Kraken sued by SEC in latest clampdown on crypto exchanges

Nov 21, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Tuesday’s Children, the charity that supports military families and the 9/11 community, honored retired market analyst Richard Repetto at their Casino Night fundraiser on November 15, 2023. Rich gave a speech at the event that you can view on YouTube HERE.

After the SEC Kraken charges today, the crypto world is still looking for proponents to lead the industry who can stand up to the regulatory challenges. Who will it be?

I decided to ask OpenAI what would happen if Sam Altman were fired as CEO of the company. This is the response I received:

Q: What would happen to the company OpenAI if CEO Sam Altman were fired?

A: ChatGPT
The hypothetical firing of a CEO like Sam Altman from a company like OpenAI would typically lead to several possible outcomes, depending on the circumstances surrounding the departure and the organization’s plans for succession. Here’s what might happen in a general sense:

Immediate Impact on Company Morale and Culture: A CEO often sets the tone for a company’s culture and morale. The departure of a leader can lead to uncertainty among employees and stakeholders about the future direction of the company.

Market and Industry Response: The market and wider industry may react to the news, potentially affecting partnerships, investor sentiment, and the public perception of the company.

Succession Plan Activation: Most companies, especially those that are well-established, have a succession plan in place. This plan would be activated to ensure a smooth transition of leadership. If the CEO has been removed abruptly without a succession plan, the company’s board of directors would likely appoint an interim CEO while searching for a permanent replacement.

Strategic and Operational Shifts: A new CEO often brings a change in strategic direction, which could mean shifts in operations, priorities, and potentially the overall mission of the company.

Regulatory and Legal Considerations: Depending on the reasons for the firing, there may be regulatory or legal considerations to address, particularly if the firing is contentious or related to compliance issues.

Change in Investor Relations: Investor confidence may be shaken or bolstered by the change, depending on the incoming leadership and their perceived capabilities.

Media and Public Relations Management: The company would need to manage the narrative around the CEO’s departure to maintain public confidence in its mission and stability.

Sounds like the board should have used ChatGPT before it fired Altman.

As part of NYSE/ICE’s Global Giving Campaign, the NYSE will hold its 100th Annual Tree Lighting at the New York Stock Exchange, 11 Wall Street, New York, NY on November 30, 2023 from 3:00 p.m. to 6 p.m. The NYSE invites you to “Sip some hot cocoa, send a note to Santa, and enjoy the sounds of the season as The New York Stock Exchange hosts featured artists, organizations and listed companies at the 100th annual lighting of the NYSE Christmas Tree.”

The afternoon event will feature entertainers and performers including Fogo Azul, America’s Got Talent’s Sal Valencia, Grand Ole Opry’s Mandy Barnett, Frankie McNellis, The NYC Gay Men’s Chorus, High and Mighty Brass Band, Brian Kirk and the Jerks, The Hit Squad and more.

The CME Group is holding “The Crypto Classic Cryptocurrency Futures and Options Trading Challenge” and you can register today. The start date of the challenge is December 10 at 5:00 p.m. CT and it ends on December 15, 2023 at 12:00 p.m. CT. In taking the challenge you explore the benefits of cryptocurrency futures and options trading while competing against your peers for a chance to win cash prizes up to $2500. Of course if you want the big money from the CME, join the LPGA.

This is from a couple of days back, but Bakkt announced the relaunch of Bakkt Custody with some additional functionality and expanded asset support. Bakkt says “The relaunched platform, built for flexibility and secure innovation, will also offer expanded coin custody capabilities with six additional coins to go live in December.”

Interactive Brokers is holding an IBKR Webinar titled “0DTE Options – The Move to Shorter Duration and What It Means for Risk” featuring Mathew Cashman, Principal, OCC & Instructor, The Options Industry Council, today at 2:00 p.m. EST. For more details and to register click 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


The World Resources Institute has created a resource hub, “Paying for The Paris Agreement.” The section “Shifting & Mobilizing Private Finance” includes briefings, definitions of terms, interviews with key players and links to additional resources. Policies detailed include risk-sharing mechanisms, fiscal policy tools and regulatory measures to increase transparency or shift behavior away from unsustainable activities in the areas of carbon pricing; loan guarantees; blended finance and catalytic capital; tax credits; public-private partnerships; and climate efficiency standards. Visit the Resource Hub here. ~SAED

Our most read stories yesterday on JLN Options were:
How Bullish Are Investors on Nvidia Now? Options Offer a Clue from The Wall Street Journal.
S&P 500 to Flirt With Record High in Bumpy 2024 Ride, SocGen Says from Bloomberg.
Bitcoin Options Open Interest Climbs to Record $15B on Crypto Exchange Deribit from CoinDesk. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).


Sponsored Content
To reinforce the function of margin, that is to “protect investors,” Japan Securities Clearing Corporation (JSCC), a group entity of Japan Exchange Group (JPX), that handles clearing of JPX’s derivatives market, has changed its Margin calculation methodology from “SPAN method” to “VaR method” on November 6, 2023

Under the VaR Margin calculation method, there are 2 types of calculation methods, Historical Simulation Method (HS-VaR Method) and Alternative Simulation Method (AS-VaR Method).

HS-VaR method is used for Index Futures/Options (such as our flagship contract Nikkei 225 futures, excluding dividends index futures), Japanese Government Bond (JGB) Futures/Options, Interest Rate Futures (3-Month TONA Futures) listed on Osaka Exchange (OSE), and TOCOM’s Electricity and LNG Futures contracts. On the other hand, AS-VaR method is used for OSE’s Dividends index futures, Precious Metals Futures/Options, Rubber Futures, Agricultural Futures and TOCOM’s Energy Futures (other than Electricity/LNG Futures).

