exchange. Ray apparently doesn’t support Bankman-Fried’s newfound sense of transparency, as the former leader continues tweeting out apologies and other musings that grab headlines and rile up Crypto Twitter.
/jlne.ws/3UPFMcC

Kraken’s incoming CEO labels FTX and SBF as ‘thieves,’ says acquisition rumors unfounded
Taylor Locke – Fortune
David Ripley, incoming CEO at cryptocurrency exchange Kraken, didn’t mince words when speaking about Sam Bankman-Fried (SBF). “I think, what it boils down to from all the information we have [and] this bankruptcy report that has now been released is that FTX and SBF are complete frauds-not just frauds, but thieves,” Ripley, who also served as COO at Kraken for over six years, tells Fortune.
/jlne.ws/3U3jWkN

Bankman-Fried Received $1Bn in Personal Loan from His Company; The founder of the FTX cryptocurrency exchange borrowed money from one of his bankrupt companies.
Luc Olinga – The Street
Sam Bankman-Fried, the founder of the FTX exchange and Alameda Research, a cryptocurrency trading platform, seemed to confuse his bank and his companies. According to John Ray, the new CEO in charge of the restructuring of his empire which went bankrupt on November 11, Bankman-Fried received a personal loan of $1 billion from Alameda.
/jlne.ws/3hVPewx

Where Did FTX Put the Money? It was not exactly meticulous with its record-keeping.
Mark Gongloff – Bloomberg
In Frank Capra’s classic study of finance, It’s a Wonderful Life, Uncle Billy’s shoddy bookkeeping causes him to lose $8,000 ($122,000 in 2022 money), setting Old Man Potter up to take over Bailey Building & Loan and send George Bailey to prison. But Uncle Billy’s “strings on fingers” approach to organization made him Ebenezer Scrooge compared to the crypto bros at FTX.
/jlne.ws/3hJ5Uae

FTX Users Can’t Count on Help From the IRS; Losing access to crypto because the exchange shuts down is different from taking a loss, which means a deduction is highly unlikely.
Alexis Leondis – Bloomberg
When market investors suffer losses – or get taken for a ride – they’re often eligible for a tax write-off to soften the blow. Users of the bankrupt crypto exchange FTX won’t be so lucky. Here’s the difference: Let’s say you’re a crypto investor on an exchange that’s still standing. If you’ve suffered investment losses amid the market decline, you can simply sell to offset other gains and potentially take a deduction. That’s because the Internal Revenue Service allows investors to sell poor-performing crypto, just as with stocks, and use those losses to cancel out capital gains from selling better-performing assets.
/jlne.ws/3tCHS3D

Hundreds Of Workers Seem To Leave Twitter As Elon Musk’s ‘Hardcore’ Deadline Passes; The billionaire reportedly met with “critical” employees before the Thursday ultimatum, but many staffers left anyway.
Nick Visser – HuffPost
Hundreds of Twitter employees appeared to flee on Thursday after Elon Musk demanded that only “extremely hardcore” staffers remain as he seeks to transform the social media giant to fit his own vision. Musk sent a memo to staffers Wednesday morning saying Twitter would only have room for those prepared to work “long hours at high intensity,” echoing expectations at his other companies, Tesla and SpaceX. “Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore,” he wrote. “Only exceptional performance will constitute a passing grade.”
/jlne.ws/3EJbMcG

Twitter Workers Say Farewell After Musk Ultimatum
Alexa Corse and Sarah E. Needleman – The Wall Street Journal
Twitter Inc. suffered a new wave of departures Thursday to its already depleted workforce after many employees rejected Elon Musk’s demand that they commit to working “long hours at high intensity” in order to stay. Many staffers spent the past day weighing their options, after waking up Wednesday to an overnight email in which Mr. Musk told them to fill out a form by Thursday, 5 p.m. ET, to indicate if they want to remain at the company and are willing to be “extremely hardcore.” Employees who don’t opt in will be given three months of severance, Mr. Musk said.
/jlne.ws/3hVBguj

Binance boss pledges to release audit, throws ‘psychopath’ jab
AFP
The head of Binance, the world’s top cryptocurrency exchange, pledged Thursday to release an audit into the firm and rejected claims he sparked the recent collapse of rival platform FTX. Changpeng Zhao said an independent audit into Binance would be released “in a couple of weeks” and urged a full investigation into FTX’s demise, before delivering a scathing critique of its founder Sam Bankman-Fried, questioning his mental stability.
/jlne.ws/3V4MTxq

A Nation in the Crosshairs of Climate Change Is Ready to Get Rich on Oil; As rising seas imperil Guyana, leaders sign sweetheart deals with Exxon to help fund the transition to a sustainable future.
Monte Reel – Bloomberg
Go to the seawall in Georgetown late on a Sunday afternoon, and you’ll find Guyana with its guard down. Everyone’s “liming”-a term that washed onto this South American shore decades ago from Trinidad that means hanging out, talking about nothing. To lime isn’t to deny the existence of challenges or threats, it’s to temporarily deny them the power to darken your state of mind.
/jlne.ws/3V9v00A

FTX Disclosed Related-Party Transactions but Didn’t Name Names; Lack of detail in financial statements echoes past scandals including Enron
Jonathan Weil – The Wall Street Journal
The saga of Sam Bankman-Fried’s bankrupt crypto empire isn’t just about collapsing tokens, missing billions and sunny offshore tax havens. There were also red flags in its books. At the core of FTX Trading Ltd.’s financial statements was a series of related-party transactions. But the company didn’t say who those parties were.
/jlne.ws/3UPuox8

Ukraine Invasion

US is running low on some weapons and ammunition to transfer to Ukraine
Jim Sciutto, Jeremy Herb, Katie Bo Lillis and Oren Liebermann – CNN
As the first full winter of Russia’s war with Ukraine sets in, the US is running low on some high-end weapons systems and ammunition available to transfer to Kyiv, three US officials with direct knowledge tell CNN. The strain on weapons stockpiles – and the ability of the US industrial base to keep up with demand – is one of the key challenges facing the Biden administration as the US continues to send billions of dollars of weapons to Ukraine to support its fight against Russia.
/jlne.ws/3OgU0k5

Ukraine energy supply under persistent Russian attacks, heavy fighting in east
Max Hunder – Reuters
Russian missiles and shells hit Ukrainian positions in several regions and there was no let up in heavy fighting in Donetsk in the east, the Ukrainian military said on Thursday night as Moscow’s occupying forces appeared more active. Ukraine’s energy infrastructure was under persistent attack by Russian missiles and drones from the capital Kyiv in the north to Dnipro in central Ukraine and Odesa in the south, the military said in a statement.
/jlne.ws/3El1Jcw

Russia pummels Ukraine with missiles and drones, injuring civilians
David L. Stern and Robyn Dixon – The Washington Post
Smarting from military failures and its evident isolation in a week of key global meetings, Russia on Thursday unleashed its second major missile barrage against Ukraine in three days, accusing Kyiv of refusing peace talks and warning of further attacks on critical infrastructure. Thursday’s attacks injured scores of civilians and damaged infrastructure in the country’s south and east, including gas facilities, Ukrainian officials said, as Russia sought to degrade Ukraine’s economy and sap its will to fight during the country’s frigid winter months. On Thursday, the first snow fell on Kyiv.
/jlne.ws/3Xbi7oy

Former detainees in liberated Kherson allege Russian brutality, torture under occupation
Nic Robertson – CNN
Oleksander’s restless pale blue eyes speak as loudly as his words. He is on edge, and with good reason, as he returns to the jail in the newly liberated city of Kherson where he says Russian guards beat him daily. We pass cell blocks and rusting outdoor exercise cages, move through guard rooms, turnstiles and heavy iron doors, and travel along fences topped in reams of razor wire in this Soviet-era prison until we reach one of the epicenters of Russia’s brutal occupation of Ukraine. It’s here, in a dark and rubble-strewn corridor, that Oleksander and another former prisoner who didn’t want to be interviewed say Russian guards executed Ukrainian prisoners for pro-Ukrainian chants or tattoos.
/jlne.ws/3giawUo

Ukraine Black Sea grain export deal extended; Kyiv says agreement to be prolonged by 120 days despite Russian blockade
Roman Olearchyk, Ayla Jean Yackley and Max Seddon – Financial Times
Ukraine says negotiators from Kyiv and Moscow have agreed to prolong a UN and Turkish-brokered Black Sea grain export agreement, a crucial step to alleviating a global food crisis triggered by the conflict.
/jlne.ws/3GtYh1Q

