FTX’s Collapse Validates Gary Gensler’s Crypto Skepticism

Nov 30, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

It is a good day and a bad day for the SEC’s Gary Gensler. On the one hand, he is being lauded by Bloomberg for his crypto skepticism in the light of the FTX black hole. On the other hand, Virtu decided it can’t wait to see his new market structure proposals and decided to sue the SEC as a result. Gary Gensler must be the new Jerry Seinfeld, where everything evens out.

If you would like to see the Virtu complaint, it can be found HERE.

Correction: The first paragraph in yesterday’s commentary in this space about Terry Duffy’s “slip” on Fox News was needlessly convoluted. We have edited the paragraph in the hopes of bringing more clarity. It now reads: Crypto native publication Decrypt published a story on November 27 about a slip of the tongue made by CME Group’s Terry Duffy while he was being interviewed by FOX News’ Tucker Carlson. Duffy had been prescient about Sam Bankman-Fried and FTX, calling SBF a fraud to his face at a Boca meeting and testifying to Congress that FTX could lose 85% of its value in a single day. On Carlson’s show, Duffy appeared to admit that he bribes or bribed the CFTC amidst a change in his train of thought. The title of the Decrypt story is “CME Head Appears To Say He Bribed CTFC Official; Terry Duffy made the slip while speaking to Tucker Carlson on Fox News.”

You can read the whole comment in the Newsletter on our website here.

Barchart and Illinois Tech (IIT) are hosting an event, Shaping the Future of FinTech Talent, from 4:00-6:30 pm in Chicago, today, November 30. They have a great panel lined up with Matt Dixon (Risk.net’s 2022 Quant of the Year), Anthony Termini (SVP Business Development at Morningstar), Matt Haraburda (President at XR Trading), Jim Boudreault (Global Head of Data Science at CME Group) and Alexandra Oleksiuk (Sr. Business Development Manager at World Business Chicago) to discuss how FinTech companies can attract and retain employees who will help their companies stay ahead of the technology curve. The location is the Chicago-Kent College of Law Auditorium, 565 W. Adams Street, Suite 265, Chicago, IL, 60661. Register HERE

The Financial Times has a Special Report, “The Future of Energy.” The description is: Europe’s efforts to wean itself off Russian oil and gas are being slowed by constrained supplies of renewable energy components and a lack of storage technology, but modular nuclear reactors and electricity grid balancing offer a way forward.

Rising prices and supply chain risks threaten Europe’s renewable aims; Costly components make it harder for the industry to hit climate targets and wean itself off Russian energy

‘The next big thing in nuclear will be very small’; Modular reactors can deliver power with lower costs and construction risks than large, conventional plants

‘No going back’ to oil and gas despite new UK exploration licences; Granting permission for more North Sea production is unlikely to lower prices or reverse overall decline

Now is the time for all consumers to come to the aid of their grid; Changing the pattern of electricity use in homes can help manage demand and meet climate targets

Developing countries fight for their right to fuel growth; Poorer nations are refusing to sacrifice natural energy assets to help rich polluters meet emissions targets

New energy storage technologies hold key to renewable transition; From pumping water uphill to heating thermal batteries, companies are trying new ways to keep power on tap

ICE is launching a futures contract on January 16, 2023 that is going to really stink. Yes, I mean hold-your-nose kind of stink. ICE is launching ammonia futures on January 16, 2023, subject to regulatory approval.

Our friends at IncubEx want people to know that next week Trayport will be hosting a webinar on ‘The Future of The Global Carbon Credit Economy’. It will be moderated by Jim Kharouf from IncubEx. He will be joined by panelists James Tansey, founder and CEO of Klimat X, and Daniel Scarbrough, president and COO of IncubEx. The experts will be discussing the key aspects of the environmental market sector. The webinar will be live on December 7th, at 3:30pm GMT | 4:30 p.m. CET | 9:30 a.m. CDT. You can register HERE.

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


MWE SHORT: Jay Feuerstein – Breaking Down Managed Futures

In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Jay Feuerstein, managing director at Budo Group, talks about managed futures and their role within finance. Feuerstein says the best time for managed futures was during the ’87 and ’08 market crashes. Managed futures can be volatile when interest rates fluctuate, and since the Fed is slowly starting to raise rates, it could be a good sign for an industry segment which has struggled so far in 2017.

Watch the video »


A Machiavellian machine raises ethical questions about AI; Researchers have developed a bot capable of the deceptions required to prosper in an online diplomacy game
Anjana Ahuja – Financial Times
I remember my daughter’s first fib. She stood with her back to the living room wall, crayon in hand, trying to conceal an expansive scrawl. Her explanation was as creative as her handiwork: “Daddy do it.” Deception is a milestone in cognitive development because it requires an understanding of how others might think and act. That ability is on display, to a limited extent, in Cicero, an artificial intelligence system designed to play Diplomacy, a game of wartime strategy in which players negotiate, make alliances, bluff, withhold information, and sometimes mislead. Cicero, developed by Meta and named after the famed Roman orator, pitted its artificial wits against human players online – and outperformed most of them.

******Why do I think this was developed from a spoofing algo?~JJL


Trading Technologies Extends TT Premium Order Types Market Coverage to Include Four Major APAC Exchanges; Sophisticated algorithmic execution strategies available for products on SGX, JPX, ASX and HKEX
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, announced the addition of four major Asia-Pacific (APAC) exchanges to marketplaces supported by TT Premium Order Types, its new suite of sophisticated algorithmic execution strategies. Fully integrated with the TT platform, the highly advanced synthetic order types now support trading of products listed on Singapore Exchange (SGX Group). In addition, support for products traded on Australian Securities Exchange (ASX), Hong Kong Exchanges and Clearing Limited (HKEX) and Japan Exchange Group (JPX) will be available before year end.

***** TT timing this announcement for FIA Asia.~JJL


Hubris and the risks of over-mighty tech bosses; How can investors tell when a lack of accountability becomes a problem?
Simon Edelsten – Financial Times
All superheroes have their flaws. Achilles has his heel. Ironman his heart. Superman kryptonite. For today’s corporate crusaders it is hubris. History is littered with tales of the tragic downfall of entrepreneurs who let success breed overconfidence. This year has seen rather a lot of hubris punished. Take the demise of Sam Bankman-Fried’s cryptocurrency platform, FTX; the chaos descending on Twitter following Elon Musk’s takeover; or Facebook’s Meta-morphosis.

*****This is the Boomer in me coming out, but the whole “I don’t have time to get a proper wardrobe and like to just wear baggy cargo shorts and a T-shirt” is a big red flag for me.~JJL


The World Cup Is on, and Traders Are Watching; S&P 500 and corporate-bond volumes are already low because traders turn their attention to the soccer game.
Sebastian Boyd – Bloomberg
During the 2010 World Cup in South Africa, US equity trading volume fell 43% when the US was playing, according to a study by two European Central Bank economists. That’s not the most in the world – in Chile it fell more than 99% – but there’s a good chance that will be surpassed this afternoon as the US faces a crunch match against Iran. The winner is likely to qualify for the final 16 of the competition. That’s a feat the US achieved in 2010 and 2014, though its best World Cup performance was in 1930, where it reached the semi-final of the first FIFA World Cup in Uruguay before losing 6-1 to Argentina in a violent clash.

****** Golf can be so mesmerizing. Wrong sport?~JJL


Protect Our Democracy. Support Local News.
Lydia Polgreen – The New York Times
Like a lot of folks, I have been thinking quite a bit lately about how to shore up our democracy. We voted in November, and that seems to have gone pretty well. Election deniers and conspiracy-mongers running in swing states lost. Common-sense candidates focused on kitchen table issues won. But after voting, what’s next? In this season of giving I have a modest suggestion: Support your local news organization.

***** Protect our democracy any way you can. Supporting news organizations that are giving you a voice and letting you exercise your First Amendment rights is truly important.~JJL


Tuesday’s Top Three
Our top story Tuesday was the Fox News video CME Group chief reacts to Sam Bankman-Fried scandal, in which Tucker Carlson interviewed CME CEO Terry Duffy and Duffy appeared to say he bribed the CFTC. Second was the Decrypt article, CME Head Appears To Say He Bribed CTFC Official. Third was the John Lothian News video Catching Up With Trading Technologies CEO Keith Todd at FIA Expo 2022.