* In JST: JST minus 15 hours = Chicago time.
** Instruments subject to AS-VaR Method are also recorded.
Note: Each Broker decides its handling of the amount of Margin to investors independently based on the Margin requirement JSCC notifies the Brokers. So, the Margin requirement JSCC calls for the Brokers and the amount of Margin Brokers require for investors to deposit may be different.

Contact: Osaka Exchange / Tokyo Commodity Exchange Derivatives Business Development


Australian stock exchange picks India’s TCS to rebuild software after earlier flop
Byron Kaye and Himanshi Akhand – Reuters
Australian stock exchange operator ASX said it had hired Tata Consultancy Services (TCS) (TCS.NS) to overhaul its clearing and settlement software, opting for a route that will take less customisation after ditching a much-criticised blockchain-based effort. The choice is a major departure from its decision in 2017, announced with much fanfare, to be at the vanguard of adopting blockchain-like technology for use in critical financial architecture, an attempt that resulted in repeated delays before it was shelved last year.

***** The next move in the post CHESS game.~JJL


A Descendant of Freed Slaves, Financier Pursues Family’s $900 Million Oil Claim; Kneeland Youngblood alleges his family was deprived of the riches from oil-soaked land and is suing ConocoPhillips
Benoit Morenne – The Wall Street Journal
At Kneeland Youngblood’s graduation from Princeton, his grandfather told him that he had once sought to visit the campus in the 1920s but was stopped at the school’s gates because he was Black. After amassing a fortune, Youngblood donated to build a new plaza at his alma mater and had his grandfather’s name chiseled into the steps.

****** Your land is worthless until there is oil underneath it.~JJL


OpenAI’s Ineffective Altruists vs. Sam Altman; The board of directors may have blown up the company.
The Editorial Board – The Wall Street Journal
Corporate power struggles aren’t rare, and most companies survive them. But the OpenAI board’s sudden ouster of CEO Sam Altman last week looks increasingly like a misguided kamikaze run. It’s hard to see who benefits from the melodrama besides opponents of innovation. News of Mr. Altman’s removal late Friday shocked Silicon Valley. Mr. Altman helped launch OpenAI in 2015 with the mission of responsibly developing artificial intelligence to benefit humanity. He has since become the technology’s public face, with media appearances and testimony to Congress.

***** Here is an abridged version of ChatGPT’s answer to the question of whether Humpty Dumpty can be put back together again: “In the realm of nursery rhymes, after Humpty Dumpty had a great fall, all the king’s horses and all the king’s men couldn’t put Humpty together again. However, in the world of creativity and metaphor, there are ways to “put Humpty Dumpty back together”: Literature and Storytelling: Authors can rewrite the story with a happier ending where Humpty is put back together, perhaps with the help of a skilled craftsman or a kind inventor. In the end, while the nursery rhyme suggests a certain futility, the spirit of human creativity and resilience often writes a different ending.” The creators of ChatGPT are full of human creativity and resilience.~JJL


Monday’s Top Three
Our top story Monday was a tie between Business Insider’s A Russian general who was critical of the army’s operation was found dead and Bloomberg’s The Doomed Mission Behind Sam Altman’s Shock Ouster From OpenAI. Second was ‘I’ve never seen anything like this’: how OpenAI’s dramatic weekend unfolded, from the Financial Times. Third was a tie between Wired’s Elon Musk May Have Just Signed X’s Death Warrant and The Wall Street Journal’s Amazon Launches Free AI Classes in Bid to Win Talent Arms Race.



Lead Stories

Kraken sued by SEC in latest clampdown on crypto exchanges; Wall Street regulator says trading venue commingled customer funds with its own
Stefania Palma and Scott Chipolina – Financial Times
The top Wall Street watchdog has sued popular cryptocurrency exchange Kraken, alleging it operated as an unregistered securities business in the regulator’s latest crackdown on digital trading platforms. The charges against San Francisco-based Kraken add to the list of Securities and Exchange Commission clampdowns on the digital asset sector this year, notably lawsuits against Binance – the world’s largest crypto exchange – and US-listed rival Coinbase.

Nearly All of OpenAI Staff Threaten to Go to Microsoft If Board Doesn’t Quit; Majority of OpenAI employees sign letter seeking new board; Board member Ilya Sutskever is among the signatories
Ashlee Vance, Edward Ludlow, and Vlad Savov – Bloomberg
Nearly all of OpenAI’s employees have threatened to quit and follow ousted leader Sam Altman to work at the company’s biggest investor, Microsoft Corp., unless the current board resigns, leaving the future of the high-profile artificial intelligence startup increasingly uncertain. More than 700 of the AI firm’s roughly 770 employees signed a letter on Monday addressed to OpenAI’s board stating that the signatories are “unable to work for or with people that lack competence, judgment and care for our mission and employees.” The letter called for every member of the board to resign and for Altman to be reinstated, or else employees might jump to Microsoft. The software giant “has assured us there are positions for all OpenAI employees,” the letter said.

Binance faces $4bn settlement to halt US criminal investigation; Proposed deal would come as Washington increases its scrutiny of misconduct in crypto sector
Stefania Palma and Scott Chipolina – Financial Times
The US Department of Justice is seeking more than $4bn from Binance to settle a criminal investigation that has ensnared the world’s biggest cryptocurrency exchange and its co-founder. The proposed deal between Binance and the DoJ would bring to an end a multiyear investigation by prosecutors that has focused on bank fraud, sanctions violations and money laundering, said a person familiar with the matter.

What Happens When a Founder Leaves? The OpenAI drama is an extreme case of an old concern in business.
Peter Coy – The New York Times
People are going to be talking about the blowup at OpenAI for years. ChatGPT itself – a product of OpenAI – could not have concocted a tale as wild as the one that unfolded over the weekend. OpenAI’s board of directors fired a co-founder, Sam Altman, as chief executive officer on Friday, saying he was “not consistently candid in his communications” with the board. On Sunday the board rejected pressure to take Altman back. Hours later, Microsoft announced it was hiring him and Greg Brockman, another founder, to lead a new advanced A.I. research team.