Exchanges, OTC and Clearing

Fireside Friday with… SDX’s David Newns; The TRADE catches up with the Head of SIX Digital Exchange (SDX), David Newns, to discuss the development of migration pathways between traditional and blockchain infrastructure, the impact of the FTX debacle, and the crucial importance of regulation when it comes to digital asset adoption.
Laurie McAughtry – The Trade
How did SDX get started? The SDX project has been going on for about four years. Back in 2018 SIX Group decided that DLT blockchain technology was going to be revolutionary in the financial markets space and bring significant benefits to the financial market infrastructure (FMI) space in particular. So we decided to set up a digital securities exchange, leveraging that technology to add value to existing asset classes that were already being traded on the traditional infrastructure, with the hypothesis that in a few years’ time, this would be the infrastructure upon which all activities would eventually be conducted.
/jlne.ws/3Ek9rU7

ASX scraps DLT post-trade project after six years as once heralded initiative leaves behind a trail of failings; Exchange’s CHESS replacement project with Digital Asset comes to an end after significant time and costs are poured in over six years to no avail.
Jonathan Watkins – The Trade
The Australian Securities Exchange’s (ASX) has walked away from its planned distributed ledger technology (DLT) project to replace its legacy clearing and settlement system, ending a six-year journey filled with delays and criticism. The project, first announced in 2016, was once seen as the poster child of innovation within the market infrastructure and post-trade space, being the first blockchain project launched amid an era of belief that the technology could revolutionise the plumbing of the financial services industry.
/jlne.ws/3XiwUxU

Policymakers must shape competitive EU financial markets to power the digital and green transitions
BME-X
Proposed changes to the MiFIR Review miss their targets, to the detriment of investors, EUglobal competitiveness, and the capacity of EU markets to finance the green and digital transitions. There is widespread consensus among EU policymakers that market fragmentation and opacity are harming the efficiency of EU markets.i However, amid intense discussions over PFOF compromises and the consolidated tape in the MiFIR review negotiations, the organisation of EU equity markets – what should be at the core of the planned reforms – is not getting much attention. Worse, some of the latest proposals in this area risk cementing fragmentation and opacity, to the detriment of investors and EU-global competitiveness.
/jlne.ws/3gasV5z

Abaxx Updates Q3 2022 Commercial Development Activities, Exchange Platform Testing and Regulatory Engagement
Abaxx
Abaxx Technologies Inc., (NEO:ABXX)(OTCQX:ABXXF) (“Abaxx” or the “Company”), a financial software company, majority shareholder of Abaxx Singapore Pte. Ltd., the Abaxx Commodity Exchange (ACX), and producer of the SmarterMarkets™ Podcast, summarizes activities from Q3 2022, the progress of the Company’s business plans, and milestones for the remainder of 2022.
/jlne.ws/3V50AMQ

UMR driving up volumes in Total Return Futures as a beta replacement solution; In this feature, Stuart Heath, director, equity product design at Eurex, discusses the development of total return futures (TRFs) as a beta replacement in the context of the final roll-out of uncleared margin rules (UMR), and explores with Amy Borgquist, executive director, delta one equity structuring at Goldman Sachs, the benefits of TRFs as part of buy-side trading strategies.
Eurex
TRFs have attracted more interest from buy-side firms as they begin to be impacted by stages 5 and 6 of UMR. Some investors are already using them as part of their toolbox in adapting to the new regime. Others are still aiming to trade a reduced level of derivatives to stay below the initial margin threshold or trying to find efficiencies through collateral management. Most buy-side firms using TRFs do so independently of any concerns around UMR and margin.
/jlne.ws/3UNJqDT

African Exchanges Linkage Project (AELP) Goes Live on Cross-border Trading
JSE
The AELP has today gone live on integrating the African capital markets by facilitating cross-border trading and free movement of investments in the continent through the AELP Link platform. The go-live happened when the platform was officially switched on at 0000 UTC. The interconnectivity platform enables the trading of exchange-listed securities across 7 participating securities exchanges.
/jlne.ws/3hO0gUl

Position Limits – Cash Settled Interest Rate Listed Products
TMX
The applicable position limits for cash settled interest rate futures and options on cash settled interest rate futures have been updated and are reflected in the position limit file. The position limit file is available in Annex 1 and retrievable here.
/jlne.ws/3Vbf2mm

Revision in methodology of Nifty equity indices for handling corporaten actions involving mergers
NSE
NSE Indices had floated a market consultation paper on treatment of merger/demerger in Nifty equity indices on October 18, 2022. Based on the feedback received from the market participants, the Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make revision in methodology of Nifty equity indices for treatment of mergers as mentioned hereunder.
/jlne.ws/3EIulxw

Fintech

Mark Cuban-backed fintech Dave says no customers exposed to FTX
Saeed Azhar and Manya Saini – Reuters
Entrepreneur Mark Cuban-backed Dave Inc (DAVE.O) said on Thursday none of its customers were exposed to FTX and it has not launched any products in partnership with the beleaguered cryptocurrency exchange. FTX had invested $100 million in the fintech in March, through FTX ventures, to expand Dave’s digital assets offerings and the company had said FTX US would be its exclusive partner for crypto. “We have not launched any products in partnership with FTX and no customers are exposed through Dave,” the company spokesperson said in a statement to Reuters.
/jlne.ws/3ghPqWo

Twitter ‘closes offices’ after Elon Musk’s loyalty oath sparks wave of resignations; The tech company is struggling to retain workers after Musk demanded employees sign a pledge to work ‘long hours at high intensity’
Josh Taylor – The Guardian
The crisis at Twitter reached new heights on Friday as hundreds of employees were reported to have rejected Elon Musk’s ultimatum to keep working for the business, threatening its ability to keep operating. As the company temporarily closed its offices to staff, Twitter users began saying their goodbyes and linking to accounts on other platforms. #RIPTwitter, #TwitterDown, Mastodon and Myspace were all trending on the platform after the deadline passed on Musk’s ultimatum for the remaining workforce to sign up for “long hours at high intensity”, or leave. It has been estimated that hundreds of the remaining staff opted to go.
/jlne.ws/3gdRZc6

This Is the Memo Twitter Sent Telling Staff Offices Were Closed
Kurt Wagner – Bloomberg
Twitter Inc. on Thursday announced it was temporarily closing its offices after Elon Musk issued employees an ultimatum: Stay with the company “working long hours at high intensity” or quit with three months’ severance pay. The closure until Monday came after more workers than expected opted for the latter option, according to people familiar with the situation, causing confusion over who should still be allowed access to Twitter premises.
/jlne.ws/3UR0oBa

BofA: Don’t Tarnish Blockchain Technology With Speculative Crypto Trading
Will Canny – CoinDesk
It is important to separate speculative crypto trading and token prices from the underlying blockchain technology, Bank of America (BAC) said in a research report Thursday after a group of major banks and the Federal Reserve Bank of New York started testing the use of digital tokens representing dollars. Citigroup (C), HSBC (HSBC), BNY Mellon (BK) and Wells Fargo (WFC) are among those taking part, as is payments giant Mastercard (MA), the New York Fed said on Tuesday.
/jlne.ws/3Xggnds

Cybersecurity

Cybersecurity experts blow the whistle on official apps for World Cup attendees
Andrew Paul – Popular Science
The FIFA 2022 World Cup is set to begin in a matter of days, but European cybersecurity experts are urging sports fans traveling to Qatar to think twice before downloading the event’s official event apps. Authorities from Germany, Norway, and France have all recently issued notices about the nation’s ticket and accommodations app, Hayya, as well as its COVID-19 contact tracing app, Ehteraz, citing the highly suspicious levels of personal data access each requires. According to their Google Play Store listings, Hayya is available under the banner of Qatar’s Supreme Committee for Delivery & Legacy, while Ehteraz is owned by the Ministry of Interior.
/jlne.ws/3EbPFtO

Musk’s Twitter Deal Remains in Focus for US Data-Security Review; Takeover still vulnerable to American national security review; Business exposure to Saudi, Qatar, China said to be concern
Daniel Flatley, Jennifer Jacobs, and Saleha Mohsin – Bloomberg
Elon Musk’s $44 billion takeover of Twitter Inc. is still facing US government scrutiny over national-security concerns that his foreign partners may be able to access user data, people familiar with the matter said. The US government continues to seek information on confidential agreements that Musk made with foreign investors who hold stakes in Twitter after he bought it, and whether those deals allow them to access users’ personal data, said one of the people, who asked not to be identified discussing sensitive deliberations.
/jlne.ws/3tMizvL

