Miami International Holdings and MGEX Announce Plan of Merger

Aug 14, 2020

First Read

Hits & Takes
By JLN Staff

During the pandemic, I signed up for prescriptions by mail through Walgreens. These drugs are very important to my continued well-being and health and they are sent through the U.S. mail. If the moves by President Trump to hamper mail delivery in the U.S. to aid his election interferes with my prescription delivery, I am going to be put at risk and just a little unhappy. I am sure I am not the only one who uses prescriptions by mail to avoid going to the drug store and exposing myself to the potential of getting COVID-19. The U.S. Post Office is an important element of our democracy and is even in Article I, Section 8, Clause 7 of the U.S Constitution. The unintended consequences of President Trump’s political moves concerning the Post Office could have real life and death consequences for some of us U.S. citizens and others who depend on the mail for their prescription deliveries.

The CME Group is moving back to the Whaley options model from the Bachelier options model on August 31, 2020 for a bunch of energy futures. HERE is the press release with the list of contracts impacted. The Bachelier options model allows for negative pricing and was adopted by the CME Group days before crude oil plummeted to negative prices in April.

Former CBOT Member Warren Smith has passed away at the age of 74. Smith was a classic CBOT member, graduating from Fenwick High School, the University of Notre Dame and founding his own clearing firm, Celtic.

The Trend Exchange is getting ready to make some news again. They were sidetracked back in 2011 with the passage of Dodd-Frank, which outlawed trading in movie receipt futures. That was going to be Trend Exchange’s initial product. Stay tuned.

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

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The FIA has released its July 2020 Highlights, which include the worldwide volume of exchange-traded derivatives coming in at 3.85 billion contracts in the month of July, down 3% from the previous month but up 33% from July 2019. On a year-to-date basis, volume in the first seven months of the year was 25.72 billion contracts, up 32.2% from the first seven months of 2019. Total open interest at the end of July was 942.4 million contracts, up 3% from the previous month and up 2.6% from a year ago. You can go here to download the full release.~SR

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A Zoom Interview with Scott Morris of Blackthorne Capital Management
JohnLothianNews.com

John Lothian News interviewed Scott Morris of Blackthorne Capital Management ahead of the launch of a new fund offered through Efficient Capital Management.

Blackthorne Capital Management partnered with the University of Wisconsin at Whitewater to develop a trader tool kit that would allow someone to construct complex trading strategies without having to be a programmer.

Morris was hired by Peter Layton, the founder of Blackthorne, to help develop some trading strategies, which he did using alternative data from Social Media Analytics and Predata.

Blackthorne is starting a fund through Commodity Pool Operator Efficient Capital Management, with Blackthorne being the Commodity Trading Advisor. Here is the interview by John Lothian, publisher of John Lothian News.

Watch the video »

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Art Margulis – Open Outcry Traders History Project – MarketsWiki Education
JohnLothianNews.com

Art Margulis answered a job advertisement in the Chicago Tribune for a research analyst position at the Chicago Board Options Exchange after graduating from Princeton. That was his entry into the world of open outcry trading.

At the CBOE, Margulis met Blair Hull, who was in the process of starting up his own firm, Hull Trading, and needed a research analyst. Margulis joined Hull Trading and progressed to become a trader and eventually a partner in the firm.

At Hull, they were early pioneers in the team trading approach and Margulis helped Hull develop traders in Chicago’s trading pit and beyond. Margulis only traded in the CBOE’s SPX pit for the equivalent of three years but was on a membership badge for many more.

After Hull Trading was sold to Goldman Sachs, Margulis joined Goldman. However, he would go on later to found his own firm, Cognitive Capital. Here is the story of Art Margulis for the MarketsWiki Education Open Outcry Traders History Project.

Watch the video »

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Fractional Shares Expose Wall Street Greed; Anyone who has only $5 to invest should not be buying stock.
Jared Dillian – Bloomberg
It used to be that novices went about investing the right way. They bought low-cost mutual or exchange-traded funds using the dollar-cost averaging strategy and held them for years. But a gigantic stock market rally since late March seems to have inspired millions of new investors. And instead of being confined to relatively safe, stodgy funds, they now have the ability to buy so-called fractional shares, or less than one share of stock. This is giving more people access to the stock market than ever before. I would not characterize this as progress.
/bloom.bg/3fUoJAD

****I believe the greed of Wall Street is evident without fractional shares, but they sure are another example. Welcome to the Bitcoin era of trading, where things can be broken into tiny pieces.~JJL

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Candace Parker to Atlanta’s Kelly Loeffler: ‘BLM is not a political statement, it’s a moral stance’
USA TODAY
SportsPulse: Mackenzie Salmon connected with WNBA superstar Candace Parker to discuss the current state of the league and their involvement in social justice issues. She also shared her thoughts on the conflict between the players and Kelly Loeffler.
/yhoo.it/2PSK4zW

******Two different languages, politics and morality.~JJL

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Thanks to coronavirus and Zoom, we’re looking at the end stages of college as a commodity
Megan McArdle – Washington Post
A pandemic is an essentializing force; it strips away the frosting of rhetoric and habit and forces us to confront bare realities. Nowhere is this more apparent than in higher education, which over the past few decades has been one of two sectors that have just kept increasing their prices, the share of national income and, of course, the share of our attention they claim.
/wapo.st/31Qxyqm

*****The value proposition is being challenged.~JJL

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CryptoMarketsWiki Coin of the Week: Chainlink (LINK)
Chainlink’s LINK token is now the fifth-biggest cryptocurrency by market cap, overtaking Bitcoin Cash this week. The price of LINK tokens was driven up by almost 70 percent this week after a frenzy of buying. Chainlink, whose blockchain network can be used by DeFi networks to connect to external software tools, has risen significantly in popularity this year.
bit.ly/2mbMzBY

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Thursday’s Top Three
Our top story Thursday was JLN’s Spoofing Is Not Just Bluffing: No Zero-sum Game In Trading, by Thom Thompson, a new addition to JLN’s Spoofing Special Report. Second was Retail chains are abandoning Manhattan, from The New York Times. That final paragraph is crushing. Third was ED&F Cleared To Float $1B Refinancing Plan To Creditors, from Law360.