ASX Chooses CHESS Replacement
Markets Media
ASX has completed its reassessment of the solution design to replace CHESS and will proceed with a product based solution to be delivered by global technology provider TATA Consultancy Services (TCS). The CHESS replacement project will now move to the next phase of detailed design and implementation, with further stakeholder consultation to commence in the first quarter of 2024.

Ilya Sutskever: The OpenAI Genius Who Told Sam Altman He Was Fired; Company’s chief scientist led a board coup against one of the most prominent figures in Silicon Valley
Robert McMillan – The Wall Street Journal
Last Friday, Ilya Sutskever sent a text message to his boss and fellow board member, Sam Altman. Could he jump on a video chat at noon Pacific time? On the call was the rest of OpenAI’s board, but it was Sutskever, the company’s chief scientist and co-founder, who delivered the news. Altman was fired, “and the news was going out very soon.”

OpenAI in ‘Intense Discussions’ to Quell Potential Staff Mutiny; Staff told startup is negotiating with Sam Altman and board; No imminent leadership decision expected as talks drag out
Shirin Ghaffary – Bloomberg
OpenAI said it’s in “intense discussions” to unify the company after another tumultuous day that saw most employees threaten to quit if Sam Altman doesn’t return as chief executive officer. Vice President of Global Affairs Anna Makanju delivered the message in an internal memo reviewed by Bloomberg News, aiming to rally staff who’ve grown anxious after days of disarray following Altman’s ouster and the board’s surprise appointment of former Twitch chief Emmett Shear as his interim replacement.

OpenAI’s future hangs in balance amid standoff between staff and board; More than 95% of employees have threatened to quit and join Microsoft if board refuses to resign
George Hammond and Madhumita Murgia – Financial Times
The future of OpenAI remained uncertain on Tuesday after extraordinary efforts by employees and investors to oust the board had so far failed to persuade its directors to resign and reinstate co-founder Sam Altman. People with direct knowledge of the matter said that by the end of Monday, 747 out of 770 OpenAI employees had signed a letter threatening to quit and join Microsoft if the board refused to resign and reverse their decision on Friday to sack Altman.

Meet the Board of OpenAI Who Pushed Out Sam Altman; The group is now the subject of an employee letter seeking their removal
Sarah E. Needleman – The Wall Street Journal
Here are the four OpenAI board members who pushed out CEO Sam Altman on Friday, leading to an employee revolt that is seeking their removal and threatening the company’s future.

The Big Bank With a $15 Billion Conundrum in China; HSBC values its stake in Bank of Communications far above the level implied by the Chinese lender’s stock price
Josh Mitchell – The Wall Street Journal
HSBC Holdings has a $15 billion headache in China-a big stake in a local lender that it can’t easily sell and that could require a big write-down. Long after most other Western banking giants have exited similar positions, HSBC has held on to its roughly 19% position in Bank of Communications BCMXY -2.09%decrease; red down pointing triangle, an investment that dates back to 2004. HSBC, Europe’s largest bank by market value, has said the stake is strategically important for its ambitions to grow in Asia.

Global warming on track for 2.9C as greenhouse gases keep rising, UN says; Chances of keeping within 1.5C threshold put at a low 14%
Kenza Bryan and Steven Bernard – Financial Times
The world is on track for a temperature rise of up to 2.9C above pre-industrial levels, a report by the UN environment programme has found, even assuming countries stick to their Paris agreement climate pledges. UN chief Antonio Guterres said that keeping the Paris goal of limiting the rise to ideally 1.5C and well below 2C would require “tearing out the poisoned root of the climate crisis: fossil fuels.”

***** More coverage of the UNEP report from Reuters Digital and Bloomberg ~SAED

Meloni, UBS and Jefferies Pull Off Stealth $1 Billion Bank Sale; Rome jumped on expected market boost after ratings decisions; Move on stake sale decided with advisers UBS, Jefferies
Sonia Sirletti, Chiara Albanese, and Alessandra Migliaccio – Bloomberg
It took just a few hours for Prime Minister Giorgia Meloni to kick off the sale of a $1 billion stake in Banca Monte Paschi di Siena SpA which had been years in the works. Soon after a ratings decision by Moody’s Investors Service on Friday capped a series of such assessments, her government jumped on an expected boost in market sentiment to green light the sale of the stake in the world’s oldest bank, according to people familiar with the matter.

There’s Still No Ride Like a Free Ride in Free Markets; Keep waiting for Peak Passive if you want, but CalPERS would have done better to adopt the Vanguard model. Plus: the OpenAI drama.
John Authers – Bloomberg
Free-Riding. The best deal in life is to get a free ride. Those rare situations when someone else does all the work and you get to cash in as much as they do, but with none of the effort, are rather wonderful. It’s only rational to take advantage when they’re on offer. But free-riding has its limits. After a while, it provides a disincentive to doing anything. That leads to complicated rules designed to minimize it, perhaps most significantly through patents. If someone else has a great idea, you can’t just use it and pay nothing. That soon leads to dilemmas, as in making patented life-saving medicines available to poor countries.