Cryptocurrencies

‘Wave’ of lawsuits over FTX expected, but investors will face legal hurdles
Jody Godoy – Reuters
A lawsuit by FTX account holders in the United States is likely the first of many that will be brought over billions of dollars in losses on the cryptocurrency exchange, though the cases will face obstacles including proving that U.S. securities law applies to FTX’s products, experts said. The lawsuit, filed in Miami federal court on Tuesday, claims FTX founder Sam Bankman-Fried and celebrities including NFL quarterback Tom Brady and basketball Hall of Famer Shaquille O’Neal, engaged in deceptive business practices by promoting unregistered securities.
/jlne.ws/3Vaq6Ab

Crypto lender Genesis had sought emergency loan of $1 billion – WSJ
Reuters
Cryptocurrency lender Genesis was seeking an emergency loan of $1 billion from investors before it suspended withdrawals on its website, the Wall Street Journal reported on Thursday, citing a confidential fundraising document. The document viewed by the Journal cites a “liquidity crunch due to certain illiquid assets on its balance sheet” at Genesis. On Wednesday, Genesis Global Capital suspended customer redemptions in its lending business, citing the sudden failure of Sam Bankman-Fried’s crypto exchange FTX.
/jlne.ws/3Gp0LP5

People Are Already Buying Depositor Claims on FTX; Crypto distressed buyers get active
Joe Weisenthal – Bloomberg
It looks like some traders who have money stuck on the fallen cryptocurrency exchange FTX are already selling their claims in over-the-counter trading. Thomas Braziel, the founder of 507 Capital, who has been active in past crypto bankruptcies, says he’s currently seeing claims being sold “between 5 cents and 8 cents on the dollar” in private offerings. Braziel, who says he has purchased one $8 million FTX deposit at a price of 3 cents on the dollar, says there are a few key factors right now that help determine how much a theoretical FTX depositor can get on their claims.
/jlne.ws/3UPkTOz

Sam Bankman-Fried’s Alameda Research Repaid Stimulus Money; Trading house at the center of FTX’s collapse was approved for roughly $370,000 in April 2020. The loan is getting fresh attention on social media.
Paulina Cachero – Bloomberg
There’s at least one creditor who Sam Bankman-Fried paid back. Alameda Research LLC, the trading house at the center of Bankman-Fried’s imploding crypto empire, was approved for a $370,518 loan from the Paycheck Protection Program in April 2020. The program was intended to help companies keep workers employed during the early Covid lockdowns. The loan is listed as “paid in full,” according to a government database.
/jlne.ws/3EkCAhU

Fallen FTX Founder Bankman-Fried Gives Regulators the Middle Finger; Sam Bankman-Fried fires off a missive about financial regulators on Twitter and discusses them with a reporter.
Ellen Chang – TheStreet
Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, can not hide his disgust at financial regulators. The 30-year old former billionaire borrowed a whopping $1 billion from one of his bankrupt companies that he founded in 2019, but dismisses the role of regulators. Now both he and and FTX and hedge fund Alameda Research are under criminal investigation by the Department of Justice and the U.S. Securities and Exchange Commission.
/jlne.ws/3GmplQC

What FTX’s Bankman-Fried Said When We Asked Him About Red Flags; Excerpts from summer interviews with the onetime crypto mogul and his trading firm’s CEO paint a far different picture than is now being revealed in bankruptcy court documents.
Annie Massa, Anna Irrera, and Hannah Miller – Bloomberg
It was late August, and Sam Bankman-Fried appeared on a computer screen, sporting the black headphones, T-shirt and floppy bedhead that were his trademark as the ubiquitous face of crypto and the chief executive officer of FTX. Questions were building about the exchange’s relationship with Alameda Research, the trading firm he started that’s behind the collapse of the cryptocurrency exchange. At the time, however, Bankman-Fried appeared eager to dispel concerns and agreed to an extensive interview. Bloomberg News also spoke with Alameda CEO Caroline Ellison, who usually avoided the spotlight.
/jlne.ws/3V0puxm

FTX’s New Boss Reveals Chaos Left Behind by Bankman-Fried; John J. Ray alleges effort to conceal misuse of customer funds; Advisers have secured $740 million of crypto in cold wallets
Jeremy Hill and Steven Church – Bloomberg
Advisers overseeing the ruins of Sam Bankman-Fried’s FTX Group laid bare a stunning list of allegations against the company’s former leadership Thursday, slamming non-existent oversight and the misuse of client funds as they struggle to locate billions of dollars in missing assets. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” John J. Ray III, the group’s new chief executive officer who formerly oversaw the liquidation of Enron Corp., said in a sworn declaration submitted in bankruptcy court.
/jlne.ws/3GrHCMc

Factbox: FTX’s new CEO assesses the exchange’s failings
Tom Hals – Reuters
John J. Ray III, the new chief executive of bankrupt cryptocurrency exchange FTX, on Thursday laid out his assessment of the failures that led to the biggest collapse in the world of digital assets. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said in a declaration filed with the U.S. Bankruptcy Court in Delaware.
/jlne.ws/3XbmdNs

How FTX bought its way to become the ‘most regulated’ crypto exchange
Chris Prentice, Angus Berwick and Hannah Lang – Reuters
Before it collapsed this month, FTX stood apart from many rivals in the largely unsupervised crypto industry by boasting it was the “most regulated” exchange on the planet and inviting closer scrutiny from authorities. Now, company documents seen by Reuters reveal the strategy and tactics behind founder Sam Bankman-Fried’s regulatory agenda, including the previously unreported terms of a deal announced earlier this year with IEX Group, the U.S. stock trading platform featured in Michael Lewis’s book “Flash Boys” about fast, computer-driven trading.
/jlne.ws/3EjX0HX

Crypto Is Flowing Out of Exchanges: ‘Severe’ Outflows From Gemini, OKX and Crypto.com, Says JP Morgan
Mathew Di Salvo – Decrypt
Investors are pulling funds out of major crypto exchanges as a result of the collapse of FTX, JPMorgan analysts have said. In a note to investors Wednesday, analysts at the investment bank noted that all major exchanges experienced outflows last week but Gemini, OKX and Crypto.com had the most “severe” draining of funds.
/jlne.ws/3XdylgV

Hong Kong’s leading crypto retail operator says it ceases trading as FTX fallout roils sector
Georgina Lee – Reuters
A leading cryptocurrency retail service provider in Hong Kong said it has ceased trading as the broader fallout from the collapse of FTX, and solvency issues at other major crypto firms, continues to roil the sector. Genesis Block, which at one time operated one of Asia’s biggest bitcoin ATM networks, said it would be closing down its over-the-counter trading portal on Dec. 10, according to an email to customers sent by its compliance department reviewed by Reuters.
/jlne.ws/3Gqq3fC

Binance pauses customer deposits of stablecoins Tether and USD Coin without explanation
Brian Evans – Business Insider
Cryptocurrency exchange Binance paused customer deposits of stablecoins USD Coin and Tether Thursday morning without explanation. The company posted an update around 7:00 a.m. asserting deposits of both tokens “have been temporarily suspended until further notice.” Both tokens maintained their peg to the US dollar as of presstime. Binance did not immediately respond to Insider’s request for comment.
/jlne.ws/3TOE0qX

A new bankruptcy filing shows the value of FTX’s crypto holdings is just $659,000, after Sam Bankman-Fried said they were worth $5.5 billion
Matthew Fox – Business Insider
The FTX chapter 11 bankruptcy filing is shedding new light on just how bad the internal controls at the crypto exchange were up until it imploded in spectacular fashion last week. A particularly jarring disclosure is that the total fair value of crypto held by FTX International was just $659,000 as of the end of September, compared to claims from its founder Sam Bankman-Fried’s that the company held $5.5 billion in “less liquid” crypto tokens.
/yhoo.it/3VpICoH

Bahamas regulator orders transfer of all FTX digital assets to government wallet
Pradipta Mukherjee – Forkast
The Securities Commission of The Bahamas (Commission) on Nov. 12 ordered the transfer of all digital assets of FTX Digital Markets (FDM) to a digital wallet controlled by the Commission, for “safekeeping,” in an announcement on Nov. 17.
/jlne.ws/3UPTJXR