MarketsWiki Stats
27,088 pages; 241,871 edits
MarketsWiki Statistics


Lead Stories

FTX’s Collapse Validates Gary Gensler’s Crypto Skepticism; Sam Bankman-Fried fooled a lot of people-but not the SEC chairman, whose warnings about risk and lack of regulation were well-founded.
Max Chafkin – Bloomberg
If you’re looking to apportion blame for the collapse of FTX, there are quite a few worthy candidates. Start with founder Sam Bankman-Fried, who under the banner of “effective altruism”-a 4chan thread of a moral philosophy-spent lavishly to lure investors onto his crypto trading platform and then, either through greed or incompetence, allowed customer funds to be used, and lost, by a hedge fund he also owned, Alameda Research. (So far, Bankman-Fried has seemed to argue that this was an honest mistake stemming from a failure to keep track of customer funds. In other words: an $8 billion oopsie.) Caroline Ellison-chief executive officer of Alameda and Bankman-Friend’s ex-girlfriend-is another worthy candidate, along with other members of Bankman-Fried’s inner circle.

Virtu Sues SEC to Get More Details on Market-Structure Overhaul
Katherine Doherty and Lydia Beyoud – Bloomberg
Virtu Financial Inc. sued the US Securities and Exchange Commission to get more information about the agency’s plan to write new equity-trading rules. In a Freedom of Information Act lawsuit filed Tuesday, Virtu is seeking to compel the SEC to release details about its rulemaking process and steps it has taken to get feedback from market participants. Virtu filed a FOIA request in June and hasn’t received a full response, the firm said in a statement. “National securities market participants and retail investors deserve information about the rulemaking process, including the sources of information received by the agency and the possibility of bias,” Virtu said in the lawsuit. “Without that information, interested parties will be hamstrung in their ability to comment on the proposed rules, including the agency’s weighing of the risks to investors and the market.”

Cboe Global Markets Finalizes Investor Partners for Cboe Digital Business
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, announced it has completed the syndication of minority equity interests with a group of thirteen firms becoming investor partners in the Cboe Digital business. The investors represent a broad and diverse range of market participants, including leading retail and institutional intermediaries, liquidity providers and brokers, including B2C2, DRW, Galaxy Digital, GSR, Hidden Road, IMC, Interactive Brokers, Jane Street, Jump Crypto, Robinhood, Susquehanna International Group, tastyworks and Virtu Financial

Doesn’t anyone do due diligence any more? Theranos and FTX show a broad failure by investors to ask enough questions before handing over cash
Brooke Masters – Financial Times
It’s been a lousy month for the reputation of professional investing. The collapse of FTX revealed that everyone from racy hedge funds to staid pension and sovereign wealth funds had been throwing money at a cryptocurrency exchange with weaker financial controls than Enron. Elizabeth Holmes was sentenced to 11 years in prison for Theranos, a fraudulent blood-testing scheme that deceived Oracle founder Larry Ellison and media mogul Rupert Murdoch.

FTX’s LedgerX, a Solvent Corner of SBF’s Fallen Empire, Will Put Millions in Bankruptcy Pot; Money could be used to repay creditors to crumbled crypto firm; Funds come from $250 million set aside for CFTC application
Allyson Versprille and Lydia Beyoud – Bloomberg
LedgerX — one of the few corners of Sam Bankman-Fried’s crumbled crypto empire that remain solvent — is preparing to make available $175 million for use in FTX’s bankruptcy proceedings, according to people with knowledge of the matter. The money, which could be transferred as soon as Wednesday, comes from a $250 million fund that LedgerX had set aside for a bid to get regulatory approval to clear crypto derivatives trades without intermediaries. The firm, which is known as FTX US Derivatives, withdrew its application with the US Commodity Futures Trading Commission as more than 100 FTX entities filed for bankruptcy on Nov. 11.

Early Alameda Staffers Quit After Battling Sam Bankman-Fried Over Risk, Compliance Concerns; ‘We ended up not really knowing how much money we even had,’ one former employee says
Gregory Zuckerman – The Wall Street Journal
Years before Sam Bankman-Fried’s crypto empire collapsed, a group of employees quit in a power struggle-after becoming concerned about what they say was his cavalier approach to risk, compliance and accounting. The employees worked at his trading firm, Alameda Research, and were some of his earliest colleagues, including Alameda’s co-founder, Tara Mac Aulay. They left in 2018, well before the crypto exchange FTX grew out of Alameda. Both FTX and Alameda are now bankrupt.

SPAC Sponsors Used to Win at Investors’ Expense. Now Both Are Losing; Blank-check vehicles are running out of time to close mergers, costing sponsors dearly. Given that SPACs offer no benefits to most investors either, they may have little reason to stick around.
Jon Sindreu – The Wall Street Journal
Buying stock in a firm going public through a merger with a special-purpose acquisition company is usually a terrible idea. But, in a damning development, SPACs may not be great for those launching them either. So far in 2022, there have been 48 SPAC liquidations, and another 40 are planned for before the end of the year, fresh data by SPAC Research shows. Buyout stars such as Alec Gores and Chamath Palihapitiya have recently said they would return billions to investors. Until recently, liquidations were rare.

ECB says Bitcoin is artificially propped up, shouldn’t be legitimised
Bitcoin is being artificially propped up and should not be legitimised by regulators or financial companies as it heads for “irrelevance”, the European Central Bank said on Wednesday. Bitcoin and other cryptocurrencies have been variously presented as an alternative form of money and a shield from the inflationary policies pursued by major central banks such as the ECB in recent years.

Genesis Creditors Seek Options to Keep Crypto Brokerage Out of Bankruptcy; Various creditor groups have hired restructuring lawyers; Genesis has begun talks with potential investors and creditors
Rachel Butt, Muyao Shen, and Vildana Hajric – Bloomberg
Creditors to embattled crypto brokerage Genesis are organizing with restructuring lawyers and seeking options that would keep the firm out of bankruptcy, according to people with knowledge of the situation. One group of creditors is getting advice from law firm Proskauer Rose, while another group is working with Kirkland & Ellis, said the people, who asked not to be identified because the matter is private. Following FTX’s rapid bankruptcy, the groups are seeking to avoid a similarly chaotic and costly process for Genesis, the people added.

U.S. crypto broker Genesis says it is working to avoid bankruptcy filing
U.S. cryptocurrency brokerage Genesis said it was seeking to avoid bankruptcy after Bloomberg news reported on Tuesday that creditors to the firm are organizing with restructuring lawyers to prevent insolvency. Citing people with knowledge of the situation, the report said law firms Proskauer Rose and Kirkland & Ellis are being consulted by creditor groups, who are seeking to avoid a situation similar to crypto exchange FTX’s rapid descent into bankruptcy.

Bank of England backs strict adoption of global bank capital rules; Central bank to introduce final package of Basel guidelines but delays implementation until 2025
Laura Noonan – Financial Times
The Bank of England has proposed a faithful adoption of the latest global bank capital rules for the UK’s biggest lenders, disappointing banks that were hoping for a lighter touch such as that proposed by the EU. The BoE on Wednesday published its plans to introduce the final package of Basel rules, agreed in the aftermath of the global financial crisis to safeguard against future calamities.

UK watchdog sets out sweeping reform of investment advice; FCA plan to boost returns by giving investors with ‘straightforward needs’ simpler guidance
Laura Noonan and Chris Flood – Financial Times
The UK financial regulator has proposed sweeping changes to democratise investment in financial products, in an effort to help millions of people facing a sharp rise in living costs earn better returns on their savings. The Financial Conduct Authority on Wednesday laid out plans to enable individuals with “straightforward financial needs” to take advice from less-qualified experts, which will be cheaper than that of traditional investment advisers.

Crosstower Acquires Bequant To Help Crypto Industry Reset And Consolidate; “We are stabilizing an industry with incredible promise; regaining trust; and rebuilding the future of finance.”
Rick Steves – Finance Feeds
New York-based crypto trading platform CrossTower has reached an agreement to acquire BEQUANT, a prime brokerage and digital asset exchange in a move expected to strengthen its institutional market presence with 600 professional clients generating over $400 billion of yearly turnover with more than a dozen exchanges connected to its platform.