Richest 1% account for more carbon emissions than poorest 66%, report says; ‘Polluter elite’ are plundering the planet to point of destruction, says Oxfam after comprehensive study of climate inequality. Introduction: the great carbon divide; Twelve billionaires’ emissions equal to fuelling 2.1m homes
Jonathan Watts – The Guardian
The richest 1% of humanity is responsible for more carbon emissions than the poorest 66%, with dire consequences for vulnerable communities and global efforts to tackle the climate emergency, a report says. The most comprehensive study of global climate inequality ever undertaken shows that this elite group, made up of 77 million people including billionaires, millionaires and those paid more than US$140,000 (pounds 112,500) a year, accounted for 16% of all CO2 emissions in 2019 – enough to cause more than a million excess deaths due to heat, according to the report. For the past six months, the Guardian has worked with Oxfam, the Stockholm Environment Institute and other experts on an exclusive basis to produce a special investigation, The Great Carbon Divide. It explores the causes and consequences of carbon inequality and the disproportionate impact of super-rich individuals, who have been termed “the polluter elite”. Climate justice will be high on the agenda of this month’s UN Cop28 climate summit in the United Arab Emirates.

Ukraine Invasion

Ukrainian troops beat back Russian attacks near Bakhmut as Putin’s forces make desperate push; Kyiv’s troops repel 11 attacks in 24 hours, say its military officials
Arpan Rai – Independent
Russian forces in Ukraine’s eastern theatre of war are stepping up their assault around Bakhmut and have switched from defensive to offensive lines of attack, Kyiv’s military officials said. The attacks are focused on Klishchiivka, a village on higher elevation about 9km away from Bakhmut, said Volodymyr Fityo, a spokesperson for Ukrainian ground forces. Klishchiivka was recaptured from Russian forces by Ukraine in September in counteroffensive operations. Bakhmut had been taken by Russian troops in May and has faced some of the most violent fighting between the two countries.

‘It’s like Covid’: Zelensky says Putin has made ‘five or six’ attempts on his life; Zelensky’s closest team was handed rifles and body armour and bodyguards shut off any access to his office using makeshift barricades and bits of plywood
Arpan Rai, Tom Watling – Independent
Ukrainian President Volodymyr Zelensky has claimed that at least “five or six” Russian attempts to assassinate him have been foiled by his security services. The wartime leader, speaking from the Ukrainian capital Kyiv, said the volume of attempts had turned him almost numb to the danger. He compared the later attempts to catching the Covid-19 infection.

Russia says it scuppers more Ukrainian attempts to cross the Dnipro
Russia said on Tuesday that marines, aviation and artillery had scuppered more Ukrainian attempts to gain a foothold on the eastern bank of the River Dnipro and on islands at the mouth of the river in southern Ukraine. President Vladimir Putin sent troops into Ukraine in February 2022, triggering a major European land war and the most serious confrontation between Russia and the West since the depths of the Cold War.

A ‘Swiss Army knife’ for the skies: Ukrainian pilot races to get to grips with F-16 jet
Daria Markina-Tarasova – CNN
It can take years to fully train an F-16 fighter pilot. “Moonfish” – a Ukrainian military aviator – has about six months. Moonfish is the call sign of a Ukrainian pilot who is training to fly the United States-designed multirole aircraft. He spoke with CNN via Zoom from an undisclosed location, where he is in his second month of training.

Tired Ukrainian Troops Fight to Hold Back Russian Offensive: ‘They Come Like Zombies’; Russia is taking heavy casualties in the mud of eastern Ukraine as it presses to encircle the city of Avdiivka
Marcus Walker – The Wall Street Journal
Every day, groups of Russian infantry attack the tree lines and pockmarked fields east of this village, which block their push to surround the city of Avdiivka. Every day, Ukrainian troops cut most of them down. But more Russians keep coming. Depleted Ukrainian units can’t shoot them all.

Ukraine war live updates: Russia says co-existence not possible with Ukraine’s current ‘regime’; Kyiv marks uprising anniversary
Holly Ellyatt – CNBC

Israel/Palestine Conflict

Gaza Fighting Intensifies as Deal for Hostages Takes Shape; Israel and Hamas are moving toward an agreement that could see the release of some 50 hostages taken from Israel on Oct. 7
Sune Engel Rasmussen, Summer Said and Jared Malsin – The Wall Street Journal
Israel intensified its offensive in northern Gaza ahead of a potential deal with Hamas that would see the militant group free dozens of hostages in exchange for scores of Palestinian prisoners and a partial pause in fighting. A possible agreement comes amid growing domestic pressure on Prime Minister Benjamin Netanyahu and his government to secure the release of more than 200 Israeli hostages abducted by Hamas and other militants during the group’s attack on Israel on Oct. 7.

Israel Risks Winning the Battle in Gaza But Losing the War; It isn’t too late to heed Biden’s advice on avoiding US mistakes after 9/11.
Marc Champion – Bloomberg
Soon after Oct. 7, when Israel suffered the worst attack on Jews since the Holocaust, US President Joe Biden gave the nation’s leaders some remarkably good and personally chastening advice: Don’t let rage drive you to the mistakes the US made after a terrorist attack on America killed almost 3,000 people on Sept. 11, 2001.

How Musk’s X Is Failing To Stem the Surge of Misinformation About Israel and Gaza
Davey Alba, Denise Lu, Leon Yin and Eric Fan – Bloomberg
In late September, Elon Musk wrote on X that he hoped “people around the world engage in citizen journalism, so we know what’s truly happening and we get real-time, on-the-ground coverage!” He didn’t have to wait long. When Hamas attacked Israel and the country retaliated with an assault on Gaza, posts that purported to show graphic violence in real-time went viral on the platform. Unfortunately, much of it was false.

How public opinion on the Israel-Hamas war has shifted; Surveys have picked up significant changes in the US and Europe that are rippling through national politics
Janina Conboye and Alan Smith – Financial Times
The bloodshed between Israelis and Palestinians has long divided the world, bringing people on to the streets in protest and splitting the international community. The Hamas-led attack of October 7, and Israel’s six-week campaign of retaliation in Gaza, has further polarised views, with harrowing scenes from Israel and Gaza dominating news and social media around the world.