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

Miami International Holdings and MGEX Announce Plan of Merger; MGEX to Join MIAX Exchange Group
Press Release
Miami International Holdings (MIH), the parent holding company of the MIAX Exchange Group, and the Minneapolis Grain Exchange (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today announced that they have entered into a definitive agreement and plan of merger under which MIH has agreed to acquire MGEX for a combination of cash and MIH common stock following a demutualization of MGEX by its members. As a result of the acquisition, MGEX will become a wholly owned subsidiary of MIH. MIH will continue to maintain the trading and clearing operations of MGEX, including its hard red spring wheat contract, while adding new futures products.
/bit.ly/3gWA6cX

U.S. Seized Cryptocurrency From Three Terrorist Groups
Chris Strohm – Bloomberg
About 300 accounts and $2 million were captured, DOJ says; Islamic State tried to sell fake coronavirus equipment: DOJ
The Trump administration has dismantled digital campaigns by al-Qaeda and other terrorist groups that used social media to obtain cryptocurrency for carrying out terrorist attacks, the Justice Department said Thursday. The U.S. seized about $2 million and more than 300 cryptocurrency accounts used by al-Qaeda, the al-Qassam Brigades — Hamas’s military wing — and the Islamic State of Iraq and the Levant — widely known as ISIS — in what the Justice Department said was “the government’s largest-ever seizure of cryptocurrency in the terrorism context.”
/bloom.bg/2E7yAG3

CME jumps into Cboe’s pool; The futures exchange operator is getting into the volatility business in part because another key business is slumping.
Lynne Marek – Crain’s Chicago Business
Chicago futures exchange operator CME Group is getting into the volatility business, with plans to launch a volatility index futures contract in October, the company said. CME said it will base the new contract on the Nasdaq-100 Volatility Index, VOLQ, a benchmark developed by the Nasdaq stock exchange and a local Chicago index provider, Nations Indexes.
/bit.ly/2POaR0a

CME Group plans launch of futures on Nasdaq-100 volatility index; The Nasdaq-100 Volatility Index futures contract will launch on 5 October pending a regulatory review.
Annabel Smith – The Trade
US derivatives exchange CME Group has confirmed plans to launch new futures based on the Nasdaq-100 Volatility Index (VOLQ). CME plans to launch the new VOQL futures contracts on 5 October pending a regulatory review, and the new derivatives will provide traders with expanded capabilities to hedge portfolio volatility exposure.
/bit.ly/30WNpnY

European banks lose appetite for commodity trade financing; ABN Amro and BNP Paribas are retreating amid a series of scandals, large losses and rising regulation
David Sheppard, Nicholas Megaw and Stephen Morris – FT
Some of Europe’s biggest banks are turning their backs on the business of financing the global market in raw materials, amid a series of scandals, large losses and increasing regulation. This week ABN Amro announced it was exiting commodity trade financing, a business whose roots with the Dutch bank stretch back to 1824 when King William I of the Netherlands founded its predecessor to finance the East Indies colonies.
/on.ft.com/3fUd3xN

CME Group to Launch Futures on Nasdaq-100 Volatility Index (VOLQ)
CME Group
CME Group and Nasdaq today announced plans for a new futures contract on the Nasdaq-100 Volatility Index (VOLQ). CME Group will launch its new Nasdaq-100 Volatility Index futures contracts on Oct. 5, 2020, pending regulatory review. As the world’s leading and most diverse derivatives marketplace, CME Group operates the largest equity index futures complex in the world. Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information and public company services.
/bit.ly/31OwPG4

Working on the weekend; David Mercer, CEO of LMAX Group, tells Kiays Khalil that the launch of LMAX’s new weekend currency trading service could lead to 24/7 spot trading within the next five years.
Kiays Khalil – The Trade
The chief executive of foreign exchange and cryptocurrency exchange operator, LMAX Group, has said that the firm’s introduction of weekend currency trading services for institutional investors could lead to 24/7 spot FX trading within the next five years.
/bit.ly/30TKwnS

A Chinese Netflix Faces SEC Probe After Short-Seller Report; Shares of iQiyi, which is backed by China’s top search-engine company, tumble 12%
Chong Koh Ping – WSJ
China’s iQiyi Inc., IQ -2.43% a Netflix-like video-streaming company, said it was under investigation by the U.S. Securities and Exchange Commission, sending its shares plunging 12% in after-hours trading.
/on.wsj.com/3g0aDOe

Singapore Oil Trader Hin Leong’s Founder Gets Forgery Charge
Andrea Tan and Alfred Cang – Bloomberg
OK Lim’s charge carries prison sentence of up to 10 years; Hin Leong allegedly hid $800 million in futures trading losses
The downfall of storied Singapore oil trader Lim Oon Kuin reached a new nadir Friday, with the founder of Hin Leong (Pte) Ltd. charged with abetment of forgery for the purpose of cheating, punishable by up to 10 years in prison.
/bloom.bg/30Y7MBn