Russian Crypto Billionaire Dies in Mysterious Chopper Crash
Allison Quinn – Daily Beast
A Russian billionaire has become just the latest cryptocurrency figure to die under bizarre circumstances in recent weeks. Forex Club founder Vyacheslav Taran, the president of the Libertex Group trading platform, was the sole passenger on a Monacair helicopter that crashed near the French town of Villefranche-sur-Mer over the weekend. Taran, 53, had taken off from Lausanne in Switzerland en route to Monaco with an experienced 35-year-old pilot before the aircraft went down. The chopper crashed into a hillside in good weather, local reports said.

‘It just kinda went crazy’: FTX’s lavish spending highlights lack of controls; Sam Bankman-Fried’s crypto group showered employees with perks before collapsing into bankruptcy
Nikou Asgari and Joshua Oliver – Financial Times
When crypto exchange FTX moved its headquarters to the Bahamas from Hong Kong last year, employees discovered that Amazon did not deliver to the island. They quickly found an alternative, striking a private deal with an air carrier to fly their orders from a Miami depot. FTX’s airmail programme, which was described in interviews with former employees, illustrates the lavish perks Sam Bankman-Fried’s crypto exchange bestowed on its staff before it collapsed into bankruptcy this month.

Binance re-enters Japanese crypto market with deal for Sakura; Purchase comes as sector faces heightened scrutiny following collapse of FTX
Nikou Asgari and Scott Chipolina and Kana Inagaki – Financial Times
Binance has made a fresh bid to enter Japan a year after it was warned by regulators about its unauthorised activities, with a deal to buy Japanese crypto company Sakura Exchange BitCoin. The world’s largest crypto exchange, which is owned by entrepreneur Changpeng Zhao, is to return to the Japanese market by purchasing an entity licensed with the country’s Financial Services Agency. The terms of the transaction were not disclosed.

Sam Bankman-Fried Set to Face a Public Still Seeking Answers on FTX’s Collapse
Hannah Miller – Bloomberg
The collapse of FTX was one of the crypto industry’s biggest and most stunning failures. It transformed Sam Bankman-Fried from a billionaire savant and industry savior to a corporate villain virtually overnight, even though major questions remain about what exactly happened. Some may be answered if the former chief executive officer goes through with a planned speaking engagement at the New York Times DealBook Summit on Wednesday. Here are key issues that have yet to be sufficiently explained:

The FTX fiasco doesn’t make bitcoin untouchable and crypto doomsayers are just ‘people throwing gasoline,’ Fundstrat’s Tom Lee says
Zahra Tayeb – Business Insider
There’s still hope for the crypto industry despite FTX’s implosion, and bitcoin continues to make sense for some investors, according to Fundstrat’s Tom Lee. In a Friday interview with CNBC, Lee likened this year’s bear run in virtual currencies to the 2017-2018 sell-off from which they rebounded in the following years. He stayed bullish on a wobbly crypto sector for two reasons – the FTX blowout is potentially beneficial because it flushes out bad actors, while history shows bitcoin has delivered good returns, according to him.

EU’s MiCA Crypto Law Would Have Stopped FTX Malpractice, Officials Say
Jack Schickler – CoinDesk
Upcoming European Union rules known as the Markets in Crypto Assets regulation (MiCA) would have stopped FTX-style mismanagement, officials said on Wednesday – despite lawmaker skepticism over whether the new rules are effective. The crypto exchange’s collapse has led to calls to toughen or bring forward the rules, which require crypto companies to register with the authorities and meet governance standards common in other kinds of regulated financial firms.

FTX Direct Clearing Plan Was Nowhere Close to Being Approved, CFTC Chief Says
Jack Schickler – CoinDesk
The U.S. Commodity Futures Trading Commission was nowhere close to making a decision on a controversial FTX plan to streamline financial market structure rules, which were proposed before the crypto exchange went bust, CFTC Chairman Rostin Behnam said Monday. In March, FTX’s U.S. arm proposed to merge traditionally separate roles of trading and clearing in directly settling certain crypto derivatives contracts, but the empire of then-CEO Sam Bankman-Fried now lies in tatters after CoinDesk revealed an unusually tight relationship between FTX and its trading arm, Alameda Research.

Banks Stuck With $42 Billion Debt Seize Chance to Offload It; Nielsen, Unilever tea among debt deals on lenders’ books; Banks want to get rid of hung debt before next financial year
Jill R Shah and Claire Ruckin – Bloomberg
Banks in the US and Europe with around $42 billion of buyout debt stuck on their balance sheets are making the most of their last chance to get rid of it this year. Stabilization in the leveraged loan and high yield bond markets has led to an opening for deals — including for bonds and loans tied to the buyout of TV ratings business Nielsen Holdings Plc — as banks try to reduce debt on their balance sheets before the holidays. Offloading the so-called hung debt, even at steep discounts, confines losses to this financial year while also appeasing risk departments and regulators.

BlockFi to Seek $680M From FTX’s Alameda
Bloomberg’s Sonali Basak joins Caroline Hyde to discuss why BlockFi is looking to collect money from Sam Bankman-Fried’s empire, including from Alameda Research.

India’s Central Bank to Launch Retail Pilot of Digital Rupee; Reserve Bank of India is seeking to offer citizens an alternative to risky virtual currencies
Shefali Anand – The Wall Street Journal
India’s central bank will launch its first pilot of a digital rupee for individual users Thursday, putting it ahead of many major economies in the journey toward a sovereign virtual currency. The Reserve Bank of India has said a digital rupee could provide Indians a safe alternative to risky private digital currencies.

DTCC shares Findings From Its Pilot With The Digital Dollar Project, Identifying Requirements For Supporting A U.S. CBDC In Securities Settlement; New whitepaper outlines wholesale CBDC settlement network connectivity and design choices, potential business outcomes, and further opportunities around CBDC settlement
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today published its latest whitepaper, “Exploring Post-Trade Security Settlement with a U.S. Central Bank Digital Currency,” in collaboration with The Digital Dollar Project (DDP) and support from Accenture. The paper outlines key findings from the pilot (formerly known as Project Lithium), the first private sector initiative to explore how tokenized securities and a wholesale Central Bank Digital Currency (CBDC) could operate within the U.S. settlement infrastructure leveraging distributed ledger technology (DLT). The pilot included participation from leading market participant firms including Bank of America, Citi, Nomura, Northern Trust, State Street, Virtu Financial and Wells Fargo.

Buy-side want better access to varied ESG data, SIX Group research finds
Brandon Russell – IFA
Global asset and wealth managers cite insufficient data and technology as undermining their goal to implement ESG into their investment processes, according to a survey conducted by SIX Group. In a recent report, 41% of the 143 global buy-side C-suite executives surveyed agreed that the development of ESG-related capabilities/offerings for clients was either important or critical to the way that they ran their business. This contrasted with 15% who do not recognize it as an important area.

Ukraine Invasion

Brussels proposes plan to confiscate frozen Russian assets
John Chalmers – Reuters
The European Commission on Wednesday proposed confiscating Russian assets that have been frozen to punish Moscow for the invasion of Ukraine, exploring legal options with the EU’s partners to compensate Kyiv for damage to the country.

Why has Europe struggled to agree on an energy price cap? EU divisions over how to tame high gas and electricity costs caused by Russian export cuts have yet to be resolved
Alice Hancock and Sam Fleming and David Sheppard – Financial Times
The EU’s goal since the outbreak of war in Ukraine has been to rapidly reduce its reliance on Russian fossil fuels while keeping a lid on prices, but the results of its endeavours have been decidedly mixed.

EU Is Hooked on Russia LNG and Paying Billions to Keep It Coming; Europe’s costs to import the fuel have soared to a record; Liquefied gas is unlikely to face region-wide ban, unlike oil
Elena Mazneva and Anna Shiryaevskaya – Bloomberg
The European Union has slashed its dependence on Russian energy this year, banning coal imports and readying an oil embargo too. But one product is booming, and is unlikely to face an EU boycott anytime soon. Liquefied natural gas imports from Russia are up about 40% in a year as buyers scramble to replace dwindling piped flows. It’s a bitter pill for many across the bloc, which has slapped heavy sanctions on the Kremlin to starve it of funds fueling the war in Ukraine. The EU spent a record €12.5 billion ($13 billion) on Russian LNG from January to September — five times more than a year earlier.