Israel battles on as Hamas signals truce for hostages; Ismail Haniyeh says message delivered to Qatari mediators and agreement is ‘close’
Mehul Srivastava and Raya Jalabi – Financial Times
The Israeli military is rapidly expanding its foothold in northern Gaza as Hamas leaders signalled their readiness for a “truce”, raising the prospect of a temporary pause in the war that might see some hostages freed. A short statement on Telegram, purportedly from Qatar-based Hamas leader Ismail Haniyeh, said the group had “delivered its response to the brothers in Qatar and the mediators, and we are close to reaching a truce agreement”.

Exchanges, OTC and Clearing

ASX to replace its clearing and settlement platform through TCS as part of fresh overhaul plans; Decision follows the Australian exchange’s scrapping of its DLT project to replace its legacy clearing and settlement system last November.
Claudia Preece – The Trade
Australian securities exchange ASX is set to replace its cash equities clearing and settlement platform with Tata Consultancy Services’ (TCS) platform, a proactive step in overhauling the post-trade offering after its six-year long blockchain ambitions came to an end in 2022. ASX will implement TCS’ flagship product, TCS BaNCS for Market Infrastructure, set to be implemented in two releases – first the clearing service, followed by the settlement depository and sub-register services.

SIX unveils new bot providing clients enhanced insight into corporates’ movements; The launch follows that of the Corporate Action Calendar by SIX in September which allows clients to track and process upcoming events including M&As, dividends, and stock buybacks.
Claudia Preece – The Trade
SIX has launched a new automated software application, SIX Bot, aimed at providing clients an enhanced view of market movements through wider access to corporate actions data. The move comes on the back off surging client demand for insight into where corporates are moving and why.

Quantile and LCH ForexClear go live with FX Smart Clearing service; New offering will enable participants to reduce capital requirements and counterparty risk.
Wesley Bray – The Trade
LSEG post-trade businesses Quantile and LCH ForexClear have delivered a new FX Smart Clearing service allowing participants to selectively clear FX forwards via LCH ForexClear, reducing capital requirements and counterparty risk. The service, which went live on 15 November, selects existing uncleared trades to move to LCH ForexClear alongside optimising portfolios with new rebalancing trades to reduce counterparty risk and the financial resources a participant must hold. The optimisation is fully customisable, allowing participants to control their risk and resource changes, as well as preferred currency pairs and trading partners. In addition, portfolios can also be potentially compressed to significantly reduce trade count and notional.

Second Euronext Tech Leaders Campus brings together Europe’s leading Tech companies, advisors and investors committed to accelerating Tech growth in Europe
Second successful edition of the Euronext Tech Leaders Campus, a Euronext initiative aimed at bringing together the European technology community with the support of a network of local and international investment banks and advisors. 180 meetings organised between international investors and executives of Euronext Tech Leaders, a unique platform in Europe to support them in funding their growth. 300+ participants at the Euronext Tech Leaders Campus, uniting the community of listed Euronext Tech Leaders, high-growth European private Tech companies and financial players. Euronext, the leading pan-European market infrastructure, holds today in Paris the second edition of the Euronext Tech Leaders Campus, the flagship international event to strengthen the European Tech sector and support European technology companies in their growth funding needs, with the support of major partners. This second edition brings together the 122 Euronext Tech Leaders listed companies, together with leading listed and private Tech companies. With ten panels and workshops, led by C-level executives of Tech companies and international financial experts, the event aims at fostering innovation and collaboration within the European Tech sector.

London Stock Exchange Welcomes The International Fund For Agricultural Development (Ifad), Celebrating Their Sustainability Bonds And Inaugural Impact Report
London Stock Exchange Group
The International Fund for Agricultural Development, a United Nations specialized agency and international financial institution, is delighted to open the London Stock Exchange market today. Founded in 1977 in response to a global food crisis, IFAD’s mission to transform rural economies and food systems by investing in rural people is just as important and relevant today. IFAD listed four sustainable private placements on the London Stock Exchange’s Sustainable Bond Market platform (all issued at par) and is launching its first impact report in compliance with ICMA sustainable bond guidelines. In line with its Sustainable Development Finance Framework, the proceeds will be used for IFAD-supported projects in 93 member countries across five regions.


Twitter / X confirms Nazi content was shown alongside Apple ads. So why is it suing? The social media platform is accusing Media Matters of trying to drive away its advertisers.
Amanda Yeo – Mashable
Twitter / X is suing media watchdog group Media Matters over its Nov. 16 report that the social media platform was displaying major companies’ ads alongside Nazi content. The report came just one day after Twitter / X owner Elon Musk endorsed an anti-Semitic conspiracy, prompting huge advertisers such as Apple and Disney to flee. Filed in Texas on Monday, Twitter / X’s lawsuit accuses Media Matters of “manufacturing” the screenshots in its report that show advertisers’ posts alongside white nationalist content. According to Twitter / X, this was done as a deliberate, malicious attack to “drive advertisers from the platform and destroy X Corp.”

FinClear selects Eventus Validus platform for equities post-trade surveillance; Firms partner to tailor platform to meet unique needs of Australian market structure
Eventus, a leading global provider of state-of-the-art, at-scale trade surveillance software across all lines of defense, and FinClear, Australia’s leading provider of trade execution and third-party clearing services, today announced that FinClear has deployed Eventus’ Validus platform for trade surveillance and post-trade monitoring. FinClear touches one in two retail transactions in Australia, clearing and settling AU$360 billion in transactions each year. The company hosts more than AU$145 billion of listed assets on its existing platform and supports more than 570,000 accounts. It services more than 250 wholesale intermediaries.