China May Dismiss U.S. Sanctions. Its Banks Can’t; While officials mock, lenders are preparing to comply.
Nisha Gopalan – Bloomberg
King dollar still reigns supreme. And that means there are two ways for banks to go: the U.S. way, or the highway. Hong Kong and Chinese officials scoffed when the Trump administration imposed sanctions last weekend on 11 individuals deemed to have played a role in undermining the city’s autonomy. Luo Huining, director of the central government’s Liaison Office, noted that he had no assets abroad and offered to “send $100 to Mr. Trump for him to freeze.” Chief Executive Carrie Lam said she wouldn’t be intimidated and derided the U.S. notice for getting her address wrong. The Hong Kong Monetary Authority gave banks in the city a pass, saying they had no obligation to follow U.S. sanctions under local law.
/bloom.bg/2PRBRft

The recession is over for the rich, but the working class is far from recovered
Heather Long – Washington Post
U.S. stocks are hovering near a record high, a stunning comeback since March that underscores the new phase the economy has entered: The wealthy have mostly recovered. The bottom half remain far from it.
/wapo.st/345wlhL

Coronavirus’s Long, Deadly Plateau in the Developing World; Case numbers challenge hospitals, economies, as nations fail to flatten the curve
Juan Montes and Vibhuti Agarwal – WSJ
The intensive-care units at the Salvador Zubirán hospital in Mexico City have been operating at full capacity for three straight months—their beds filled with unconscious Covid-19 patients, positioned face down and connected to ventilators. Every person who dies or recovers is replaced within hours by another who is critically ill and in need of life support.
/on.wsj.com/33XSkH5

A Deadly Coronavirus Was Inevitable. Why Was No One Ready? Scientists warned of a pandemic for decades, yet when Covid-19 arrived, the world had few resources and little understanding
Betsy McKay and Phred Dvorak – WSJ
Hunkered around conference tables at the World Health Organization’s Geneva headquarters, a group of scientists debated which of the world’s most frightening epidemic diseases deserved the greatest attention.
/on.wsj.com/3iJ7Db4

Rising Coronavirus Infections Trigger Renewed Travel Restrictions Across Europe; New infections in some EU countries have been traced to tourists, testing the reopening of borders
Margherita Stancati – WSJ
European countries are reimposing restrictions and checks on holidaymakers in the region, in response to rising coronavirus infections among people traveling within the continent. Italy on Thursday became the latest country to introduce mandatory coronavirus testing on travelers from European countries with rising infections. Most European countries now advise their citizens against going to Spain, or to avoid coronavirus hot spots within the country, in response to a marked increase in infections there. Governments across the continent are again requiring visitors from a growing list of countries to self-quarantine.
/on.wsj.com/33Ycukr

The Calm During the Storm: An Unusual Summer of Trading; One well-known market adage is to “sell in May and go away.” The way market volumes typically fall during the summer makes it look like many investors often do follow that advice. This year, however, is different.
Phil Mackintosh – Nasdaq
One well-known market adage is to “sell in May and go away.” The way market volumes typically fall during the summer makes it look like many investors often do follow that advice.
/bit.ly/2XWGHMQ

Straits Financial LLC Establishes OTC Exotic Products Desk
Newswire.com
Straits Financial LLC (Straits) presents another exciting offering for its clients through the Structured Products Division – an (over-the-counter) OTC Exotic Products Desk. This new desk offers 24/7 access to OTC products designed to serve as a tailored risk management tool for clients with unique hedging needs.
/bit.ly/3iSFLBp

Coronavirus

We Will Pay for Our Summer Vacations With Winter Lockdowns; This was Europe’s chance to beat back coronavirus before winter comes. We’re wasting it.
Devi Sridhar – NY Times
This spring, when Western Europe became an epicenter of the coronavirus pandemic, countries imposed strict lockdowns: In France, a person needed a permit to go shopping; Spain required children to stay indoors the entire day; in Scotland and Wales, people could go outside for a walk only once a day and had to stay within a five-mile radius. Thanks to this, European countries were able to not only flatten the Covid-19 curve but to also keep levels of infection very low.

Real Businesses Snared in Hunt for Coronavirus Loan Scammers; Banks are freezing accounts of small-business borrowers on suspicion of fraud; ‘It was instantly like I was a criminal’
Peter Rudegeair and Liz Hoffman – WSJ
To get ahold of government money to help keep his small business afloat, Ryan Bolesky first had to get past three armed Secret Service agents.
/on.wsj.com/2PQor38

Covid-19 vaccine hopefuls scramble for stock market funds; CureVac of Germany sells shares in New York after strong Shanghai debut for CanSino
Camilla Hodgson, Christian Shepherd and Hudson Lockett – FT
The race to develop a coronavirus vaccine heated up on global stock markets on Thursday as shares in China’s CanSino Biologics surged on their first day of trading in Shanghai while Germany’s CureVac sold shares in New York.
/on.ft.com/30St1Ew

China targets frozen goods after Brazilian chicken tests positive; Brasília rejects claim as Beijing conducts coronavirus tests on refrigerated imports
Christian Shepherd and Emma Zhou – FT
Brazil has pushed back against Chinese claims its frozen chicken exports carried coronavirus after authorities in southern China said imported poultry from Latin America’s largest economy tested positive.
/on.ft.com/2PS9LAK

The Rush for a Vaccine Leaves Little Recourse for Anyone It Harms
Valerie Bauman and Susan Decker – Bloomberg
U.S. protected drugmakers without dedicated funds for injuries; Vaccines, while generally safe, can trigger immune reactions
Americans who suffer adverse reactions to coronavirus vaccines that the U.S. is racing to develop will have a hard time getting compensated for injuries from the drugs. That’s because pandemic-related claims for vaccines will be routed to a rarely used federal program set up to encourage drugmakers to help combat public health emergencies. It spares pharmaceutical and device makers from costly liability lawsuits in exchange for taxpayers compensating injured patients — though it doesn’t guarantee there’s funding to do so.
/bloom.bg/2PUfDtm