Top London Properties Owned By Russian Oligarchs Are Frozen in Time; The sorry state of Libyan-owned buildings in the UK capital may be a sign of things to come for sanctioned Russians.
Jack Sidders – Bloomberg
A thick layer of dust coats the windows of Jardine House in the City of London’s eastern reaches, punctuated by lewd graffiti. The handwritten sign taped to the door says security’s on patrol around the empty building. This once-buzzing office block is owned by Libyan Investment Authority, but its dilapidated state is a warning to wealthy Russians. As Britain freezes the assets of hundreds of Vladimir Putin’s compatriots, their own prime London real estate might be headed for a similar fate – and possibly falling values.

Ukraine’s Power Shortages Force Millions of Refugees Into Lengthier Exile; Kyiv’s call to its diaspora to stay abroad is forcing many to upend their lives again and turn their temporary flight into a permanent move
Bojan Pancevski – The Wall Street Journal
Russia’s attacks on Ukraine’s civilian infrastructure are forcing millions of Ukrainian refugees who intended to return home to stay put, prolonging their ordeal and straining Europe’s ability to absorb one of the biggest flows of migrants in decades. Moscow’s repeated strikes on power stations and heating equipment have caused rolling blackouts in Ukraine and deprived millions across the country of power, heating and running water amid subzero temperature. As it struggles to keep the lights on, Kyiv is now urging Ukrainian refugees to stay where they are for now.

Exchanges, OTC and Clearing

Global Derivatives Awards 2022 | European Derivatives Exchange of the Year: Eurex
European Derivatives Exchange of the Year: Eurex
Wave after wave of volatility has battered markets over the last year. Soaring inflation, a shifting rate environment and the return of conflict in Europe. But throughout huge price swings, the Eurex platforms proved a pillar of stability for financial markets. Excelling in terms of scale, integrity and innovation – the firm was a deserved winner of European Derivatives Exchange of the Year.

BME brings together eight Spanish companies with twenty European investors in Geneva starting tomorrow
On 1 and 2 December BME will bring together eight Spanish listed companies with European investors at the fourteenth edition of the Geneva European Midcap Event, in Geneva. The event aims to bring medium-sized companies, i.e. those with a market capitalization of between 1 and 3 billion euros, into contact with European institutional investors, mainly Swiss and French. In this edition, the Spanish listed companies attending are Acerinox, Ebro Foods, Global Dominion, Grenergy, Indra, Prosegur, Solaria and Viscofan. These companies represent such diverse sectors as renewable energy, technology, industry, engineering and food, whose combined market value reaches 15 billion euros.

Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of Tuesday Weekly Options and Thursday Weekly Options on Certain Foreign Exchange (FX) Futures Contracts
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc.’s (“CME”) Tuesday Weekly Options and Thursday Weekly Options on Certain Foreign Exchange (FX) Futures Contracts (the “Contracts”) on trade date Monday, December 5, 2022 (see SER-9088 published November 9, 2022), please note in Appendix B of CME Submission No. 22-440 the corresponding aggregation allocations (Rule 559.D.), single month and all-month accountability levels (Rule 560), and reportable levels (Rule 561) for the new contracts.

Accountability Levels and Large Trader Reporting Requirements in Connection with the Initial Listing of the RepoFunds Rate (Germany) Futures, RepoFunds Rate (Germany) – Three-Month Single Contract Basis Spread Futures, RepoFunds Rate (Italy) Futures and RepoFunds Rate (Italy) – Three-Month Single Contract Basis Spread Futures Contracts
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc.’s (“CME”) RepoFunds Rate (Germany) Futures, RepoFunds Rate (Germany) – Three-Month Single Contract Basis Spread Futures, RepoFunds Rate (Italy) Futures and RepoFunds Rate (Italy) – Three-Month Single Contract Basis Spread Futures Contracts (the “Contracts”) on trade date Monday, December 5, 2022 (see SER-9090 published November 9, 2022), please note below and in Appendix E of CME Submission No. 22-463 the corresponding aggregation allocations (Rule 559.D.), single month and all-month accountability levels (Rule 560), and reportable levels (Rule 561) for the new contracts.

Disciplinary Decision – Offer of Settlement HSBCSecurities (USA) Inc.
On July 28, 2021, following an investigation conducted by its Regulatory Division, Bourse de Montréal Inc. (the “Bourse”) filed a complaint against HSBC Securities (USA) Inc. (“HSBC”), a foreign approved participant of the Bourse.


Trading Technologies extends coverage of its suite of algorithmic execution strategies to include four major APAC exchanges; The synthetic order types now support products listed on Singapore Exchange, with plans to include products traded on Australian Securities Exchange, Hong Kong Exchanges and Clearing and Japan Exchange Group by year end.
Wesley Bray – The Trade
Trading software and SaaS provider Trading Technologies (TT) has added four major APAC exchanges to marketplaces supported by its suite of algorithmic execution strategies, TT Premium Order Types. Fully integrated with the TT platform, the synthetic order types now support trading of products listed on Singapore Exchange (SGX Group).

High-Speed Trader Virtu Sues SEC
Alexander Osipovich – The Wall Street Journal
One of the biggest electronic trading firms is suing the Securities and Exchange Commission over the agency’s planned overhaul of the plumbing of the U.S. stock market-even though the SEC hasn’t released the actual overhaul yet. Virtu Financial on Tuesday filed a lawsuit against the SEC to enforce a months-old Freedom of Information Act request seeking information on whom the agency is consulting about the planned regulatory changes. In its suit, Virtu said it had not received “a single responsive document” from the SEC in response to its request.

BlockFi Says It Is Different From FTX, Affirms Efforts to Return Customer Funds; Cryptocurrency lender was shocked by allegations of systemic failures at FTX, lawyer says in bankruptcy court
Jonathan Randles – The Wall Street Journal
BlockFi Inc. told a U.S. bankruptcy court on Tuesday it was blindsided by cryptocurrency exchange FTX’s rapid demise and would work to repay creditors and allow customers access to their digital wallets as soon as possible. Jersey City, N.J.-based BlockFi, which secured a rescue loan from FTX in June to shore up its liquidity, reviewed unaudited FTX financial reports as part of due diligence it performed at the time of the transactions, said Joshua Sussberg, a lawyer for BlockFi, during its debut hearing in the U.S. Bankruptcy Court in Trenton, N.J. BlockFi filed for chapter 11 on Monday after the loan fell apart in the wake of FTX’s collapse earlier in November.

Sam Bankman-Fried says he isn’t sure what happened to his $100 million stake in Twitter, shortly after Elon Musk claimed the crypto mogul didn’t have any shares
Grace Dean – Business Insider
Sam Bankman-Fried, the co-founder and former CEO of collapsed crypto exchange FTX, says he isn’t sure what happened to his $100 million stake in Twitter. “I believe that that it was intended for Alameda to rollover at least $20 million or more,” Bankman-Fried told Axios on Monday, referring to Alameda Research, the trading firm he also co-founded. “I don’t know for sure whether that ultimately happened.”

Telstra Taps Katy Greenfield to Lead Customer Solutions for the Americas; Experienced technology operations and sales leader to drive Telstra’s development of market-focused network connectivity technologies and services
Telstra has named Katy Greenfield as Vice President of Customer Solutions for the Americas. She will lead a specialized team working directly with enterprises across the region to develop customized network connectivity products and services. “Organizations already have enough challenges managing their business, customers and employees,” said Greenfield. “Network infrastructure decisions shouldn’t be added to that list. What drew me to Telstra was its commitment as a service provider to identifying and deploying the right solution for a customer, whether it involves servicing enterprises at the edge, enabling international expansion plans or helping companies effectively scale for fluctuations in user bandwidth.”

Venture capitalists flock to blockchain firms in third quarter – Pitchbook
Medha Singh – Reuters
Decentralized finance (DeFi) and Web3 were the primary targets of early-stage startup funding from some of the top private investors in the third quarter, research firm Pitchbook said on Tuesday, even as overall venture capital investments declined. Web3 – a term used to describe a potential next phase of the internet – firms that were focused on decentralized software projects as well as blockchain-based products and services drew the most capital with $879 million invested across 24 deals during the quarter, Pitchbook’s Emerging Tech Indicator report showed.