Altice sells chunk of data centre business to Morgan Stanley; Telecoms group owned by Franco-Israeli billionaire Patrick Drahi seeks ways to cut $60bn debt pile
Adrienne Klasa – Financial Times
Heavily indebted telecoms group Altice has agreed to sell a majority stake in its data centre business to a Morgan Stanley infrastructure fund as French-Israeli billionaire owner Patrick Drahi works to shore up the group’s finances. Morgan Stanley Infrastructure Partners will take a 70 per cent stake in the network of 257 data centres across France at an enterprise value of EUR764mn. That is a multiple of around 29 times the company’s 2023 earnings before interest, tax, depreciation and amortisation of EUR26mn.

Microsoft Hiring Sam Altman Won’t Solve Its OpenAI Problem; OpenAI left Microsoft with no easy choices.
Austin Carr – Bloomberg
After a chaotic few days of boardroom coups and attempted counter-coups at OpenAI, Microsoft Corp. said it would hire Sam Altman to lead a new artificial intelligence research team. It was a stunning turn for Microsoft, which had bet big on OpenAI and its former chief executive officer, Altman.


Cyber criminals demand £600,000 ransom for stolen British Library data; The Rhysida group has demanded 20 Bitcoin (roughly £602,500) for the return of the stolen data
Nicole Vassell – Independent
A group of hackers has claimed responsibility for a cyber attack that has crippled the British Library for the past few weeks. Ransomeware gang, the Rhysida group has demanded 20 Bitcoin (roughly £602,500) for the return of the stolen data, which includes employee passport scans and financial information.

US Cybersecurity Lab Suffers Major Data Breach
Phil Muncaster – Infosecurity Magazine
A leading US laboratory famed for cybersecurity, nuclear and clean energy research has reportedly suffered a major breach of employee data. Dating back to the 1940s, Idaho National Laboratory (INL) is responsible for generating the first usable electricity from nuclear power and developing the first nuclear propulsion systems for nuclear submarines and aircraft carriers.

The Biden EO on AI: A stepping stone to the cybersecurity benefits of AI
Drew Bagley, Robert Sheldon – SC Magazine
While the Biden administration’s executive order (EO) on artificial intelligence (AI) governs policy areas within the direct control of the U.S. government’s executive branch, they are important broadly because they inform industry best practices and subsequent laws and regulations in the U.S. and abroad. Accelerating developments in AI – particularly generative AI – over the past year or so has captured policymakers’ attention. And calls from high-profile industry figures to establish safeguards for artificial general intelligence (AGI) has further heightened attention in Washington. In that context, we should view the EO as an early and significant step addressing AI policy rather than a final word.


SEC Sues Kraken as Crypto Exchange Crackdown Continues. Why Bitcoin Is Holding Steady.
Jack Denton – Barron’s
The Securities and Exchange Commission sued cryptocurrency exchange Kraken on Monday, the latest move in a U.S. regulatory crackdown on crypto. But it did little to shake the price of Bitcoin, which has rallied on hopes of a friendlier SEC.

Kraken Accused by SEC of Operating Unregistered Platform, Improperly Mixing Customer Funds; The U.S. crypto exchange is the latest targeted by the Securities and Exchange Commission in a series of similar actions being fought in court by other companies.
Nikhilesh De – CoinDesk
Crypto exchange Kraken commingled customer and corporate funds while operating as an unregistered broker, clearing agency and dealer, the U.S. Securities and Exchange Commission (SEC) alleged in a new lawsuit Monday. The federal regulator claimed that the San Francisco-based company violated federal securities laws in a repeat of its suits against other crypto trading platforms. Unique to Monday’s lawsuit are claims that Kraken created a “significant risk” by commingling up to $33 billion in customer crypto with its own corporate assets, the regulator said, quoting Kraken’s independent auditor.

Crypto Exchange Bullish Completes Purchase of CoinDesk: WSJ; Bullish, which is run by former NYSE President Tom Farley, bought 100% of CoinDesk from crypto-focused investor DCG in an all-cash deal
Jamie Crawley – CoinDesk
Cryptocurrency exchange Bullish has bought CoinDesk, the Wall Street Journal (WSJ) reported on Monday. Bullish, which is run by former New York Stock Exchange (NYSE) President Tom Farley, bought 100% of CoinDesk from crypto-focused investor Digital Currency Group (DCG) in an all-cash deal, the Journal said. Financial terms of the deal were not disclosed.

Tether deposited $1bn at investment group founded by Tory donor; Funds from the world’s largest stablecoin issuer are at the centre of a High Court battle
Cynthia O’Murchu and Scott Chipolina – Financial Times
Tether deposited more than $1bn with a financial services group founded by a Tory party donor who last year was indicted on allegations of bribery by US authorities. The world’s largest stablecoin issuer placed the funds with a subsidiary of Britannia Financial Group, according to filings made in London’s High Court, offering a rare glimpse into the banking relationships Tether has built.


Argentina Braces Itself for Its New ‘Anarcho-Capitalist’ President; Javier Milei has said that society is better without government. Now he is about to run Argentina’s.
Jack Nicas, Natalie Alcoba and Lucía Cholakian Herrera – The New York Times
Javier Milei was first introduced to the Argentine public as a combative television personality with an unruly hairdo and a tendency to insult his critics. So when he entered Argentina’s presidential race last year, he was viewed by many as a sideshow.


ASIC Annual Forum 2023: Impact of AI on financial services
AI has the power to supercharge Australia’s productivity, but its widespread adoption is not without risks, the ASIC Annual Forum today heard. Advances in AI are increasingly driving predictions, decision-making and recommendations across many organisations, including in financial services and markets.