Covid Is Making an Emergency Fund Look Like a Great Idea; Nervous Americans are getting serious about setting aside cash for the unexpected.
Olivia Rockeman – Bloomberg
Financial advisers have been begging their clients for years to put money aside for emergencies. Americans are finally listening. The idea of the emergency fund is to make sure you have easily accessible cash — usually three to 12 months of expenses — in the event of, say, a global pandemic. Prior to March, many financial advisers had trouble persuading clients to build up a cushion, rather than buy stocks or make other investments that were either risky or tied up.
/bloom.bg/30XawyN

Bill Gates on Covid Vaccine Timing, Hydroxychloroquine, and That 5G Conspiracy Theory; The Microsoft co-founder has steered $350 million toward coronavirus projects and says we’ll turn a corner next year.
Dina Bass and Candy Cheng – Bloomberg
Bill Gates, the Microsoft Corp. co-founder and billionaire philanthropist, has become, for better and worse, a central character in the story of Covid-19. The good news: The Bill & Melinda Gates Foundation has pledged more than $350 million to fight the disease, including funds for vaccine manufacturing efforts at AstraZeneca, Johnson & Johnson, and Novavax. The bad news: Gates has been vilified by anti-vaxxers and other conspiracy theorists who claim he seeded the virus for his own nefarious purposes.
/bloom.bg/30SrUES

Fixing the Covid Food Disaster Can Slash Climate Emissions; A San Francisco startup is matching farmers to distributors to get food to hungry people and reduce greenhouse gases
Sarah McBride – Bloomberg
the end of April, Olivier Griss knew he had a problem. Coke Farm, the San Juan Bautista, Calif. business his stepfather started in 1981 where Griss now works as sales manager, was awash in a leafy salad ingredient: chicory. Specifically, treviso and castelfranco varieties that end up on plates in high-end restaurants. But high-end restaurants were largely closed, due to the Covid-19 pandemic sweeping the world.
/bloom.bg/3asR93U

Spain’s Business Leaders Fear Second Lockdown as Virus Surges
Charlie Devereux – Bloomberg
Newly-diagnosed infections jumped from previous day to 2,935; Business group warns a new lockdown would be catastrophic
The number of Covid-19 infections in Spain continued to rise, prompting warnings from business leaders about the cost to the economy if new lockdown measures have to be imposed. New cases jumped by 2,935 on Thursday compared with 1,690 in the previous 24-hour period, the health ministry said late Thursday. It was the highest tally since at least May 25 when the government changed its methodology for reporting data.
/bloom.bg/3apBBxR

U.K. Says Arrivals From France and Netherlands Must Quarantine
Robert Hutton – Bloomberg
New rules also apply to Malta, Monaco, Turks and Caicos, Aruba; Isolation requirement to take effect from 4 a.m. on Saturday
The U.K. has added France, the Netherlands and Malta to its list of countries from which people arriving have to quarantine for 14 days, a move likely to cause dismay among holidaymakers and anger from the countries involved.
/bloom.bg/3fSfzVj

CDC study sheds new light on mental health crisis linked to coronavirus pandemic
Jacqueline Howard and Andrea Kane, CNN
The Covid-19 crisis has brought with it a mental health crisis in the United States, and new data from the US Centers for Disease Control and Prevention show just how broad the pandemic’s impact on mental health might be.
/cnn.it/3gXrkLH

Russia’s Sputnik Vaccine Gamble Is All About Vladimir Putin; Russia’s speedy regulatory approval takes its efforts to win the Covid-19 vaccine race to a whole new level.
Clara Ferreira Marques – Bloomberg
There was no clearer way of signaling how Russia sees its coronavirus vaccine: Moscow named it Sputnik, after the satellite whose launch in 1957 marked the start of the space race, and forced the West to confront an unexpected, and terrifying, technology gap.
/bloom.bg/2DQgt7O

The True Coronavirus Toll in the U.S. Has Already Surpassed 200,000
Denise Lu – NY Times
Across the United States, at least 200,000 more people have died than usual since March, according to a New York Times analysis of estimates from the Centers for Disease Control and Prevention. This is about 60,000 higher than the number of deaths that have been directly linked to the coronavirus.
/nyti.ms/30VceAx

California Becomes First State to Report 600,000 Coronavirus Cases; North Korea lifted a lockdown as New Zealand extended one. Britain will require some travelers to self-isolate. France declared Paris a high-risk region for the virus.
NY Times
California on Thursday became the first state to surpass 600,000 reported coronavirus cases since the virus arrived at the beginning of the year, a New York Times database shows. With more than 10,800 fatalities, the state now ranks third in the country for the worst death toll, behind New York and New Jersey, which were overwhelmed with cases in the spring but have since managed to contain the virus’s spread.
/nyti.ms/2PPWPLx

Exchanges, OTC and Clearing

Transition Back to Whaley and Black 76 Options Pricing Methodology – Effective Trade Date August 31, 2020
CME Group
Further to Clearing Advisory 20-171 dated April 21, 2020, CME Clearing will revert its options pricing and valuation methodology, currently based on the Bachelier model, effective for trade date on Monday, August 31, 2020. Products will transition from Bachelier back to Whaley or Black 76, depending on the product.
/bit.ly/3fRvsvi

Intercontinental Exchange Announces the Election of Caroline Silver to the ICE Board of Directors
Intercontinental Exchange (ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, announced that its Board of Directors has elected Caroline Silver as a new Director effective August 13, 2020. She fills a newly created seat on the Board.
/bit.ly/2PP1KfS