Cybersecurity Stocks Drop as CrowdStrike Warns Headwinds Are Growing; Zscaler, Sentinel; One among stocks sinking in extended trading; CrowdStrike warned of ‘increased macroeconomic headwinds’
Jeran Wittenstein – Bloomberg
A disappointing revenue forecast from CrowdStrike that the cybersecurity company blamed on “increased macroeconomic headwinds” sent the shares of peers lower in postmarket trading. Zscaler Inc. and SentinelOne Inc. fell more than 5% on Tuesday after US markets closed. Palo Alto Networks Inc., Fortinet Inc. and Cloudflare Inc. dropped more than 3%.

South Dakota Bans TikTok From State-Owned Devices Over Security
Alex Barinka – Bloomberg
TikTok is now banned on government employee devices in South Dakota because the governor believes the social media app’s ownership by a Chinese company poses a national security threat. The state’s employees and contractors are no longer allowed to download the app or access TikTok via the web, according to an executive order signed Tuesday by South Dakota Governor Kristi Noem.

Sam Bankman-Fried Says FTX Hacker May Be a Former Employee
Kate Irwin – Decrypt
Sam Bankman-Fried is again trying to clear the air. In an interview with Tiffany Fong published Tuesday, the disgraced FTX founder and former CEO explained why FTX prioritized Bahamian withdrawals-and also said he’s narrowed down who might be behind that shady $650 million “hack” the night of the Chapter 11 bankruptcy filing. “I’ve narrowed it down to like eight people. I don’t know which one it was,” he said, suggesting that it was either a former FTX employee or someone who installed malware on a former employee’s computer.

Banks warned to tighten phone scam measures; Consumer group spoofs phone numbers of six high street lenders
Rafe Uddin – Financial Times
Banks have been urged to take firm action on spam calls and texts after research found several major high street lenders were yet to implement the UK regulator’s anti-fraud safeguard measures fully. In an exercise, the consumer group Which? said it had spoofed the phone numbers of six major banks and building societies, allowing it to impersonate service providers at HSBC, Lloyds, Santander, TSB, Nationwide and Virgin Money.


Cboe confirms equity partners for new digital venture; Thirteen firms including Jane Street, Robinhood, Susquehanna and Virtu Financial have purchased minority stakes in Cboe Digital.
Laurie McAughtry – The Trade
Cboe Global Markets today announced the completion of its syndicated minority equity interests with respect to its new Cboe Digital business. Thirteen market participants have taken on an equity stake, representing retail and institutional intermediaries, liquidity providers and brokers including B2C2, DRW, Galaxy Digital, GSR, Hidden Road, IMC, Interactive Brokers, Jane Street, Jump Crypto, Robinhood, Susquehanna International Group, tastyworks and Virtu Financial.

Ukraine Considering CBDC That Can Facilitate Crypto Trading
Sandali Handagama – CoinDesk
The National Bank of Ukraine is considering an electronic version of the Ukrainian hryvnia that would be able to facilitate the exchange and issuance of virtual assets, among other uses. The central bank has discussed its vision for an electronic iteration of the country’s sovereign currency, the hryvnia, with representatives of banks, non-banking financial institutions and the crypto market, according to an official press release on Monday. The bank is exploring retail non-cash payments, virtual asset circulation and cross-border transactions as possible applications for a CBDC.

Bitcoin Offshoot Becomes the Latest Victim of FTX’s Contagion
Muyao Shen and Vildana Hajric – Bloomberg
The fallout from the collapse of Sam Bankman-Fried’s FTX crypto empire has spread to a new corner of the digital-asset market. Traders’ focus has turned to the price disparity between Bitcoin and a derivative of the largest cryptocurrency called wrapped Bitcoin, which can be used on the rival Ethereum blockchain. Wrapped Bitcoin is backed 1-to-1 by the token, which is held in custody by the digital-trust firm BitGo. While it normally trades on par with Bitcoin, a “persistent” discount emerged in mid-November, according to blockchain-data firm Kaiko.

FTX owes more than $55,000 to Jimmy Buffett’s Margaritaville beach resort in the Bahamas, bankruptcy filings show
Pete Syme – Business Insider
New documents in FTX’s bankruptcy case show that the company owes over $55,000 to the Bahamas Margaritaville beach resort, founded by the singer Jimmy Buffett. On Monday, lawyers for FTX filed lists of the top 50 creditors for the companies related to Sam Bankman-Fried and his crypto exchange. Margaritaville’s claim for $55,319 makes it the fourth-largest creditor to Alameda Research, the high-risk trading firm that CoinDesk described as having suspiciously close ties to FTX, which led to its collapse.

FTX Received Some Customer Deposits Via Bank Accounts Held by Alameda
Yueqi Yang and Max Reyes – Bloomberg
As everything was collapsing around him, Sam Bankman-Fried talked casually about the way FTX had accessed regulated banks otherwise out of reach to the crypto exchange: Through his trading firm, Alameda Research. The arrangement arose because banks were reluctant to do business with crypto companies including FTX, according to people familiar with the matter. To work around the problem, some FTX customers were instructed to send wire transfers via Alameda, which was allowed to have accounts at Silvergate Capital Corp., a cryptocurrency and fintech bank, the people said.

Sam Bankman-Fried Set to Face a Public Still Seeking Answers on FTX’s Collapse; Former CEO plans to speak at DealBook Summit on Wednesday; Still many unknowns surrounding FTX’s spectacular downfall
Hannah Miller – Bloomberg
The collapse of FTX was one of the crypto industry’s biggest and most stunning failures. It transformed Sam Bankman-Fried from a billionaire savant and industry savior to a corporate villain virtually overnight, even though major questions remain about what exactly happened. Some may be answered if the former chief executive officer goes through with a planned speaking engagement at the New York Times DealBook Summit on Wednesday. Here are key issues that have yet to be sufficiently explained.

FTX Had Plans For Its Robinhood Shares; Also gambling on redemption and customer shrugs.
Matt Levine – Bloomberg
One thing we know is that, as his crypto exchange FTX and his trading firm Alameda Research were spiraling into bankruptcy, Sam Bankman-Fried was desperately shopping all of their assets to potential bidders to try to keep them afloat. We also know what the list of assets looked like, and it was pretty grisly. “Hello, we have $2.2 billion worth of Serum tokens, do you want them,” Bankman-Fried apparently asked potential rescuers, but the correct answer was “absolutely not.” The list was a lot of venture-capital stakes and weird illiquid tokens that FTX had made up, stuff like that.

France, Luxembourg Test CBDC for 100M Euro Bond Issue
Jack Schickler – CoinDesk
France and Luxembourg have used an experimental central bank digital currency (CBDC) to settle a bond worth 100 million euros (US$104 million), the latest in a series of trials in tokenized financial markets. The Venus Initiative “shows how digital assets can be issued, distributed and settled within the eurozone, in a single day” and “confirms that a well-designed CBDC can play a critical role in the development of a safe tokenised financial asset space in Europe,” Nathalie Aufauvre, general director of financial stability and operations at Banc de France, the French central bank, said in a statement.

Morgan Stanley: Crypto Winter Hurt Confidence, but Building Digital Asset Infrastructure Remains Key
Will Canny – CoinDesk
Investor interest in digital assets has changed in the past year as crypto prices declined, Morgan Stanley (MS) said in a research report Wednesday. Retail interest in prices levels and volatility has eased while demand for regulated products for traditional financial clients has increased, it said.

Crypto Services Firm Prime Trust Has Fired CEO Tom Pageler
Danny Nelson, Nikhilesh De – CoinDesk
Crypto fintech Prime Trust’s CEO, Tom Pageler, was fired this week, CoinDesk has learned. Pageler had helmed the Nevada-based crypto services company since January 2021, according to his Linkedin profile. He was previously its president and chief operating officer. It was not immediately clear why Pageler was fired; in a statement Prime Trust said he had “transitioned” but did not share his new role.