FTX Affiliate Alameda Research Loaned $4.1B to Related Parties: Court Filing
CoinDesk
Alameda Research, the venture capital and trading firm affiliate of collapsed crypto exchange FTX, made $4.1 billion in loans to related parties, including $1 billion to former FTX CEO Sam Bankman-Fried, according to bankruptcy filings Thursday. CoinDesk Deputy Managing Editor Tracy Wang joins “All About Bitcoin” to discuss.
/jlne.ws/3AqSsyg

‘God Mode’: SBF’s Alameda Had ‘Secret Exemptions’ on FTX, New CEO Alleges
Andrew Hayward – Decrypt
Although long presented as separate entities, Sam Bankman-Fried’s FTX crypto exchange and Alameda Research trading firm were deeply intertwined, as the world has increasingly discovered since the firms filed for bankruptcy protection last week. Now FTX’s new CEO has alleged that Alameda had secret benefits on the FTX exchange that other traders didn’t. John J. Ray III, the newly appointed FTX CEO who previously oversaw Enron’s bankruptcy proceedings, filed a court statement today in support of the firm’s Chapter 11 filing-and it’s a scathing rebuke of the firm’s approach to doing business under Bankman-Fried.
/jlne.ws/3EG7N0q

FTX Employees Used Company Funds to Buy Homes in the Bahamas; There were no expense controls for employees whose expenses were approved by chat with personalized emojis, according to the new CEO.
Luc Olinga – The Street
The news will cause unprecedented anger among customers of FTX, which filed for bankruptcy on November 11. The cryptocurrency exchange, which was still valued at $32 billion in February, imploded overnight. This debacle is spreading to other cryptocurrency exchanges. Regulators have opened investigations. FTX clients and investors began to establish their losses. It is not certain that they will recover their money.
/jlne.ws/3UQb6bd

Crypto Users Want to Pay Taxes, but We Need Clearer Rules
Richa Joshi – CoinDesk
Something often said about the crypto community is that it’s full of libertarian tax cheats. The stereotype doesn’t come from nowhere – crypto does have its roots in crypto-anarchist ideology. And many of our favorite stories often involve “sovereign individuals” and “oppressive regimes,” even though those fables are distorted into antagonistic media narratives about the industry.
/jlne.ws/3ghPOUM

Winklevoss twins’ Gemini crypto exchange caught up in FTX meltdown
Thomas Barrabi – Bloomberg
More signs of trouble have surfaced at the Winklevoss twins’ embattled cryptocurrency exchange Gemini after FTX’s sudden collapse into bankruptcy sparked fears of a sector-wide contagion. CoinDesk reported on Wednesday that Gemini had experienced a $563 million rush in customer outflows in the last 24 hours, compared to just $78 million in inflows. The net outflow was the largest among any cryptocurrency platform.
/jlne.ws/3ESlda1

FTX Catastrophe Likely Triggered By Terra Collapse: Nansen
Stacy Elliott – Decrypt
Blockchain analytics firm Nansen says that there was never a clear delineation between FTX and Alameda Research, and that FTX’s strategy for keeping Alameda afloat started to come apart around the time TerraUSD collapsed. Nansen published a lengthy analysis of on-chain data on Thursday, just over a week after the intertwined entities collapsed, with the failure still reverberating broadly across the crypto sphere.
/jlne.ws/3TNlZZY

FTX Latest: Bankman-Fried Faces Grilling; Bitcoin Weathers Gloom
Bloomberg
Democratic lawmakers who received millions of dollars in campaign donations from Sam Bankman-Fried say they will be ready to grill the former FTX CEO about the exchange’s collapse. Liquidators appointed by a Bahamian court to take over FTX Digital Markets Ltd.’s affairs said there’s “significant” concern that FTX management lacked authority to put the crypto businesses into bankruptcy in the US.
/jlne.ws/3V5OAKV

IEX Seeks New Crypto Path After FTX Unraveling Undoes Its Partnership; Exchange operator ceases contact with former partner FTX; Still hopes to get into the digital-asset trading space
Allyson Versprille and Katherine Doherty – Bloomberg
IEX Group Inc., owner of the stock exchange made famous by “Flash Boys,” is looking for a new crypto partner after FTX’s crash ended a collaboration the pair started earlier this year. IEX has cut its ties with FTX, the digital-asset firm which spiraled into bankruptcy last week, according to people familiar with the situation. In April, FTX US acquired a stake in IEX as part of an effort to expand access to digital assets for retail and institutional investors. That stake represented less than 20% of the company, the people said.
/jlne.ws/3EFCh2C

Bank of America Says Crypto Exchanges’ Proof of Reserves Have Too Many Shortcomings
Will Canny – CoinDesk
Following the collapse of FTX and Alameda Research, crypto trading platforms are rushing to show that clients’ assets are safe and not being used for speculation, but “proof of reserves, at least in the form they’ve been suggested, have too many shortcomings to inspire confidence,” Bank of America (BAC) said in a research report Thursday.
/jlne.ws/3XgJkGg

Solana NFT Protocol Metaplex Announces Layoffs in Wake of FTX Collapse
Sander Lutz – Decrypt
Solana NFT protocol maker Metaplex announced on Thursday that it has undergone a company-wide round of layoffs, as the contagion induced by crypto exchange FTX’s collapse last week continues to spread across the Web3 ecosystem.
/jlne.ws/3tEgaDu

Politics

Flashback: Bill Clinton hung with Bankman-Fried at $3K Bahamas shindig, called for ‘do no harm’ regulations
Chris Pandolfo – Fox Business
Months before FTX founder and crypto tycoon Sam Bankman-Fried lost his $15.6 billion fortune and his company, he was palling around with former President Bill Clinton at a swanky cryptocurrency conference in the Bahamas.
/jlne.ws/3OhRryg

GOP plans to punish ‘woke’ Wall Street; GOP lawmakers are singling out major asset managers as likely targets because of climate investing practices they see as hostile to oil, gas and coal.
Zachary Warmbrodt and Sam Sutton – Politico
Wall Street loves Republican tax cuts and deregulation. It’s going to hate the GOP’s plans for 2023. Republican lawmakers, who will be in the House majority come January, are pressing party leaders to send a message to big financial firms: Stop appeasing the left with “woke” business practices, keep financing fossil fuels and cut ties with China. Republicans will have committee gavels and subpoena powers to back that up.
/jlne.ws/3EfOIRv

U.S. to issue more guidance on Russian oil price cap in coming days
Andrea Shalal – Reuters
The U.S. government plans to issue guidance in coming days on a Russian oil price cap taking effect on Dec. 5 and is ready for some “hiccups” in its implementation, a State Department official said on Thursday. Jim Mullinax, director of the Office of Sanctions Policy and Implementation, told a panel hosted by Thomson Reuters that the government was in close touch with industry and international partners about the oil price cap, and was approaching it with a “spirit of flexibility.”
/jlne.ws/3AqH4SZ

Survivors of Black Wall Street Massacre Challenge Tulsa’s Atonement Strategy; Three plaintiffs, all over 100 years old, say the 1921 destruction of Tulsa’s Greenwood neighborhood has harmed the wealth and well-being of Black residents to this day. The city has tried three times to dismiss their lawsuit.
Brentin Mock – Bloomberg
In 1921, a mob of white residents in Tulsa, Oklahoma, including police, burned down the nearly 40-acre African American Greenwood neighborhood known as “Black Wall Street” – then one of the wealthiest Black communities in the US. There’s some dispute about how it started – an unfounded rumor of a Black man either offending or assaulting a white woman – but there is no dispute how it ended: with hundreds of Black Tulsans killed and thousands more displaced.
/jlne.ws/3OeNiv6

There’s a $15 Solution to the US-Saudi Oil Feud; An oil price that Texas can rely on, Washington can stomach and Riyadh can live with is within reach.
Liam Denning – Bloomberg
The relationship between Washington and Riyadh has reached that stage where Saudi Arabian officials give TV interviews to say how good it is. The current tiff has deep roots but the immediate problem concerns – what else? – oil, where the US and Saudi Arabia have been pulling in opposite directions. President Joe Biden has released about 165 million barrels from the Strategic Petroleum Reserve, or SPR, since March to moderate prices. Meanwhile, Saudi Arabia has sought to support prices by curbing supply, most dramatically with the two million barrel a day target cut announced by OPEC+ in early October, drawing fire from the White House and Congress.
/jlne.ws/3V3myQo