SGX RegCo reports irregularities in Vibrant Group Limited’s subsidiary, Blackgold International Holdings Pty. Ltd, to relevant authorities, requires SGX-listed companies to consult SGX RegCo before the appointment of any Blackgold management
SGX
Singapore Exchange Regulation (SGX RegCo) refers to Vibrant Group Limited’s announcement of 24 January 2019 on the special audit report prepared by Ernst & Young Advisory Pte Ltd (EY).
/bit.ly/2Y1Dlbl

Dividends cut by 445 LSE-listed companies; Some yields still remain attractive even after changes, analysts say
Lucy Warwick-Ching – FT
A total of 445 companies listed on the London Stock Exchange cut, suspended or cancelled dividend payments in the first half of this year, according to new figures.
/on.ft.com/2PO6t1s

Fintech

Barchart Announces Strategic Partnership with BulkLoads.com for Commodity Transportation Marketplace
Barchart
Barchart, a leading provider of market data and technology services to the financial, media and commodity industries, has announced a new exclusive partnership with BulkLoads.com, the largest online bulk freight-matching marketplace. Through this partnership, the two firms will collaborate on product development initiatives, including the integration of BulkLoad.com’s transportation management system (TMS) into Barchart’s commodity trading platform, cmdtyView Pro, allowing shippers to manage their entire load cycle in one simplified and interactive front-end.
/bit.ly/3iE05Gm

Fintech Equality Coalition Created to Help Fight Racial Inequality in the Industry
Press Release
Leaders of the fintech industry today announced the creation of the Fintech Equality Coalition. The coalition will function as a working group to actively fight inequality both within the fintech industry as well as in society. This means enhancing access to the financial services provided by each company within the coalition, as well as job and career advancement for the Black community. The coalition believes that as leaders, they can, should, and must do more to support and build upon those efforts.
/prn.to/2PP9rTi

Drawing up the correlation between the evolution of the fintech ecosystem and Covid-19
Finextra
How important is fintech in perpetuating and augmenting financial inclusion in emerging markets? Matthew Blake, head of financial services and member of the executive committee at the World Economic Forum believes that the fintech sector’s role in banking the unbanked and underserved is vital.
/bit.ly/2PTsP1y

Five Core Drivers for the Next Fintech Evolution
Finextra
Over the past decade, fintech has greatly disrupted the way people and businesses interact with financial services. In the future, fintech trends will continue to improve the livelihood of people with meaningful and valuable technology-based financial services. This post is all about the key drivers leading fintech into the future.
/bit.ly/2PPiFPz

Cryptocurrencies

U.S. seizes millions in cryptocurrency meant for terror groups, Justice Dept. says
Devlin Barrett – Washington Post
The Justice Department announced Thursday it had seized millions of dollars’ worth of cryptocurrency meant to fund terrorist groups such as al-Qaeda and the Islamic State, in what law enforcement officials called an unprecedented crackdown against terrorist fundraising on social media. In addition to seizing funds, U.S. officials said they obtained court orders to seize 300 cryptocurrency accounts, four websites and four Facebook pages used for the alleged terrorist fundraising.
/wapo.st/3iE8U2Y

China is set to expand its digital currency testing program to large cities, including Beijing
Yogita Khatri – The Block
China’s commerce ministry has officially said that it would expand the digital currency testing program to large cities, including the capital Beijing.
/bit.ly/2PUkquS

China to Expand Testing of a Digital Currency; Testing efforts are being led by the People’s Bank of China
Eva Xiao – WSJ
China’s Commerce Ministry said it would expand a pilot program for its digital currency to include a number of large cities, advancing a pioneering initiative by a major central bank to launch an electronic payment system.
/on.wsj.com/3gVjIcE

Brainard Says Fed Is Conducting E-Money Tests for Research
Craig Torres – Bloomberg
The Federal Reserve is conducting experiments with a hypothetical digital dollar for research purposes, though it hasn’t yet committed to issuance that would require a formal policy process involving the government and other stakeholders, Governor Lael Brainard said Thursday.
/bloom.bg/3fWEcjR

U.S. Seizes Fake Website, Cryptocurrency Assets From Terrorist Groups
Dylan Tokar – WSJ
The U.S. said it seized millions of dollars in cryptocurrency assets and a fake website purporting to sell protective gear in an operation targeting the financial underpinnings of three terrorist groups. The coordinated law-enforcement action targets the donation networks of al Qaeda and the al-Qassam Brigades, Hamas’s military wing, as well as a scheme to sell N95 respirator masks to U.S. health-care providers by Islamic State in Iraq and the Levant, the U.S. Justice Department said.
/on.wsj.com/2PSYbpa

Crypto derivatives exchange BitMEX is set to implement know-your-customer procedures
Frank Chaparro – The Block
Crypto derivatives exchange BitMEX announced Thursday it would start asking users to verify their identities at the end of the month. Known for being a pioneer in crypto derivatives and high-leverage trading, BitMEX typically facilitates the trading of $1 billion worth of crypto a day, per data provided by Skew. In a blog post, the firm said it would launch its new User Verification Program on August 28. BitMEX said that “all customers will be asked to complete ID checks within the next 6 months.”
/bit.ly/31UBy9l

Boston Fed, MIT partner on central bank digital currency research project
Michael McSweeney – The Block
The Federal Reserve Bank of Boston and the Massachusetts Institute of Technology are partnering on a research effort focused on central bank digital currencies (CBDC). Federal Reserve governor Lael Brainard spoke about the initiative during an appearance Thursday. In her remarks, Brainard touched on a variety of points around the subject of CBDC and then highlighted the work between the Boston Fed and MIT. Notably, Brainard said that any code developed as part of the initiative would be made public “for anyone to use for experimentation.”
/bit.ly/3fTqCOh