DOJ Settles With Two U.K. Reinsurance Brokers Over Ecuador Bribes; Tysers Insurance Brokers and H.W. Wood will enter into deferred prosecution agreements over a scheme partly set in Florida to pay off Ecuadorean officials
David Smagalla – The Wall Street Journal
The Justice Department has settled with two U.K.-based reinsurance brokers that admitted to participating in a scheme to bribe Ecuadorean government officials. Tysers Insurance Brokers and H.W. Wood have agreed to enter into three-year deferred prosecution agreements filed in the Southern District of Florida.

Investing and Trading

Higher Interest Rates Are Shattering Housing Dreams Around the World; The end of the property boom is diminishing homeownership as a path to wealth and deepening economic divides.
Ari Altstedter, Ainsley Thomson, and Prashant Gopal – Bloomberg
The shock that rippled through global housing markets as central banks rapidly raised interest rates last year has given way to a cold new reality: The real estate bonanza that fueled wealth for millions of people is over. Markets around the world are caught between sharply higher borrowing costs – likely here to stay – and a shortage of homes that’s keeping prices elevated. That’s made housing in many areas even less affordable, while property owners with resetting loans face increasing financial strain.

Europe Inc. Nurses $5.7 Billion Loss in Worst FX Pain Since 2020; Euro mentioned as most impactful among European corporates; North American firms took $14 billion hit, Kyriba says
Carter Johnson – Bloomberg
Get The Weekly Fix for the latest fixed income news, charts and analysis from the Bloomberg Markets team. Sent every Friday.
European multinationals doing business abroad suffered the biggest hit to earnings from currency volatility in nearly three years, forcing corporate treasurers to be more vigilant in their hedging strategies.

If You’re in Cash, You Risk Missing Out, Bond Managers of $2.5 Trillion Say; Capital Group, DoubleLine, Pimco, TCW speak in interviews; Past month shows missed opportunity from sticking to cash
Michael Mackenzie – Bloomberg
For investors stashing record sums in cash, US bond managers overseeing a combined $2.5 trillion have a bit of advice: It’s time to put that money to work. That’s the message from Capital Group, DoubleLine Capital, Pimco and TCW Group. And it comes as many fixed-income managers are still licking their wounds following a tough year that’s seen the bond market trail ultrasafe T-bills and money-funds carrying the highest rates in decades.

Environmental, Social and Corporate Governance

Kerry teases new U.S. fusion energy ambitions
Alan Neuhauser – Axios
Climate envoy John Kerry previewed new U.S. ambitions for producing nuclear fusion energy during a visit to Massachusetts on Monday. Why it matters: The full announcement at the COP28 summit later this month is expected to coincide with a renewed U.S. effort to deploy nuclear energy – a campaign whose targets may be hard to achieve without fusion projects. Driving the news: Kerry yesterday visited Commonwealth Fusion Systems, where he alluded to “the United States’ vision for international partnerships” for producing fusion energy.”The first ever modern strategy – fusion strategy – for the United States,” the special presidential envoy for climate said in remarks at Commonwealth’s headquarters in Devens, Massachusetts. The administration plans to make a full announcement on Dec. 5 at the COP28 summit in Dubai.

***** Other COP28 headlines, from Reuters, The Business Times, Bloomberg, Renewables Now, and The Sierra Club. ~SAED

Oil producers accused of stalling progress on plastics pollution treaty; Countries including Saudi Arabia, Russia and Iran push for waste management rather than curbing plastic production
Kenza Bryan and Madeleine Speed – Financial Times
Oil-producing countries have stalled efforts to draft the first legally binding international agreement on cutting plastic pollution, proposing to move the focus to waste management rather than scaling down production, according to official observers at week-long UN talks in Nairobi. The global gathering in the Kenyan capital was aimed at making progress on a deal for plastic equivalent to the 2015 Paris climate agreement. But the talks ended on Sunday evening without a plan to begin formal work on a draft treaty ahead of the next meeting, due to be held in Canada in April.

Northvolt in new sodium-ion battery breakthrough; Swedish start-up has developed an energy storage technology with no critical minerals including lithium which could minimise reliance on China
Richard Milne – Financial Times
Northvolt has made a breakthrough in a new battery technology used for energy storage that the Swedish industrial start-up claims could minimise dependence on China for the green transition. The Swedish group, backed by Volkswagen, BlackRock and Goldman Sachs, has developed a sodium-ion battery that has no lithium, cobalt or nickel – critical metals that manufacturers have scrambled to obtain, leading to volatility in prices.

On its own, carbon capture is not a climate change panacea; At COP this year, a commitment must be made to rapidly phasing down the use of all fossil fuels
Adair Turner – Financial Times (opinion)
The writer chairs the Energy Transitions Commission. In December, the COP28 climate conference will meet in Dubai. The event’s president, Sultan al-Jaber, has set the objective of agreeing actions that could limit global warming to 1.5C. That will only be possible if carbon emissions from the energy system, currently running at about 34 gigatonnes a year, fall rapidly to reach net zero by around 2050. There are only two ways to achieve that: either rapidly cutting the use of all fossil fuels – coal, oil and gas – or offsetting their use by capturing COâ‚‚ and storing it. The crucial question is the balance between the two.

New Carbon Accounting Alliance launched in bid to standardise emissions disclosures
Sarah George – edie
More than 30 organisations across the carbon accounting space have rallied behind a new alliance, launched in a bid to standardise emissions calculation and disclosure methodologies, thus making claims and reporting more credible.