Bankman-Fried Turns Toxic in Congress Even Among Those He Backed; The Democratic Party mega-donor will likely be called to testify before Congress after his crypto exchange imploded.
Laura Davison – Bloomberg
Lawmakers who received millions of dollars campaign donations from Sam Bankman-Fried could soon get something else from the former FTX chief executive officer: testimony under oath. Recipients of those political contributions say they’re prepared to grill Bankman-Fried about why his crypto exchange suddenly crashed, potentially causing billions of dollars in losses for millions of FTX account holders. Before the collapse, he donated tens of millions of dollars from his crypto-empire fortune to benefit Democrats, making him the second-largest donor to the party this election.
/jlne.ws/3hIE2Da

City of London Gets Long-Awaited Insurer Reform, Surcharge Cut; Jeremy Hunt releases Solvency II reforms alongside statement; Surcharge cut to shield banks from corporation tax rise
Katherine Griffiths and William Shaw – Bloomberg
After years of fraught debate between regulators, insurers and the Treasury, Jeremy Hunt confirmed Thursday that the government would push forward with reforms to a corner of the City of London that’s intended to release billions of pounds of investment into the economy. The plan, thrashed out at the last minute before Hunt’s statement with some details still to be clarified, could mean insurers will be able to direct “more than £100 billion” into infrastructure and green energy over ten years, according to Hannah Gurga, director general of the Association of British Insurers.
/jlne.ws/3EgCxDX

EU Tries to Break COP27 Deadlock With Offer on Loss and Damage Fund; Egypt’s first draft decision lacks fossil fuel phase down; EU’s Timmermans calls for stronger mitigation language
Bloomberg
Climate talks in Sharm el-Sheikh edged forward after the European Union offered a plan to break deadlocked climate negotiations in Egypt, proposing a loss and damage finance facility for the most vulnerable countries in exchange for a pledge to phase down oil, gas and coal. The proposal, set out by EU climate chief Frans Timmermans late Thursday evening, came after days of sluggish talks in Sharm El-Sheikh, bogged down by fights over how to compensate developing countries bearing the brunt of climate change through flooding, droughts and other disasters.
/jlne.ws/3hXeGSo

Hong Kong to Reduce Covid Testing Requirement for Arrivals; City to roll out bivalent shots targeting omicron next month; Rising local infections mean further easing isn’t imminent
Shirley Zhao and Felix Tam – Bloomberg
Hong Kong will cut in half the number of laboratory Covid-19 tests new arrivals must undergo starting next week. Travelers will be swabbed for testing at the airport, and then must arrange one additional nucleic acid test on their second day in the Asian financial hub, Under Secretary for Health Libby Lee said at a briefing on Thursday with reporters. The other two tests currently required, conducted on days four and six, will no longer be needed, she said.
/jlne.ws/3XeawW5

Regulation

How SEC Regs Will Change Cryptocurrency Markets
Investopedia
Distrust of governments’ traditional role as issuers of so-called “fiat money” has fueled the phenomenal growth of cryptocurrency markets in recent years. Now that growth is rapidly educating the crypto industry about another key government function-that of regulating financial markets and securities trading. The U.S. Securities and Exchange Commission (SEC) is leading the push to subject cryptocurrency markets to the full spectrum of financial regulations the agency oversees.
/jlne.ws/3GrNCoh

Let crypto burn; Just say no to legitimacy-inferring regulation
Stephen Cecchetti and Kim Schoenholtz – Financial Times
In the aftermath of the collapse of FTX, authorities should resist the urge to create a parallel legal and regulatory framework for the crypto industry. It is far better to do nothing, and just let crypto burn. Actively intervening would convey undeserved legitimacy upon a system that does little to support real economic activity. It also would provide an official seal of approval to a system that currently poses no threat to financial stability and would lead to calls for public bailouts when crypto inevitably erupts again.
/jlne.ws/3V5NJdp

Sonic the Hedgehog co-creator accused of insider trading; Celebrated Japanese video game programmer Yuji Naka arrested over $20,000 investment
Leo Lewis and Eri Sugiura – Financial Times
The co-creator of Sonic the Hedgehog – a veteran programmer who ranks among the most famous figures in the Japanese games industry – has been arrested over an alleged insider dealing scam involving an investment of just $20,000. Yuji Naka, whose producing credits during his early career at games developer Sega spanned major hits like Phantasy Star Online to the less famous Billy Hatcher and the Giant Egg, was arrested on Friday.
/jlne.ws/3Egxjbn

Top Employee of Crypto Exchange BitMEX Sentenced Over U.S. Charge; Gregory Dwyer, one of the exchange’s first employees, pleaded guilty in August to violating U.S. anti-money-laundering rules
Mengqi Sun – The Wall Street Journal
A top employee at cryptocurrency derivatives trading exchange BitMEX was sentenced to 12 months probation Wednesday in federal court in Manhattan after pleading guilty to violating U.S. anti-money-laundering rules. Gregory Dwyer, a 39-year-old native of Australia, was one of the first employees at the exchange and its onetime head of business development. U.S. prosecutors alleged Mr. Dwyer and the exchange’s founders failed to implement anti-money-laundering and know-your-customer programs, as required by U.S. law.
/jlne.ws/3tHwfs8

Keynote of Chairman Rostin Behnam at Bloomberg’s The Final Chapter for USD LIBOR; The Finish Line is in Sight
CFTC
Good afternoon. Thank you to Bloomberg for hosting this event. It’s a pleasure to join you to discuss LIBOR transition and expectations as we approach June 30, 2023, the end date for the remaining settings of U.S. Dollar (USD) LIBOR. Today’s message continues to focus on the progress made by broad market participation in global cooperative and consultative efforts by committees like the Alternative Reference Rates Committee (ARRC).
/jlne.ws/3OpdzXB

Keynote of Chairman Rostin Behnam at the 2022 U.S. Treasury Market Conference
CFTC
Good afternoon. It is a pleasure to join you today in person as we discuss some of the current issues facing the U.S. Treasury Market.[1]
The Russian invasion has been top of mind for most of 2022, chasing the heels of the multi-year Covid-19 pandemic and stacked with monetary and fiscal policy shifts, environmentally and geopolitically driven supply chain disruptions, and Fintech growth, evolution, and failures. In March, I found myself speaking about market developments before a global audience of futures industry professionals. [2] I was cautious but optimistic; taking cues from the past when monetary policy, geopolitics, and technological rifts resulted in tectonic shifts in our markets that compelled resilience and sound policymaking. It is the “critically important, but not always obvious interconnections” within our markets that ensure our maneuverability as regulators so that we can pivot amid predictable ripples and waves of uncertainty.
/jlne.ws/3X9hY4V

Concurring Statement of Commissioner Christy Goldsmith Romero in the Classic Energy Natural Gas Insider Trading Case
CFTC
The Commission brought a civil enforcement case connected to a criminal insider trading conspiracy in natural gas markets referred to as the Classic Energy cases. The follow-on CFTC civil case is against co-conspirator, and former Classic Energy broker Lee Tippett, who awaits sentencing after his criminal conviction for conspiracy to commit honest services wire fraud and commodities fraud. I supported the Commission’s enforcement action against the defendant. However, I did not support settling that action prior to an upcoming trial in this case against another defendant where the Commission may require the defendant’s cooperation, and prior to his sentencing. Nor did I support any language in the settlement that allows the defendant to escape admitting to all of his wrongdoing, given that he played a part in a massive criminal scheme.
/jlne.ws/3X6yjHw

SEC Charges Unregistered Brokers that Facilitated more than $1.2 Billion in Primarily Penny Stock Trades
SEC
The Securities and Exchange Commission today charged Jeffrey K. Galvani, Stuart A. Jeffery, and two New York-based entities they controlled with operating as unregistered broker-dealers that facilitated more than $1.2 billion of securities trading, primarily in penny stocks.
/jlne.ws/3TMwuwK