BlockFi Says It Is Different From FTX, Affirms Efforts to Return Customer Funds; Cryptocurrency lender was shocked by allegations of systemic failures at FTX, lawyer says in bankruptcy court
Jonathan Randles – The Wall Street Journal
BlockFi Inc. told a U.S. bankruptcy court on Tuesday it was blindsided by cryptocurrency exchange FTX’s rapid demise and would work to repay creditors and allow customers access to their digital wallets as soon as possible. Jersey City, N.J.-based BlockFi, which secured a rescue loan from FTX in June to shore up its liquidity, reviewed unaudited FTX financial reports as part of due diligence it performed at the time of the transactions, said Joshua Sussberg, a lawyer for BlockFi, during its debut hearing in the U.S. Bankruptcy Court in Trenton, N.J. BlockFi filed for chapter 11 on Monday after the loan fell apart in the wake of FTX’s collapse earlier in November.

‘No Cooperation’: How Sam Bankman-Fried Tried to Cling to FTX; Emails and text messages show how lawyers and executives struggled to persuade the 30-year-old entrepreneur to give up control of his collapsing crypto exchange.
David Yaffe-Bellany – The New York Times
When the cryptocurrency exchange FTX filed for bankruptcy on Nov. 11, the company’s founder, Sam Bankman-Fried, announced the news in a contrite message on Twitter. But his attempt to calm the situation belied what had just taken place within the company. As the crisis unfolded, a group of FTX lawyers and executives moved to strip authority from Mr. Bankman-Fried and urged the company’s top leaders to prepare for bankruptcy. For days, Mr. Bankman-Fried ignored their warnings and clung to power, seemingly convinced that he could save the firm, despite mounting evidence to the contrary.

Disgraced FTX founder Sam Bankman-Fried ghosted his legal team over bankruptcy: report
Thomas Barrabi – NY Post
Disgraced FTX founder Sam Bankman-Fried ignored pleas from company attorneys and advisers urging him to file for bankruptcy “for days” before the cryptocurrency platform imploded, according to a report Tuesday. FTX general counsel Ryne Miller was one of several people who begged Bankman-Fried and other executives to relinquish their control of the company, the New York Times reported, citing internal emails and text messages. The mood grew so dire that the FTX attorneys purportedly tried to contact Bankman-Fried’s father, Stanford Law professor Joseph Bankman, to see if he would intervene and speak to his son.

Goldman Sachs launches new digital assets platform; The proprietary multi-asset class digital platform went live with EIB’s second digital bond issuance this week on its private blockchain.
Laurie McAughtry – The Trade
Goldman Sachs this week launched GS DAP, a new digital assets platform built on private permissioned blockchain technology augmented by a smart contract application layer. The tokenisation platform will be used to facilitate the issuance, registration, settlement and custody of digital assets, including but not limited to digital bonds. It is jurisdiction-agnostic and can be leveraged across global capital markets.

NFT Investor Animoca Brands to Start $2B Metaverse Fund: Report
Jamie Crawley – CoinDesk
Non-fungible token (NFT) and gaming investor Animoca Brands plans to set up a fund worth as much as $2 billion to invest in metaverse businesses, the firm’s co-founder Yat Siu said in an interview, Nikkei Asia reported on Wednesday. Siu said that Animoca Brands will unveil the new fund called Animoca Capital with plans to make its first investment next year. The fund’s focus “will be everything on digital property rights,” he added.


Senior House Republican McCaul Vows to Keep Money Flowing to Ukraine; He says he doesn’t expect resistance in his party to succeed; Biden’s $40 billion for Ukraine will pass Congress, he says
Daniel Flatley – Bloomberg
A top congressional Republican said he expects the US will keep money and weapons flowing to Ukraine after the GOP takes control of the House of Representatives in January, playing down concerns that lawmakers in his own party who advocate a halt in funding will succeed.

US Is Sending Ukraine $53 Million to Help Repair Electrical Grid
Courtney McBride – Bloomberg
The US is giving Ukraine more than $53 million to help repair electrical infrastructure damaged by Russian attacks in recent weeks, Secretary of State Antony Blinken announced Tuesday. The package will help Ukraine buy transformers, circuit-breakers, vehicles and other equipment, Blinken announced Tuesday on the margins of a NATO foreign ministers’ gathering in Bucharest. The US wants to get the equipment to Ukraine quickly to restore power as winter sets in.

U.S. Threatens to Start Trade Fight With Mexico Over Genetically Modified Corn Ban; Mexico, the second-biggest market for U.S. corn exports, plans to ban GMO corn by 2024
Kristina Peterson and Anthony Harrup – The Wall Street Journal
The U.S. and Mexico are tangling over Mexico’s proposal to ban genetically modified corn, with a top U.S. official threatening to initiate a trade dispute if the two countries can’t find an agreement. Mexico plans to ban genetically modified corn by 2024, adding another flashpoint to the two countries’ tensions over trade. More than 90% of corn grown in the U.S. is genetically modified, according to the National Corn Growers Association.

The Decline and Fall of the Tory Empire; Two books on the fall of Boris Johnson and the short reign of Liz Truss suggest the British political system is badly broken.
Adrian Wooldridge – Bloomberg
In a now-notorious 2012 pamphlet “Britannia Unchained: Global Lessons for Growth and Prosperity:,” Liz Truss and four other MPs elected in 2010 suggested that “the British are among the worst idlers in the world. We work among the lowest hours, we retire early and our productivity is poor.”

EU Crypto, NFT Providers Must Report Tax Details Under Leaked EU Plan
Jack Schickler – CoinDesk
Crypto providers will have to report details of their EU clients’ transactions to national tax authorities within the bloc, under a bill set to be proposed by the European Commission next week. The new law, inspired by international standards designed to curb crypto tax evasion, could also apply to stablecoins, derivatives and non-fungible tokens (NFTs), and force even non-EU based crypto providers to register within the bloc, the document reveals.


London Court Orders Six Crypto Exchanges to Share Client Details to Assist in $10.7M Fraud Case
Oliver Knight – CoinDesk
London’s High Court has ordered six cryptocurrency exchanges, which includes Binance, Coinbase, Luno and Kraken, to disclose client information to help trace $10.7 million that was stolen from a U.K.-based exchange in 2020, according to a court judgment shared with CoinDesk.

UK ready to relax ringfencing rules on some banks; Move part of broad range of City reforms intended to take advantage of ‘Brexit freedoms’
Owen Walker, George Parker and Stephen Morris – Financial Times
Britain is poised to relax one of the biggest restrictions on the banking sector as part of “Big Bang 2.0”, the long promised liberalisation of post-Brexit financial services rules. The “ringfencing” of banks with retail and investment arms was introduced after the 2008 financial crash with the aim of reducing risk and preventing banking collapses.

Crypto exchange given go-ahead to track stolen assets in UK court ruling; Six exchanges ordered to disclose customer details to help trace funds overseas
Kate Beioley, Siddharth Venkataramakrishnan and Joshua Oliver – Financial Times
A London court has ordered cryptocurrency exchanges including Binance, Coinbase, Kraken and Luno to hand over customer details to a rival operator to help it track $10.7mn in stolen funds. In a ruling on Tuesday, the High Court ordered six exchanges, all based outside the UK, to disclose customer information including names, bank accounts and card details, subject to some redactions.

Sam Bankman-Fried Called to FTX Hearing by Texas Securities Regulator
Jesse Hamilton, Cheyenne Ligon – CoinDesk
Ex-FTX CEO Sam Bankman-Fried has been called to a Feb. 2 hearing to answer to claims from a Texas regulator that FTX US offered unregistered securities products through its yield-bearing service. The Texas State Securities Board (TSSB) scheduled the administrative hearing, accusing Bankman-Fried’s company of securities violations in Texas, although the disgraced CEO is no longer running the company he founded, which is now mired in bankruptcy proceedings. The board, which sent a registered letter to Bankman-Fried’s address in the Bahamas informing him of the hearing, suggested the proceedings could be conducted over Zoom.

SEC Obtains Final Judgment Against Former Owner of California Film Distribution Company Charged with Defrauding Publicly Traded Fund
On November 25, 2022, the United States District Court for the Southern District of New York entered a final consent judgment against William Sadleir, the former Beverly Hills owner of a defunct film distribution company accused of defrauding a publicly traded fund out of at least $13.8 million.