Monster Floods Push Hong Kong to Confront a Changing Climate; The unprecedented rainfall that hit the city in September is forcing it to finally address a future where extreme weather will be more frequent.
Shawna Kwan – Bloomberg

Dirty Water and Dead Rice: The Cost of the Clean Energy Transition in Rural Minnesota; Mining the critical minerals needed for electric vehicle batteries could threaten local water supply and Indigenous culture.
Karina Atkins – Inside Climate News

Poland to receive 5 bln euros in EU green transition funds, says minister

German Budget Chaos Risks Painful Delays to Greening Industry; Spending freeze is blocking funds for EVs, steel plants; Upheaval adds to flawed energy policy, EV lag, excess red tape
Bloomberg News

ArcelorMittal eyes US LNG in search for stable gas supplies; Steel group seeks alternative source as concerns persist over high European energy prices
Shotaro Tani and Sylvia Pfeifer – Financial Times


Citi Managing Director Accuses Ex-Bosses of Assault, Harassment; Ardith Lindsey sued bank for tolerating ‘horrifying’ conduct; Citi says it will defend itself against Lindsey’s allegations
Bob Van Voris – Bloomberg
A female Citigroup Inc. equities managing director sued the bank, alleging that she endured “horrifying” sexual assault and harassment by superiors, including a senior executive who she claims threatened her and her children after she ended their relationship.

Blackstone to End Legacy Strategy That Gave Money to Hedge Funds
Nishant Kumar – Bloomberg
Blackstone Inc. is winding down a strategy that allocated capital to hedge funds ranging from Two Sigma Investments to Magnetar Capital. The Blackstone Diversified Multi-Strategy fund will shutter by the end of the year. The fund operates under the European Union’s UCITS Directive and provides investors daily access to their capital, a structure that has come under pressure. It manages about $200 million in assets, down from its peak $2.3 billion in 2018.

BNP Paribas Picks Up Hedge Fund Clients With HSBC Agreement; BNP is taking over HSBC’s hedge fund administration business; HSBC says alternatives sector continues as ‘focus of growth’
Alexandre Rajbhandari – Bloomberg
BNP Paribas SA is taking over part of HSBC Holdings Plc’s business that caters to hedge funds as the French lender looks to deepen its business with those asset managers. BNP’s securities services unit signed an exclusive agreement to take over HSBC’s hedge funds administration business, according to a statement Tuesday. The agreement allows the 25 institutional clients affected by HSBC’s decision to shut down the business to transfer their hedge fund administration requirements to BNP.

Blackstone to shut multi-strategy fund after assets fall 90%; Fund suffers £1.5bn fall in assets since end of 2019 as performance lags
Sally Hickey and Laurence Fletcher – Financial Times
Blackstone is to close a fund that offers investors exposure to a range of hedge funds and other trading strategies, after assets fell nearly 90 per cent in four years amid lacklustre returns. The US alternative asset manager has told investors it will wind down the Blackstone Diversified Multi-Strategy fund by the end of the year, the group told the Financial Times.

Hedge fund herding is worse than ever; Magnificent momentum jockeys
Robin Wigglesworth – Financial Times
The US stock market’s “Magnificent Seven” have been a headache for mutual fund managers, who have mostly eschewed them and are paying the performance price. Hedge funds have taken a different tack – in short, they yelled “YOLO” and jumped in with both feet. From Goldman Sachs this morning (their emphasis):

White-label ETF provider agreement highlights Europe challenges; HANetf and Tidal have agreed to collaborate so their respective clients can launch ETFs in the US and Europe
Steve Johnson – Financial Times

Work & Management

Disabled people must work from home to do ‘their duty’, says UK minister; People with mobility and mental health problems should work from home or lose benefits under new policy
Ben Quinn – The Guardian
People with mobility and mental health problems will be asked to work from home or lose benefits as part of what a UK government minister described today as doing “their duty”. The policy will be set out on Wednesday as part of the autumn statement amid a drive by Rishi Sunak to make changes to the welfare system, which he described on Monday as “unsustainable”. Hundreds of thousands of people will be told to look for work that they can do from home or face having their benefits cut by £4,680 a year, under plans that were first reported by the Times.

North Koreans use fake names, scripts to land remote IT work for cash
James Pearson – Reuters
Using fake names, sham LinkedIn profiles, counterfeit work papers and mock interview scripts, North Korean IT workers seeking employment in Western tech companies are deploying sophisticated subterfuge to get hired. Landing a job outside North Korea to secretly earn hard currency for the isolated country demands highly-developed strategies to convince Western hiring managers, according to documents reviewed by Reuters, an interview with a former North Korean IT worker and cybersecurity researchers. North Korea has dispatched thousands of IT workers overseas, an effort that has accelerated in the last four years, to bring in millions to finance Pyongyang’s nuclear missile programme, according to the United States, South Korea, and the United Nations.

Wellness Exchange

New ETF Tracks Developers of Obesity Drugs Amid Ozempic Hype; Founder says new fund was developed well before the frenzy; Eli Lilly, Novo Nordisk are among top holdings of HRTS
Isabelle Lee – Bloomberg
A niche issuer is launching a biotechnology exchange-traded fund whose key holdings include firms benefiting from the hype around weight-loss drugs. The Tema Cardiovascular and Metabolic ETF (ticker HRTS) tracks companies involved in the treatment of cardio-metabolic diseases – a term that links cardiovascular diseases, obesity and diabetes. The ETF, which has a novel investing mandate in the world of thematic allocations, charges a 0.75% management fee.


Over 75% of foreign money invested into Chinese stocks in 2023 has left; Traders wait for signs of strong economic rebound before buying back in
Hudson Lockett – Financial Times
More than three-quarters of the foreign money that flowed into China’s stock market in the first seven months of the year has left, with global investors dumping more than $25bn worth of shares despite Beijing’s efforts to restore confidence in the world’s second-largest economy.

Electronic Warfare Confounds Civilian Pilots, Far From Any Battlefield; Planes were built to trust GPS signals. Jamming and spoofing in the Middle East and Ukraine have diverted flights and caused inaccurate onboard alerts.
Selam Gebrekidan – The New York Times
Electronic warfare in the Middle East and Ukraine is affecting air travel far from the battlefields, unnerving pilots and exposing an unintended consequence of a tactic that experts say will become more common.

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