Remarks at the 2022 Cato Summit on Financial Regulation
Commissioner Mark T. Uyeda – SEC
Thank you, Jennifer [Schulp], for the kind introduction. Good morning to everyone here in person and those participating virtually. I appreciate being part of your conference focusing on the rise of environmental, social, and governance (ESG) investing and the future of financial regulation. The conference raises a number of important questions, such as “what is ESG?,” “what role should ESG play in investment decisions?,” and “should ESG be considered in assessing financial stability?”[1] As you consider these issues, I wanted to share some thoughts that reflect my individual views as a Commissioner and do not necessarily reflect the views of the full Commission or my fellow Commissioners.
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Statement on Speaker Pelosi’s Future Plans
Commissioner Jaime Lizarraga – SEC
Today, House Speaker Nancy Pelosi closes a chapter in her exceptional American journey.
For nearly 15 years, and immediately prior to my swearing in as SEC Commissioner this past July, I had the privilege of serving as her senior adviser.
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SEC Charges Unregistered Brokers That Facilitated More Than $1.2 Billion in Primarily Penny Stock Trades
SEC
The Securities and Exchange Commission today charged Jeffrey K. Galvani, Stuart A. Jeffery, and two New York-based entities they controlled with operating as unregistered broker-dealers that facilitated more than $1.2 billion of securities trading, primarily in penny stocks.
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FCA issues Final Notice to former CEO for anti-money laundering failings
FCA
The Financial Conduct Authority has publicly censured Mohammad Ataur Rahman Prodhan, the former Chief Executive Officer of Sonali Bank (UK) Limited (SBUK) for anti-money laundering (AML) failings.
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Sam Bankman-Fried was ordered by Bahamian government to hack FTX after bankruptcy, FTX tells court
Thomas Barrabi – NY Post
FTX’s new boss accused disgraced CEO Sam Bankman-Fried of hacking into the company – while in custody of the Bahamian government – to obtain digital assets belonging to FTX after it had filed for bankruptcy, according to a bombshell lawsuit filed Thursday. John J. Ray – an insolvency expert who steered energy firm Enron through its infamous $23 billion bankruptcy following a massive accounting scandal – alleged the “unauthorized access’ transferred FTX assets into accounts outside the control of management, according to the Wall Street Journal.
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Investing and Trading

Americans Are Investing Less in the Stock Market as Inflation Crimps Budgets; One in four retail investors are directing funds to essentials; Two thirds would feel more confident if inflation came down
Alexandre Tanzi – Bloomberg
Americans with money in the stock market are allocating more of their dollars toward everyday essentials instead of investing to budget for decades-high inflation, according to a new survey. One in four retail investors are putting less into the stock market so they can cover expenses like groceries, gasoline and housing, according to a survey of US adults conducted by Wells Fargo & Co. Furthermore, they’re so nervous about their investments that 42% want to cash out, and nearly a third would deplete their IRA or 401(k) accounts if they could do so without tax penalties.
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U.S. IPO price pops prompt fraud and ‘pig butchering’ warnings
John Mccrank – Reuters
U.S. exchanges and Wall Street’s top cop on Thursday warned about a heightened threat of fraud mostly involving the initial public offerings of small companies, driven in part by a social media-driven pump-and-dump scheme called “pig butchering.” In a rare move, Nasdaq Inc (NDAQ.O), Intercontinental Exchange Inc’s (ICE.N)New York Stock Exchangeand the Financial Industry Regulatory Authority (FINRA) published notices about manipulation and fraud tied to market debuts.
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Record Options Trading Shows Jitters Before $2 Trillion ‘OpEx’; The 4,000 level for S&P 500 is a battlefield for bulls, bears; Cboe put-call ratio for single stocks reaches a 25-year high
Lu Wang – Bloomberg
Nowhere better illustrates Wall Street’s febrile sentiment than the stock-derivatives market, where trading volumes are breaking records heading into Friday’s $2.1 trillion options expiration. The monthly event, known as OpEx, has a reputation for stoking volatility as traders and dealers rebalance their big exposures en masse. Now, with demand for both bullish and bearish index contracts booming while hedging in single stocks explodes in popularity, OpEx comes at a precarious time.
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Chinese investors burnt by bond slump urged to have ‘serene heart’
Reuters
Sharp declines in Chinese bond prices as the government takes steps to boost the economy have prompted an investor outcry and a rush of redemptions, putting pressure on asset managers to restore confidence in their fixed-income products. Asset managers are urging investors to hang on, as the products may recover from their current losses, but some investors have shifted money out of the market and some analysts warn the bond bull market may be over.
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How does a gold IRA work?
Tim Maxwell – CBS News
Amid record inflation and fears of a looming recession, many Americans may be exploring new options to save money and invest for their future. Many are cautious of recent stock market volatility, especially those that saw their retirement savings plummet in 2022. Facing uncertainty in the economy and global affairs, many investors are adding gold to their portfolios as a hedge against inflation and economic uncertainty. If you’re concerned about the declining value of your IRA or pension, you might consider a gold IRA. Understanding what a gold IRA investment is, how it works, and how you might benefit from it can help you decide if one makes sense for you.
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Mortgage Market Upheaval Spurs $17 Billion in Paper Losses for Banks; Unrealized losses will hinder banks’ efforts to boost capital; Buybacks will probably remain on pause amid capital headwinds
Jennifer Surane and Hannah Levitt – Bloomberg
Higher interest rates helped Wells Fargo & Co. land more than $3 billion in profit in the third quarter. From a capital perspective, they also wiped out nearly three-quarters of that. While rising rates buoy revenue for the country’s largest banks, in the short term they also force them to write down the value of assets they hold on their balance sheet, exacerbating a capital squeeze that’s prompted most of them to halt buybacks. At Wells Fargo, it was an additional $2.4 billion in unrealized losses on mortgage-backed securities and other bonds that weighed on shareholder equity in the third quarter.
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Environmental, Social and Corporate Governance