Virtu Financial launches FOIA lawsuit against SEC for failing to provide data on rulemaking process
Ciara Linnane – MarketWatch
Market maker Virtu Financial Inc. said Tuesday it has launched a Freedom of Information Act (FOIA) lawsuit against its own regulator, the Securities and Exchange Commission, over the latter’s failure to provide information about its rulemaking process and interactions of the chair with interested parties. Virtu said the suit was filed in the U.S. District Court of the Southern District of New York and that it’s being represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

ASIC calls for greater focus on material business risk disclosure in annual reports
ASIC is calling on company directors to ensure material business risks are adequately disclosed in annual reports to better inform shareholders and prospective investors.
As a result of ASIC’s ongoing financial reporting surveillance program and subsequent inquiries of a selection of 2022 annual reports, five listed entities have so far provided disclosure of material business risks in response to our concerns that these had not been sufficiently disclosed in the operating and financial review (OFR) of the directors’ report.

FMA progressing CoFI implementation with publication of licensing materials
Financial Markets Authority
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko is continuing to progress preparations for the Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI), with the release of a suite of materials for banks, insurers and non-bank deposit takers (NBDTs).

FCA fines Julius Baer International Limited £18m and publishes decision notices for three individuals
The FCA has fined Julius Baer International Limited (JBI), an investment advisory and wealth management firm, £18,022,500 for failing to conduct its business with integrity, failing to take reasonable care to organise and control its affairs and failing to be open and cooperative with the FCA.
The FCA has also decided to ban Gustavo Raitzin, former Regional Head for Bank Julius Baer (BJB), Thomas Seiler, former BJB Sub-Regional (Market) Head for Russia and Eastern Europe and JBI non-executive director, and Louise Whitestone, former relationship manager on JBI’s Russian and Eastern European Desk.

Julius Baer Fined £18 Million by UK for Enabling Russian Finders-Fee Deals; Julius Baer ‘ignored’ corrupt Russian relationships, FCA says; CEO says the firm regrets and apologizes for past failings
Jonathan Browning. – Bloomberg
Julius Baer International Ltd. was hit with an £18 million ($21.6 million) penalty by the UK financial watchdog for enabling “corrupt” finders-fee type arrangements. The UK branch of the Swiss firm was fined by the Financial Conduct Authority for a series of shortcomings including that it failed to conduct its business with integrity and failed to be open with the watchdog.

Investing and Trading

How to Keep Your Investments Halal; Alcohol, gambling, tobacco, pork and even interest are off the table, but new financial technology companies and social media are helping people match their portfolios with their beliefs.
Dayana Mustak – Bloomberg
In a crowded field of social media influencers who dispense financial advice, Sheikh Joe Bradford has found his niche. An expert in Islamic law, Bradford teaches his audience how to invest their money the halal way. The comment sections of his accounts-where 85,000 followers across Facebook, Instagram and Twitter convene-are full of questions about exactly which investments are allowed for Muslims and which are forbidden, or haram. The queries reveal the challenges facing a generation of financially and technologically literate Muslims who want to know how traditional Islamic guidelines apply to everything from stocks to nonfungible tokens.

Activist House Flippers Take On Wall Street to Keep Homes From Investors; Housing groups try to counter rental conversions and help lower-income residents achieve homeownership
Will Parker – The Wall Street Journal
Acts Housing, a Milwaukee nonprofit, has helped local low-income families buy their first home for more than two decades. More recently, these families have been losing out to investors whose all-cash bids are more attractive to sellers. “If a family is willing to pay the same amount for a property as an investor, how do we make sure that family actually gets that opportunity?” asked the group’s president and chief executive, Michael Gosman.

Sam Bankman-Fried says he only has $100,000 left in his bank account after FTX collapse: report
Erin Snodgrass, Huileng Tan – Business Insider
Sam Bankman-Fried, the former cryptocurrency exchange CEO who once had a new worth of $26 billion, is down to his last $100,000 after the implosion of FTX, he told Axios on Monday. The investor and founder of FTX took a massive hit in early November when the bulk of his net worth dropped from $15.6 billion to $1 billion in a single day following news that the crypto exchange needed a bailout.

Best Of: Why VC funding is drying up; Venture capital fundraising hit a record-high. Now, the bonanza is over. What does that mean for the future of start-ups?
Financial Times
This week, we revisit one of our favourite episodes. After years of mega-deals and mega-money gushing into start-ups, venture capital fundraising hit a record-high last year. Now, the FT’s Richard Waters says the fundraising bonanza is over and helps us explore what that means for the future of start-ups.

Goldman makes ‘white-label’ bet on white-hot ETF market; Decision to launch platform for other managers endorses view that ETFs will continue to seize market share
Steve Johnson – Financial Times
Goldman Sachs’ decision to become the first big-name institution to launch a “white label” exchange traded fund business is being seen as a large bet that ETFs will continue to seize market share from mutual funds.

Crypto’s Future Could Look Like Iraq’s Past; Money, digital or fiat, depends on faith in the institutions that back it.
Lionel Laurent – Bloomberg
The Iraqi dinar was ahead of its time. Years before Bitcoin was invented, American day traders were lured by the viral economic narrative that the Iraqi currency was a ticket to retirement riches following Saddam Hussein’s downfall. Economists and regulators warned it was a gamble, but punters still paid high fees to own an illiquid currency that some thought might just become the most valuable in the world. Instead, it was devalued by 20% in 2020.

The Long Backstory to Britain’s Sudden Bond Blowup
Guy Collins – Bloomberg
Britain broke all the wrong records in 2022, with its currency tumbling to an all-time low, the biggest-ever spike in government bond yields and the shortest-serving leader in history. The blowup was triggered in September by Prime Minister Liz Truss’s unorthodox plan to cut taxes and increase borrowing in an effort to boost economic growth. But this was a crisis years in the making, and it didn’t end with her downfall after six weeks in office. Government instability and trade disruption due to Brexit have collided with long-standing structural challenges that make the UK vulnerable to sudden swings in global capital flows.

Charitable Giving in U.S. Increased Even as Market Uncertainty Grew
Fang Block – The Wall Street Journal
Giving Tuesday officially kicks off the end-of-year giving in the U.S, and charitable giving has remained high in 2022 even as economic uncertainty grew, according to Vanguard Charitable. During the calendar year, contributors using the donor-advised fund run by Vanguard Charitable have granted out US$1.55 billion, a 4% increase compared to the same period last year. The average grant size is also up 4%.

Environmental, Social and Corporate Governance

Barclays Coal Plan Exposes Reach of Biden’s Inflation Reduction Act; The UK bank is acting to phase out financing to the world’s dirtiest companies earlier than previously stated.
Alastair Marsh – Bloomberg
The Inflation Reduction Act is starting to change the way bankers view their climate targets. Barclays Plc, one of Europe’s biggest coal financiers, said its analysis of the IRA has led it to commit to wind down its funding for coal in the US five years earlier than planned. Chief Executive Officer C.S. Venkatakrishnan told shareholders recently that the bank now expects to phase out its financing of thermal coal power in the US by 2030.

ESG Is Taking Over the Loan Market; Loans with ESG terms are growing to a record slice of the pie; Asia is catching up with SLL issuance as overall loans slow
Jacqueline Poh – Bloomberg
Ethical debt deals are set to become the majority in Europe’s market for corporate loans for the first time next year. Bankers expect at least half of the loan deals for investment-grade firms in Europe, the Middle East and Africa to be tied to environmental, social and governance targets in 2023, based on interviews conducted by Bloomberg. That’s a jump from an already record 36% share this year, as pressure grows for firms to show investors their sustainability credentials.


A Powerful New Tool Transforms How Billionaires Give Fortunes Away; Ray Dalio and the Koch family have pioneered philanthropy through the 501(c)(4). More than just a charity, it can avoid punishing taxes, retain business control and even influence politics.
Ben Steverman – Bloomberg
Ray Dalio, founder of the world’s largest hedge fund, has one. The Koch family, sitting atop a $137 billion fortune, has at least two. Still another entity, with unknown backers, owns a big stake in one of Wall Street’s fastest-growing financial technology startups. The vehicle, long deemed a dumping ground for nonprofits like low-income housing developers, Rotary International and even the AARP, drew controversy in the past decade as a “dark money” political giving tool. Now it’s attracting billionaires who realize it offers far more.