DeFi project Curve launches its governance token early after anonymous developer front-run and deployed contracts
Yogita Khatri – The Block
DeFi project Curve Finance appears to have been forced to launch its DAO (decentralized autonomous organization) and governance token CRV after an anonymous developer front run and deployed smart contracts without the knowledge of the Curve team. The anonymous developer, with the handle @0xc4ad, tweeted Thursday from a newly created account that Curve’s DAO is “ready to rock.” The developer spent 19.9 ETH (~$8,000) in fees to deploy the contracts.
/bit.ly/2Y22Idg

The Federal Reserve Is Experimenting With a Digital Dollar
Nikhilesh De – Coindesk
The U.S. Federal Reserve is actively investigating distributed ledger technologies and how they might be used for digitizing the dollar. Federal Reserve Board Governor Lael Brainard said the U.S. central bank has been testing DLT over the past several years to study what a digital currency might do to the existing payments ecosystem, monetary policy, financial stability and the banking sector.
/bit.ly/3iJ74xY

China to Launch Major Expansion of Digital Currency Trials
Daniel Palmer – Coindesk
China is planning a major expansion of testing for the central bank-led digital yuan, according to a Wall Street Journal Report on Friday. The country’s Ministry of Commerce said earlier today that the digital currency – dubbed DC/EP, for digital currency/electric payment – would be trialed in major cities across the most developed regions. These include Hebei province, the Yangtze river delta, Guangdong province and the cities of Beijing, Tianjin, Hong Kong and Macau.
/bit.ly/30TwCCm

Ripple CEO Hits Out at Reports Claiming Firm Is Pivoting From Interbank Payments
Paddy Baker – Coindesk
The CEO of Ripple has firmly criticized the Financial Times for saying the creator of the third-largest cryptocurrency was moving away from wholesale cross-border payments. On Twitter late Thursday, CEO Brad Garlinghouse said “Ripple has absolutely no plans to ‘reset’ our strategy” and that banks around the world were already using the XRP token as a cross-border payment solution.
/bit.ly/2Ffsowj

CoinList suffers technical problems during rush to invest in NEAR Protocol’s token sale
Saniya More – The Block
Crypto exchange CoinList ran into technical headwinds on Wednesday as investors rushed to participate in the NEAR Protocol token sale. This was the exchange’s second attempt at hosting a NEAR token sale after having to postpone following a traffic overload earlier this week. Twitter user @AnnaRRose tweeted that CoinList had a “meltdown” while hosting the sale, giving users a 524 error display page.
/bit.ly/3fYvhhV

Politics

Trump’s Net Worth Has Declined $300 Million in the Past Year
Caleb Melby and Tom Maloney – Bloomberg
He just saw worst annual drop in wealth since replacing Obama; It’s not just the virus: Decline began as revenue fell in 2019
As the presidential election nears, American voters are sure to be asked if they’re better off financially than they were four years ago. Donald Trump isn’t. The president’s net worth has declined $300 million in the past year to $2.7 billion, erasing 10% of his fortune since he took office, according to the Bloomberg Billionaires Index.
/bloom.bg/3fQqZck

Trump-Appointed Judge Demands Evidence of Mail-in Voting Fraud
Bob Van Voris – Blomberg
A federal judge appointed by Donald Trump gave the president’s campaign one day to turn over evidence to support its claims of widespread mail-in voting fraud or admit that it doesn’t exist. The Trump campaign and Republican National Committee sued Pennsylvania Secretary of State Kathy Boockvar and local election boards on June 29 over their plan for mail-in balloting for the November 3 elections. Trump’s team claimed the plan “provides fraudsters an easy opportunity to engage in ballot harvesting, manipulate or destroy ballots, manufacture duplicitous votes, and sow chaos.”
/bloom.bg/3aqPOdW

Stimulus Talks Are Stuck in $1 Trillion Ditch Over Aid to States
Billy House – Bloomberg
Democrats warn cities and states face severe cuts to services; GOP argues money would go to bail out poorly-managed states
There’s little chance of agreement on a new federal coronavirus relief plan without a compromise on the roughly $1 trillion in aid to beleaguered state and local government that Democrats demand and the White House opposes.
/bloom.bg/3fXvPnW

Postal Service removes some mail-sorting machines, sparking concerns ahead of election
Curt Devine, Bob Ortega and Paul P. Murphy, CNN
The US Postal Service plans to remove hundreds of high-volume mail-processing machines from facilities across the country, leading some postal workers to fear they may have less capacity to process mail during election season.
/cnn.it/3aqQ4tq

Boris Johnson Has No Choice on Reopening Schools; The prime minister’s political future depends on a return to some kind of normality in Britain. Unless kids get back to the classroom, he will fail.
Martin Ivens – Bloomberg
One formerly obscure American presidential candidate, Warren G. Harding, won his place in history and his election by promising “a return to normalcy” after the disruption of World War One. Boris Johnson, fighting a far from glorious battle against Covid-19, knows that doing similar for the U.K. is key to his own future. Unless British children go back into the classroom next month, he will fail.
/bloom.bg/2FpfImN

Sen. Elizabeth Warren demands ‘corruption’ probe after report of Amazon options purchase by Postal Service chief Louis DeJoy
Dan Mangan – CNBC
Sen. Elizabeth Warren on Thursday demanded that the U.S. Postal Service’s internal ethics watchdog investigate what she suggested was “corruption” in the purchase of Amazon stock options by Postmaster General Louis DeJoy after his appointment to that job.
/cnb.cx/3haejP7