CEQ Launches Global Net-Zero Government Initiative, Announces 18 Countries Joining U.S. to Slash Emissions from Government Operations
The White House
At the 2022 United Nations Climate Change Conference of the Parties (COP27), the United States launched the Net-Zero Government Initiative, inviting governments to lead by example and achieve net-zero emissions from national government operations by no later than 2050. During a COP27 event with partner nations, Council on Environmental Quality Chair Brenda Mallory and U.S. Special Presidential Envoy for Climate John Kerry announced that 18 countries have joined the United States in this new Initiative. Countries joining the United States in committing to net-zero government emissions include: Australia, Austria, Belgium, Canada, Cyprus, Finland, France, Germany, Ireland, Israel, Japan, Korea, Lithuania, Netherlands, New Zealand, Singapore, Switzerland, and the United Kingdom.
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To save salmon, U.S. approves largest dam removal in history
Daniel Trotta – Reuters
A U.S. agency seeking to restore habitat for endangered fish gave final approval on Thursday to decommission four dams straddling the California-Oregon border, the largest dam removal undertaking in U.S. history. Dam removal is expected to improve the health of the Klamath River, the route that Chinook salmon and endangered coho salmon take from the Pacific Ocean to their upstream spawning grounds, and from where the young fish return to the sea.
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From “orderly transition” to “hot house world” – how climate scenarios can facilitate action
Jean Boissinot, Paula González Escribano, Cornelia Holthausen, Laura Parisi, Clément Payerols and Livio Stracca – European Central Bank
Climate change is happening right now, and is already having an impact on us all, though not everywhere in the same way. But do we share a common understanding of how climate change affects our economies and our financial systems? And what impact it has on growth, inflation or unemployment? Without a common language for climate risks it will be difficult to agree on urgently needed common policy responses. To help build such understanding, central bankers and supervisors have joined forces as the Network for Greening the Financial System (NGFS).
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The floating solar panels that track the Sun
Isabelle Gerretsen – BBC
On a lake in the Netherlands, a shiny circular island floats, covered in dozens of shimmering solar panels. But this is no normal solar array, nor even simply one of the many new floating solar farms being installed in lakes, reservoirs and coastal areas across the world. That’s because its panels are doing something none of these other floating solar farms can do: meticulously tracking and following the Sun as it moves across the sky, to catch as many rays as possible.
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United States at risk of tight electric supplies this winter – NERC
Reuters
A large portion of North America is at risk of insufficient electricity supplies during peak winter conditions, the organization responsible for the reliability of the U.S. power grids said on Thursday. Those reliability concerns stem from higher peak demand projections, generator retirements, generator vulnerability to extreme weather and fuel supply and natural gas infrastructure limitations, the North American Electric Reliability Corp (NERC) said on a webcast of its 2022-2023 Winter Reliability Assessment.
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West Texas Was Just Rocked By the Biggest Earthquake It Has Ever Seen
Mitchell Ferman – Bloomberg
West Texas was hit by its largest earthquake on record on Wednesday, rattling parts of the Permian Basin in a reminder of the seismic impact of fracking. The 5.3-magnitude earthquake hit at 3:34 p.m. local time near Mentone, Texas, according to the US Geological Survey. The event topped a magnitude 5 quake that struck just north on March 26, 2020 and was considered the region’s largest.
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This warm autumn is a warning: Britain’s seasons are changing for good; A mild November may be talked of as a ‘freak weather event’, but the climate crisis will make the abnormal normal
Sophie Pavelle – The Guardian
My fingers should be numb. My breath should rise in clouds. I want leaves to crunch and snap beneath my feet. I want to have to pull my coat tightly around me, to ram a hat low over my ears. I expect to be locking horns with the thermostat. But instead I find myself overheating. Is this the new November? Following soaring temperatures across Britain throughout 2022 and a distinct lack of rain, we knew better than to expect our weather to resume its familiar winter course. An African plume of hot air whipping off the tropics, the Azores and Cape Verde has lifted London’s temperatures 8C above average. Porthmadog, north Wales, had a high of 21.2C on Remembrance Sunday. And we’re still pursuing a limit on global temperature rise of 1.5C.
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All this on our doorstep’: conservation and resistance on Gallows Down
Jonathan Moses – The Guardian
High on a ridge above the village of Inkpen in the North Wessex Downs, a gibbet looms like a sentinel. “Every time you come up, you just have to give it a pat. It’s the most grisly thing,” laughs Nicola Chester. The gibbet was used to display the bodies of two murderous lovers in 1676. Since then, the centuries have seen the gibbet brought low by lightning, political vandalism and rot, only to be resurrected each time with oak trees felled from the same estate. Chester titled her award-winning nature memoir, On Gallows Down: Place, Protest and Belonging, after the macabre structure, and the hill that takes its name. “It’s a beacon for home, but also a ‘sending off’ place. A hotspot for migrating birds. A gathering place for stories and a conduit for protest. From it, you can see every chapter of my book, and all the places I’ve ever lived,” she says.
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What’s in a name? EU watchdog cracks down on ESG investment funds
Huw Jones – Reuters
The European Union’s securities watchdog on Friday proposed strict curbs on how investment funds are sold in the bloc if they tout environmental, social and governance (ESG) credentials to attract cash.ESG funds have grown in popularity in recent years and in the second quarter of this year accounted for 27% of share assets under management in funds across the EU, according to figures from the European Securities and Markets Authority (ESMA).
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Factbox: The newest fronts in climate-change-related legal battles
Clark Mindock – Reuters
Climate change-related litigation has more than doubled in the past seven years globally according to a June report by the London School of Economics, and is moving beyond traditionally polluting industries such as fossil fuel production. At the COP27 climate talks in Egypt, U.N. experts last week warned that many corporate environmental claims amounted to “empty slogans and hype.” This could embolden campaigners to launch more legal cases against climate-action laggards.
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Egypt to Speed Up Plans to Export Power and Hydrogen to Europe; Talks on undersea cable to Cyprus are advancing, says minister; Hosting of COP27 summit has boosted momentum, says el-Molla
Salma El Wardany – Bloomberg
New renewable-energy projects will enable Egypt to accelerate plans to become a major supplier of power and hydrogen to Europe, according to the country’s petroleum minister. Egypt wants to send electricity to Cyprus and Greece through a cable that will run under the Mediterranean. It also aims to export hydrogen, which can be used as a fuel for power stations.
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Mexico’s Pemex risks fines rather than fix violations
Stefanie Eschenbacher and Ana Isabel Martinez – Reuters
Under pressure to increase production, Mexico’s state oil company Pemex has risked fines for violations that cause environmental damage rather than delay output to fix the underlying issues, according to two senior company sources. The decision by Pemex to opt for fines instead of repairs represents a major blow to the oil regulator’s struggle to rein in the company, an energy behemoth closely tied to the government. Over the past year, the regulator has fined Pemex four times for not complying with its own development plans for two top fields – Ixachi in Veracruz and Quesqui in Tabasco – that resulted in huge amounts of natural gas being burnt off.
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US Oil Refineries Find Paying Fines Can Be Cheaper Than Cleaning Up; Many facilities dodge expensive upgrades and emit outsize quantities of greenhouse gases.
Ilena Peng – Bloomberg
Nestled between the snow-capped peaks of the Wasatch Mountains and the briny waters of the Great Salt Lake, I-15 in northern Utah leads to some of the most unspoiled areas in the US. But on the way, visitors must pass a gauntlet of five oil refineries that foul the air with carbon dioxide, nitrogen oxide, benzene and other pollutants. While the facilities rank among the smallest processors of crude oil in the country, they spew out more greenhouse gases per barrel than most larger facilities. And because they’re located high in the Rockies, the effect of their emissions is supercharged, making the Salt Lake refineries a hazard to both public health and the climate.
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Institutions

JPMorgan Gives All New Parents 16 Weeks of Leave as Perks Boosted; Bank also is offering more sick days, bereavement time; Unequal parental leave was topic of past $5 million settlement
Jeff Green – Bloomberg
JPMorgan Chase & Co. made sweeping improvements to time off for bereavement, sick days, and caring for ill family members – including for the first time giving 16 weeks of leave to either parent for the birth or adoption of a child, regardless of which is the primary caregiver. The bank will increase sick days for full-time employees to 10 days from six and bump bereavement to 20 days from five for the loss of a spouse, domestic partner or child, or in the case of a stillbirth or miscarriage, according to a copy of an internal memo sent to employees Thursday.
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Ex-Deutsche Bank Trader Sues Bank for Malicious Prosecution; US appeals court cleared Connolly of wire fraud in Libor case; Suit claims bank sought to blame traders in rate-fix case
Chris Dolmetsch – Bloomberg
A former Deutsche Bank AG trader cleared of charges that he rigged the Libor benchmark rate has sued the bank for malicious prosecution, saying the company made false and misleading statements to get him prosecuted in the US. The trader, Matthew Connolly, and a colleague, Gavin Black, were found guilty in New York of wire fraud for rigging Deutsche Bank’s Libor submission in 2018. But an appeals court cleared them in January, saying prosecutors failed to prove the two men influenced the bank into making false or misleading submissions.
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Masayoshi Son Now Owes SoftBank $4.7 Billion on Side Deals; No repayment date set on billionaire’s loans from SoftBank; CEO’s compensation plan backfiring amid plunging valuations
Min Jeong Lee, Pei Yi Mak, and Takahiko Hyuga – Bloomberg
Masayoshi Son is now personally on the hook for about $4.7 billion on side deals he set up at SoftBank Group Corp. to boost his compensation, after mounting losses in the company’s tech portfolio wiped out the value of his interest in the second Vision Fund. Over the years, the Japanese billionaire’s controversial personal stakes in SoftBank’s investments drew fire from investors, who pointed to the mix of personal and company interests as a corporate governance concern. Son — who holds a more than 30% stake in SoftBank — has denied there was a conflict of interest and said it was remuneration for his investment expertise, in lieu of investment fees.
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How One Deal Divided Asset Management Giant Brookfield and the Firm It Saved; Brookfield’s Shah left board amid search for a replacement; AEL shares fell as much as 33% on the news of his exit
Scott Deveau and Max Reyes – Bloomberg
Those dialed in for American Equity Investment Life Holding Co.’s earnings call last week all seemed to know about the abrupt resignation of a director representing the company’s largest investor — all except Chief Executive Officer Anant Bhalla, that is. Minutes beforehand, Brookfield Asset Management Inc. — which owns about 18.5% of AEL — said Chief Investment Officer Sachin Shah was resigning from the insurer’s board, citing a fundamental change in the strategic direction of the firm, and that it may sell its shares. Analysts on the conference call pressed Bhalla for details as they watched a third of AEL’s market value disappear.
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China’s Money Markets Ease as PBOC Acts to Avoid Liquidity Shock; Injection of short-term cash this week is most since October; PBOC would refrain from sizable monetary easing: Guosheng Sec.
Bloomberg
China’s money markets eased from recent highs, after the central bank provided liquidity to stem a bond selloff that threatened to spark panic among retail investors. The overnight interbank funding cost is poised for its biggest weekly drop in six weeks, while yields on the one-year government bond fell by the most since August. The People’s Bank of China added short-term liquidity for a second day on Friday.
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Two Favorites Tipped for PBOC’s Top Post as Women Also Make List; Beijing’s acting mayor, securities watchdog are top contenders; Underdogs include banker veteran and two rising female stars
Bloomberg
The People’s Bank of China is likely to get a new leader next year, with speculation centering on two clear favorites to succeed current Governor Yi Gang or possibly the first woman to run the central bank in decades. The acting mayor of Beijing, Yin Yong, and the country’s top securities watchdog, Yi Huiman, got five votes each in a survey of economists and political analysts by Bloomberg News this month.
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Credit Suisse’s Swiss investment bank to be spared in overhaul
Reuters
The Swiss arm of Credit Suisse’s investment bank will be largely unaffected by the restructuring plan the bank announced last month, said Jens Haas, head of investment banking Switzerland. “We will retain our full footprint here in Switzerland, so from a client perspective and a market perspective, certainly nothing will change,” he told Swiss newspaper L’Agefi.
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Deutsche Bank CEO Slams ‘Punitive’ Rules on Leveraged Loans; Sewing says rules make it difficult for EU banks to compete; ECB has warned banks don’t grasp risks from leveraged loans
Steven Arons – Bloomberg
Deutsche Bank AG Chief Executive Officer Christian Sewing stepped up criticism of the tough stance taken by European regulators on leveraged lending, arguing that it’s putting the region’s banks at a disadvantage to US competitors.
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JPMorgan Trying to Expand Minority Small-Business Lending
David Benoit – The Wall Street Journal
JPMorgan Chase & Co. is launching a national program to try to get more loans into the hands of minority small-businesses owners and close a persistent racial gap in financing. The country’s biggest bank has been quietly piloting a special-purpose credit program this year here and in Dallas, Detroit and Miami that allows it to offer more loans to business owners who might have otherwise been rejected.
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Pension Funds Struggle to Gauge Crypto Exposure; Following the FTX bankruptcy, some of the biggest U.S. public pensions say they are indirectly exposed to digital currencies
Chris Cumming and Rod James – The Wall Street Journal
Public pensions in the U.S. have mostly shied away from digital assets, a sector whose Wild West ethos and extreme volatility are widely seen as bad fits for institutional investors that aim to protect retiree savings. Yet many pensions have millions of dollars in exposure to the cryptocurrency asset class through investments in venture-capital funds that backed crypto companies.
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Wellness Exchange