JPMorgan Is Among Banks Trying to Offload $417 Million of Debt for Betting Company 888; Lenders are selling as much as £347 million to investors; Debt was part of financing for 888’s buyout of William Hill
Giulia Morpurgo and Claire Ruckin – Bloomberg
Banks including JPMorgan Chase & Co and Morgan Stanley are set to return to markets to offload debt to betting company 888 Holdings Plc. The lenders will seek to market £347 million ($417 million) of debt used to fund 888’s acquisition of William Hill International, said a person familiar with the matter, who asked not to be identified because they aren’t authorized to speak about it. The banks had originally kept that amount on their balance sheets as a so-called delayed-draw term loan A. That has now been drawn, and the banks are looking to transfer the risk to investors.

Banks are short more than $1 trillion in capital, this analyst says, who fears the shortfall will only get worse
Steve Goldstein – MarketWatch
The new year is nearly upon us, and one idea for where to invest is the banking sector, whose margins benefit from the high interest rates, at not terribly demanding valuations. Here to counter that view is Christopher Whalen, the chairman of Whalen Global Advisers, who makes the bold case that banks were short over $1 trillion in capital at the end of the second quarter, and that it’s only going to get worse as the Fed keeps hiking interest rates.

Investment trust Chrysalis revamps fee structure after scrutiny over bosses’ payouts; Managers were paid £117mn just before stock market turned
Adrienne Klasa – Financial Times
UK investment trust Chrysalis has torn up its fee structure after coming under fire last year for awarding outsized payouts to its managers just before a market rout slashed the value of its investments in unlisted growth stocks. The trust, which focuses on investing in unlisted “unicorn” companies, paid out £117mn in performance and management fees in late 2021, shortly before the value of its investments plummeted as markets turned in 2022.

FTSE China Index Series Quarterly Review – Q4 2022
FTSE Russell
FTSE Russell, a leading global index provider, has today announced the results of the FTSE China Index Series quarterly review for December 2022. There will be no changes to the FTSE China A50 Index.
In the FTSE China 50 Index, JD Health International (P Chip) and Yum China Holdings (P Chip) will be added in this review period, with Longfor Group Holdings (P Chip) and XPeng (P Chip) being deleted.

FTSE Russell launch first multi asset digital asset index series
FTSE Russell
FTSE Russell, a leading global index provider, today announces the launch of its first multi asset, market cap index series covering the investable digital asset market. The newly launched FTSE Global Digital Asset Index Series, built in association with the experts at Digital Asset Research (DAR), covers eight indices from large to micro cap, and is the second FTSE Russell index series based on FTSE DAR Reference Price data.

UBS Says Credit Suisse Clients Are Coming to Bank ‘Proactively’; Chairman says UBS not actively seeking to win rival’s clients; Credit Suisse facing client outflows amid confidence crisis
Myriam Balezou and Marion Halftermeyer – Bloomberg
Clients of Credit Suisse Group AG concerned over the turmoil the bank is currently experiencing are approaching Zurich rival UBS Group AG as an alternative for their investments, UBS Chairman Colm Kelleher said. “We are not actively benefiting at their expense,” Kelleher said at a conference in London on Wednesday. “We view them as a worthy competitor, going through a crisis which I believe they will manage and get to safer ground. But we are also in a world of clients moving money around, where clients proactively approach us.”

Deutsche Bank Hires First Base Metals Trader as It Plots Return
Archie Hunter and Steven Arons – Bloomberg
Deutsche Bank AG made its first hire of a base metals trader as the German lender plots a partial return to the business about a decade after pulling back. Thiebaud Format will join Deutsche Bank in London from BNP Paribas SA, according to people familiar with the matter. He will work on the existing precious metals desk but his role will include some base metals trading, one of the people said. All asked not to be identified discussing the private information.

Wellness Exchange

Gun Death Rate Nears Three-Decade High, With Men at Most Risk; Homicides of Black males and suicides among white males push up firearm fatalities
Dominique Mosbergen – The Wall Street Journal
The rate of gun deaths in the U.S. reached a 28-year high in 2021 after sharp increases in homicides of Black men and suicides among white men, an analysis of federal data showed. A record 48,953 deaths in the U.S., or about 15 fatalities per 100,000 people, were caused by guns last year, said the analysis published Tuesday in the journal JAMA Network Open. Gun deaths declined in the 1990s, but have been rising steadily over the past decade and skyrocketed during the Covid-19 pandemic, said researchers who conducted the analysis.

Chinese vaccine plans spark hope for end of ‘zero COVID’
Joe McDonald – Associated Press
A campaign to vaccinate the elderly has sparked hopes China might roll back severe anti-virus controls that prompted protesters to demand President Xi Jinping resign, but the country faces daunting hurdles and up to a year of hard work before “zero COVID” can end.

China Mulls Rolling Out Fourth Covid Shot on Reopening Pressure; Country is behind globally in adoption of second booster shot; Faces challenge of persuading people, especially elderly
Bloomberg News
China is considering rolling out a fourth round of Covid vaccines, according to people familiar with the matter, as pressure on the government mounts to move away from the stringent virus restrictions that have made the country a global outlier. Officials are making plans for the rollout, though a final decision on timing and vaccine candidates still has to be made, the people said, asking not to be identified discussing government business. Elderly people, which have some of the lowest vaccination rates in China, will be prioritized for fourth shots, one of the people said.


Brexit and the economy: the hit has been ‘substantially negative’; Economists agree that leaving the EU has made Britain poorer, the only question is the scale of the setback
Chris Giles – Financial Times
This is the first part in a new FT series, Brexit: the next phase. Almost two years after Britain left the EU, economists have reached a consensus: Brexit has significantly worsened the country’s economic performance. They agree that the vote to leave the bloc has made households poorer, that negotiating uncertainties have taken their toll on business investment and that new barriers to trade have damaged economic links between the UK and EU.

UK Pensions Panic Left Aussie Market Stronger After Selling Wave
Garfield Clinton Reynolds. – Bloomberg
The fallout from September’s UK pensions turmoil looks to have left Australia’s securitized markets stronger as the subsequent hitch-free wave of stressed sales highlighted the depth of liquidity. That’s the view of Neil Calder, head of portfolio management for credit at the European Bank for Reconstruction and Development. Australian assets were among those hit by the extraordinary sell-off as UK fund managers rushed to raise cash to meet margin calls.

Arctic Air Blast to Hit Europe Next Month Will Test Energy Grids; Greenland blocking will cover most of continent with cold air; Nordic power prices already trading at highest since September
Isabella Anderson, Josefine Fokuhl, and Lars Paulsson – Bloomberg
Temperatures are poised to plunge next month in Northern Europe as cold air blows in from the Arctic in what will be the first proper winter test for the region’s fragile energy systems. The Nordic region and Germany will see temperatures well below average for this time of year, with levels in Helsinki falling as much as 6.9 degrees Celsius (12.4 Fahrenheit) below average on Tuesday and Wednesday, Maxar Technologies Inc. said in a report. It’s only southern Europe that will be spared the frigid temperatures, forecasters warn.

Norway to Hit Fleeing Billionaires With Higher Exit Tax; Tax changes follow reports that Norway’s rich are leaving; Left-leaning government seeks to address rising inequality
Ott Ummelas – Bloomberg
Norway is introducing stricter rules to tax expatriates amid reports that more of the country’s billionaires have moved abroad or consider leaving. A five-year time limit on exit tax on unrealized gains on shares and other assets will be abolished and the rules are extended “to apply to the transfer of shares to close family members living abroad,” with immediate effect, the ruling Labor and Center parties agreed with their budget partner the Socialist Left on Tuesday.

Turkey’s Most Valuable Stock ‘Too High’ After GameStop-Like Surge; Sasa’s surge has made it too expensive to buy, chairman says; Analysts unable to explain polyester firm’s skyrocketing price
Tugce Ozsoy and Taylan Bilgic – Bloomberg
It’s Turkey’s own version of GameStop Corp. Shares of Sasa Polyester Sanayi AS have skyrocketed this year, making the polyester maker the country’s most valuable listed firm, yet even its chairman doesn’t know the cause and is questioning its bloated market value. “I keep telling people that it’s too high and shouldn’t be purchased,” Ibrahim Erdemoglu told daily newspaper Ekonomi. He and others sold some stock when the price rose to 80 liras last month, prior to it soaring to a closing peak of 186.3 liras on Nov. 16. It has since retraced some of those gains, falling 9.9% to 125.9 liras in Wednesday trading.

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