Regulation

SEC Charges Hertz’s Former CEO With Aiding and Abetting Company’s Financial Reporting and Disclosure Violations
Press Release
The Securities and Exchange Commission today charged former Hertz CEO and Chairman Mark Frissora with aiding and abetting the company in its filing of inaccurate financial statements and disclosures. Frissora has agreed to settle the charges and repay Hertz nearly $2 million in incentive-based compensation.
/bit.ly/2PPPTxZ

SEC Charges Issuer and CEO With Misrepresenting Platform Technology in Fraudulent ICO
SEC
The Securities and Exchange Commission today announced charges against Virginia-based Boon.Tech and its chief executive officer Rajesh Pavithran for fraud and registration violations in connection with a $5 million initial coin offering (ICO) of digital asset securities.
/bit.ly/340Le4K

Advisory Firm Settles Charges of Defrauding Investors, Agrees to Refund Allegedly Ill-Gotten Gains to Harmed Clients
SEC
The Securities and Exchange Commission today announced that SCF Investment Advisors, Inc. (SCF) has agreed to settle charges that it selected mutual funds and cash sweep money market funds for clients that provided undisclosed revenue to the firm’s affiliated broker-dealer and were more expensive than other available options for the same funds. The settlement includes a distribution of money to harmed clients of the Fresno, California-based investment advisory firm.
/bit.ly/2DQaFv2

Shares in China’s iQiyi and Baidu fall on SEC investigation; Video streaming platform reveals it is subject of probe following short-seller report
Ryan McMorrow and Matthew Rocco – FT
Shares in China’s iQiyi and its parent Baidu tumbled after the video streaming company disclosed that it is under investigation by the US securities regulator. In a statement late on Thursday, iQiyi said it was co-operating with the probe by the US Securities and Exchange Commission, which made a request for documents from the company following allegations by a short-seller.
/on.ft.com/3gXKrVY

Joint Statement on Enforcement of Bank Secrecy Act/Anti-Money Laundering Requirements
FDIC
The FDIC, along with the Board of Governors of the Federal Reserve System, the National Credit Union Administration, and the Office of the Comptroller of the Currency, is issuing an updated joint statement on enforcement of Bank Secrecy Act/Anti-Money Laundering (BSA/AML) requirements. The joint statement does not create new expectations or standards, but describes circumstances in which an agency will issue a mandatory cease and desist order under section 8(s) of the Federal Deposit Insurance Act to address noncompliance with BSA/AML requirements.
/bit.ly/2XZKNE1

Investing and Trading

Dave Portnoy lost ‘close to seven figures’ on controversial Remark stock
Noah Manskar – NY Post
Brash sports blog owner Dave Portnoy lost a small fortune on the controversial stock that landed him into a bitter spat with a short-seller this week, he told The Post in an exclusive interview. The Barstool Sports founder, who recently boasted that he’s a better investor than Warren Buffett, said his bet on Remark Holdings likely cost him “close to seven figures” — giving him good reason to trash the shares that investor Dan David claims he pumped and dumped.
/bit.ly/2PVtgbq

Credit investors go ‘all in’ rather than fight central banks; Safety net provided by crisis measures encourages most bullish sentiment on record
Nikou Asgari – FT
European credit investors have gone “all in”, judging that the extraordinary market-supporting measures of central banks are too powerful to fight against, according to a survey by Bank of America.
/on.ft.com/3fS4L9H

US Treasury forced to pay up to fund record stimulus; Weak demand for 30-year bond auction pushes borrowing costs higher
Colby Smith – FT
The US government faced lacklustre demand for its latest record auction of long-dated Treasury bonds, marking one of its first mis-steps in funding historic spending packages passed by US legislators since March. On Thursday, the Treasury department struggled to offload $26bn of 30-year bonds at record-low interest rates. Instead, the bonds were sold at a yield of 1.4 per cent, more than 0.02 percentage points above market expectations at the time of the auction deadline.
/on.ft.com/3amrk5t

Why Stagflation Is Back on Some Traders’ Radars
Ryan Williams – Bloomberg
Five months after the Covid-19 crisis knocked the U.S. economy off its axis, inflation seems like the last thing anyone would be worried about. If anything, deflation seems like the more here-and-now risk. But in the gold and U.S. Treasuries markets, there are signs that some investors are worried about inflation down the road. In particular, some traders are signaling concern about stagflation, a rare combination of low growth and high inflation. It’s a minority view, but here’s why it’s in the mix.
/bloom.bg/3g3nmQw

TikTok Looks Like a Dangerous Dance Move for Nadella’s Microsoft; Buying the video app’s U.S. operations would give the software giant a lift with consumers but risks unwelcome scrutiny.
Dina Bass, Shelly Banjo, Ben Brody – Bloomberg
For the better part of a decade, Microsoft Corp. has largely steered clear of the kinds of products and services that stir up controversy—it is, after all, a company whose boldest foray into social networking is the buttoned-down LinkedIn. A deal to buy the video streaming app TikTok, an idea President Trump is pushing, would change all that, landing Microsoft in the kind of political minefield it’s managed to avoid in recent years. “Microsoft has happily stayed out of the techlash so far,” says Ashkhen Kazaryan, director of civil liberties at TechFreedom, a libertarian think tank in Washington. “If they get TikTok, that’s going to change.”
/bloom.bg/3anxdz6

Environmental, Social and Corporate Governance

Currency Trader Touts Green Credentials While Founder Questions Climate Science; Neil Record’s firm says it incorporates ESG in policies and strategy, but he personally supports the U.K.’s biggest climate skeptic group.
Saijel Kishan – Bloomberg
Neil Record’s currency-trading firm has checked many of the boxes for being environmentally friendly. It has a sustainability office and seeks to align its business with United Nations sustainable goals. The company is also certified as carbon neutral and said it plans to disclose risks it faces related to global warming.
/bloom.bg/3armZxC