You Don’t Have to Be Vegan to Help Save the Planet; Looking for foods that nutritionists and climate scientists agree on? From cutting back on beef to eating more plants, here are tips for a diet that’s better for the body and the environment.
Zahra Hirji – Bloomberg
Dietician Dawn Blatner struggled for years with being a vegetarian, suffering the occasional craving for a hot dog at a baseball game or some turkey at Thanksgiving. “I always thought I was just a lazy vegetarian,” she says. “Then I saw the word ‘flexitarian.'” That was in 2003; Blatner has described herself as a flexitarian ever since. “The idea of waking in the morning with the intention to eat more plants is what a flexitarian is about,” she says. But crucially, there’s “no cutting out food groups.”
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China’s Covid Cases Near Record High in Test for Looser Rules; National tally increases as outbreaks persist in key cities; China will build more hospitals in sign of more cases to come
Bloomberg
China’s virus cases rose again, climbing to near their highest of the pandemic, with authorities signaling they’re preparing to face even more infections as the country eases some of its Covid Zero rules. The country reported 24,028 infections for Thursday, holding at the highest since April when Shanghai’s outbreak spurred a surge in the national case tally. The southern manufacturing hub of Guangzhou remains a hotspot, with more than 9,000 new cases. China’s most populous city, Chongqing, said it found 4,631 new infections.
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Top five Covid symptoms after vaccination and the signs you might have it; Covid booster jabs still strongly advised for those eligible, say experts, as flu season arrives
Thomas Kingsley – Independent
Covid-19 cases in the UK are currently at a relatively low level as flu cases surge but experts continue to preach caution against complacency towards the disease as the weather slowly but surely turns colder. Older people in particular are under threat of reinfection, increasing calls from public health experts for booster jab takeups as winter approaches and the number of new immuno-evasive subvariants increase. “I think we should take this as a warning that infection numbers are likely to start increasing soon, where they haven’t already done so,” said Dr Simon Clarke of the University of Reading.
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Will Covid Boosters Prevent Another Wave? Scientists Aren’t So Sure; The shots may help older, pregnant and immunocompromised Americans dodge serious illness or death. But the doses are not likely to prevent infections in any group, recent studies suggest.
Apoorva Mandavilli – The New York Times
As winter looms and Americans increasingly gather indoors without masks or social distancing, a medley of new coronavirus variants is seeding a rise in cases and hospitalizations in counties across the nation. The Biden administration’s plan for preventing a national surge depends heavily on persuading Americans to get updated booster shots of the Pfizer-BioNTech and Moderna vaccines. Now some scientists are raising doubts about this strategy.
/jlne.ws/3ElnOrc

Regions

Taiwan Financial Firms Cut China Exposure by 20% to Record Low
Cindy Wang, Betty Hou, and Chien-Hua Wan – Bloomberg
Taiwan’s financial institutions reduced their China exposure to a record low amid economic and political uncertainties, according to its top financial regulator. Total exposure to China at Taiwanese banks, insurers and securities firms have dropped by 20% from a year earlier to about NT$1.35 trillion ($43.3 billion) at the end of September, according to Taiwan’s Financial Supervisory Commission.
/jlne.ws/3OjJmcg

Vietnam PM Asks Banks to Weigh Increasing Loan Limits for Growth
Nguyen Dieu Tu Uyen and Jamille Tran – Bloomberg
Vietnam’s Prime Minister Pham Minh Chinh asked banks to weigh increasing loan limits as the nation grapples with a credit crunch that risks economic growth. Chinh said “reasonably increasing credit limits” would boost lending and help with macro economic stability and growth, according to a posting on the government website.
/jlne.ws/3V4hCe0

Coffee Sellers in Brazil Challenge Market View of Bumper Crop; Biggest arabica cooperative expects third year of weak output; Arabica futures are at the lowest in 16 months on slack demand
Dayanne Martins Sousa and Marvin G Perez – Bloomberg
Coffee sellers from the world’s top supplier are pessimistic about their bean supply, disputing market expectations that Brazil will enjoy a bumper crop in the next year. Cooxupe, the country’s biggest arabica coffee cooperative, expects next year’s harvest to be as weak as the one gathered this year, president Carlos Augusto Rodrigues de Melo said in an interview. That would mean three straight years of disappointing production.
/jlne.ws/3tHxUxW

A Quarter of Americans at Risk of Winter Power Blackouts, Grid Emergencies; Grids from New England to Texas could see supply shortages; Natural gas, coal and fuel oil supplies are all strained
Naureen S Malik – Bloomberg
Large swaths of North America may face blackouts and other energy emergencies during bouts of extreme cold this winter as coal and natural gas supplies tighten, according to a US regulatory agency. The electric grids at most risk of supply shortfalls are in Texas, the central US system stretching from the Great Lakes to Louisiana, New England and the Carolinas, the North American Electric Reliability Council said in its seasonal assessment Thursday. Severe weather may stress grids by causing demand to soar while supplies of natural gas, coal and back-up fuel oil are all tight, leaving little room for error, according to the report.
/jlne.ws/3Aq0Aze

Miscellaneous

As FTX crumbled, Sam Bankman-Fried’s Bahamas penthouse was put up for sale. The listing was a fake
Leo Schwartz – Fortune
After an apparent listing for Sam Bankman-Fried’s luxury penthouse in the Bahamas went viral earlier this week, Fortune has learned that the listing was a fake, with the real estate firm describing it as a “web malfunction.” The page has since been taken down, with the URL now showing “page not found.”
/jlne.ws/3EIcua1

FTX shrink says executives were ‘undersexed,’ denies rampant amphetamine use
Thomas Barrabi – NY Post
The in-house performance coach at FTX claimed Tuesday the doomed crypto firm’s headquarters in the Bahamas was a “pretty tame place” – despite rampant speculation about its executives’ sex lives and alleged substance use. Online gossip alleging the group lived in a “polycule” – or network of polyamorous relationships – surged after CoinDesk reported the executives “are, or used to be, paired up in romantic relationships with each other.”
/jlne.ws/3hRr3PF

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