Institutions

Former Goldman executive appointed revenue chief at Dalzell Trading; Lance Meyerowich joins US outsourced trading firm Dalzell Trading as chief revenue officer with more than 20 years’ experience in the industry.
Annabel Smith – The Trade
US outsourced equity and options trading desk, Dalzell Trading, has appointed a former Goldman Sachs executive and veteran as its new chief revenue officer.
/bit.ly/2E5T8i9

Citigroup Pays Revlon Lenders Nearly $900 Million by Mistake; Bank asks Revlon investors to give money back after mistakenly making loan payment
Becky Yerak and Alexander Gladstone – WSJ
Citigroup Inc. paid nearly $900 million by mistake to Revlon Inc. lenders and is asking for the money to be returned, according to people familiar with the matter. Lenders that sued Revlon on Wednesday over its debt-restructuring tactics were surprised to learn Thursday they had been fully repaid on a loan issued in 2016, these people said. Citi executives were soon asking for the money back, saying it was paid inadvertently due to an operational error, the people familiar said.
/on.wsj.com/30UOMn0

Brookfield sees ultra-low interest rates boosting asset values; Canadian investment group surveys financial landscape changed by coronavirus
Mark Vandevelde – FT
The asset management giant Brookfield, whose investments range from office blocks to cell phone towers, has plunged into the red and may walk away from some of its pandemic-hit properties — but its chief executive on Thursday said he thought many of its assets could be worth more than ever.
/on.ft.com/2PO6iTQ

US ETF employees earn 60% more than European counterparts; Total pay is an average of $392,000 compared to $242,000 earned in Europe
Dawn Cowie – FT
Employees of exchange traded fund providers in Europe are paid significantly less than their US peers, according to a global ETF salary survey.
/on.ft.com/3fUeQDi

UBS Climbs to No. 2 for Australian Share Sale With One Deal
Harry Brumpton – Bloomberg
Swiss lender managing Sydney Airport’s A$2 billion share sale; Deal is second largest this year behind NAB issue in April
A share sale that kicked off this week may catapult UBS Group AG to the No. 2 spot for equity offerings in Australia and New Zealand, surpassing its peers Goldman Sachs Group Inc. and JPMorgan Chase & Co.
/bloom.bg/2DXdudz

Regions

Europe’s labour market suffers record loss of 5m jobs; Figures show coronavirus led to a 2.6% reduction in employment in the second quarter
Martin Arnold – FT
The European labour market has shrunk by a record amount in the second quarter, when the number of people employed in the EU fell by almost 5m. The 2.6 per cent reduction in employment, reported by Eurostat on Friday, underlines how coronavirus has had a dramatic impact on the region’s labour market, after many companies shed large numbers of jobs or placed a significant portion of workers on government-backed furlough schemes.
/on.ft.com/30TmYiZ

Bond Buyers Stranded in Nigeria Face Prospect of 100% Loss
Tope Alake and Anthony Osae-Brown – Bloomberg
Rates drop to 10-year low as funds rush to short-term debt; Central bank has halted dollar sales to foreigners since March
Foreign investors tempted into buying Nigerian debt paying interest of 13% a year ago are unable to move their cash out of the country. Worse still, the rate that investors now earn for lending money to the government by purchasing 12-month Treasury bills has dropped to a 10-year low of 3.2%. On top of that, the local currency has twice been devalued against the dollar this year, risking losses when the capital is repatriated.
/bloom.bg/2Q54Nkp

Gold Fever Spurs Dollar Oddity Not Seen Since Erdogan Took Power
Constantine Courcoulas, Cagan Koc, and Asli Kandemir – Bloomberg
It took weeks of frenzied gold trading in Istanbul’s historic commercial center to spur one of the biggest gaps between the cost of physical dollar bills and the official exchange rate in 18 years. Home to scores of foreign-exchange kiosks that double up as brokers for the precious metal, the Grand Bazaar is often seen as the benchmark for the country. Traders there also mostly use cash to settle gold dealings — and dollars were in short supply.
/bloom.bg/2Cv7oAS

Brexit

Taoiseach warns against ‘second systemic shock’ of no-deal Brexit
Gerry Moriarty – The Irish Times
Taoiseach Micheál Martin, after meeting British prime minister Boris Johnson, has warned of the need to avoid a “second significant systemic shock” of a no-deal Brexit coming on top of Covid-19.
Mr Martin and Mr Johnson, in their first meeting as Taoiseach and prime minister at Hillsborough Castle in Co Down on Thursday, agreed to “set to work immediately” creating new structures to deal with post-Brexit British-Irish relations.
/bit.ly/3g4Grln

UK’s Johnson Seeks to Quell Brexit Fears in Northern Ireland
NY Times
British Prime Minister Boris Johnson insisted Thursday that businesses in Northern Ireland will continue to enjoy seamless access to the rest of the U.K. after a Brexit transition period with the European Union expires at the end of the year.
“There will be no border down the Irish Sea — over my dead body,” he said on a visit to Northern Ireland, where he met the new Irish prime minister, Micheal Martin.
/nyti.ms/3fXr79Y

Miscellaneous

Fortnite Maker Epic Sues Google in Mirror of Apple Complaint
Robert Burnson – Bloomberg
Epic Games Inc. accused Google of anticompetitive behavior in a lawsuit Thursday hours after the creator of Fortnite sued Apple Inc. over similar claims. Like the earlier complaint, the suit against Google was filed in San Francisco federal court.
/bloom.bg/30TJ8l6

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