SEC Scrutiny Blocks Some Crypto Firms From Going Public

Jan 24, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

R.J. O’Brien shared in a post on LinkedIn that the Commodity Markets Council honored Rich Feltes with a Lifetime Achievement Award this Sunday.

RJO also congratulated its “Fixed Income Group” on its 25th anniversary. RJO was traditionally a cattle house and expanded into financial futures and more to become the largest non-bank FCM.

Intercontinental Exchange Chief Marketing Officer, Stephanie Dobbs Brown is featured in a podcast interview in AdvertisingWeek titled “Great Minds: Stephanie Dobbs Brown, Chief Marketing Officer, Intercontinental Exchange (ICE).”

There are many different tea leaves through which market watchers try to predict recessions. Today the Wall Street Journal has a story about the decline of participation in the workforce of temporary workers at companies. The story is titled “Companies Cut Temp Workers in Warning Sign for Labor Market” and the subheadline is “Employment through staffing firms has fallen for five straight months; similar pullbacks have preceded recent recessions.”

Mars Inc. is ditching its “spokescandies,” the M&M shaped characters it used in commercials to sell its products, for an “indefinite pause” while it shifts to comedian Maya Rudolph as spokesperson, The Wall Street Journal Reported. I believe that Ms. Rudolph, no known relation to our Sarah Rudolph, though both are very funny, will cost more than the spokescandies did.

The Wall Street Journal also tells us that when it comes to marriage and money, opposites attract. The subheadline of the story is “Spouses reshape each others’ financial behavior, for richer and poorer, marriage research suggests.”

The U.S. Commodity Futures Trading Commission is hiring an “Outreach and Engagement Specialist” (Office of Minority and Women Inclusion) in its Washington D.C. Office.

Tony Pettipiece is the latest to give to the JLN MarketsWiki Education GoFundMe campaign, making him a serial giver. Thank you, Tony, for your contribution and support for John Lothian News.

Don’t miss the FIA 2022 Annual ETD Volume Review on February 2 at 9:30 AM – 10:30 AM ET featuring moderator FIA Senior Vice President, Publications, Data, and Research Will Acworth and Liquidnet Global Head of Listed Derivatives Mike Du Plessis.

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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Marex North America CEO Ram Vittal Talks About Geopolitical Events, Market Disruptions and its ED&F Man Acquisition at FIA Expo 2022
JohnLothianNews.com

Ram Vittal, CEO of Marex North America, was on a panel at FIA Expo 2022 about recent geopolitical events and their effect on the markets. John Lothian News spoke with him following the panel, and he talked about market disruptions, the threat of nuclear war, and Marex’s October acquisition of ED&F Man Capital Markets Limited’s UK business.

Watch the video »

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Inside Ken Griffin’s rise to one of Wall Street’s most powerful people, and why politics could be next
Dakin Campbell – Insider
“JB? JB and I are not on speaking terms these days,” said Ken Griffin, the billionaire hedge-fund manager, referring to JB Pritzker, the Democratic governor of Illinois. Griffin was wearing a light-blue dress shirt that wrinkled around his soft belly, suit pants, and untied black Oxfords. It was around 5:30 p.m. on a hot and humid Miami day last summer. I had come to a rented WeWork space 23 floors above the palm trees and million-dollar yachts to interview Griffin about his decision to relocate from Chicago.
/jlne.ws/3XQirs9

****** I don’t believe for one minute that Mr. Griffin would go into politics himself. He is not positioned personally for it, nor has he made himself available to the public in any meaningful way that would reflect an interest in public service. This is not to say that he will not continue to have great influence on politics. He will. ~JJL

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Everything Is Also Bank Fraud; Also Mango manipulation, Musk M&A fees and skin in the ESG game.
Matt Levine – Bloomberg
Everything is bank fraud; You know my theory: Every bad thing that a public company does is also securities fraud. If there is a data breach or sexual harassment or animal mistreatment or pollution at a company, and the public finds out about it and the stock goes down, then someone will sue the company, arguing that it defrauded shareholders by leading them to believe that there wouldn’t be a data breach or sexual harassment or whatever. And this theory is weird, and people sometimes say “wait shouldn’t securities fraud be for, like, accounting misstatements, not sexual harassment?” But it is a little hard to articulate a limiting principle. If a company convinces investors that it is good, but it is in fact bad, then it has defrauded them, and badness is not limited to accounting.
/jlne.ws/3J8crH9

****** Don’t be bad. It is bank fraud, unless you only use cash. Maybe that is why criminals like to use cash.~JJL

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There Is a Bitcoin Bar in New York City for Thirsty Crypto Fans (Podcast); For Bitcoin enthusiasts and those who are curious, a place to gather, have a drink, and commiserate over the crypto winter.
Sharon Beriro and Beth Williams – Bloomberg
It’s 2023 and the crypto community is hoping to pull out of its funk and put the blowups, bankruptcies and price slumps of the last year in the rear-view mirror. While some remain hopeful – churning out ideas for a more fruitful, and perhaps community-driven, crypto future – others are still smarting from last year’s carnage. But now, both groups have a place where they can toast a revival – or drown their sorrows – at a new Bitcoin-themed bar in New York. It’s called PubKey.
/jlne.ws/3H2usEo

****** I would prefer an ether bar. The air is cleaner.~JJL

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Monday’s Top Three
Our top story Monday was Abaxx’s white paper, “Back to the Future(s): The Best Commodities Benchmarks are Still Physically Settled” on the Abaxx website. Second was Citadel’s $16 Billion Win Tops Paulson’s Greatest Trade Ever, from Bloomberg. Third was a tie between The Wall Street Journal’s Worst Avian Flu in U.S. History Is Hitting Poultry, Wild Birds, Even Bears and the Abaxx press release Abaxx submits specifications for LNG futures contracts and publishes white papers on futures on physical commodities.

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MarketsWiki Stats
27,157 pages; 242,469 edits
MarketsWiki Statistics

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Lead Stories

SEC Scrutiny Blocks Some Crypto Firms From Going Public; Companies including Circle Internet Financial and eToro have failed to secure the regulator’s approval
Dave Michaels and Peter Rudegeair – The Wall Street Journal
Crypto companies seeking to go public over the past year have faced increased scrutiny from the Securities and Exchange Commission, as financial distress and failures spread across the volatile industry. Crypto-focused companies including Bullish Global, Circle Internet Financial and eToro Group Ltd. have failed to secure the SEC approvals that are required of companies going public. The firms were seeking stock-exchange listings through mergers with special-purpose acquisition companies, an alternative path to going public that thrived in 2020 and 2021 before heightened regulatory checks and market turbulence ended the SPAC boom.
/jlne.ws/3wrkBTB

Why passive investing makes less sense in the current environment; This is an investment world that will reward much greater selectivity and dynamic asset allocation
Mohamed El-Erian – Financial Times (opinion)
Should the vehicles that investors choose to place their money be a function of the investing environment? This question is not asked often enough by investment committees, which tend to focus on asset allocation issues, model portfolios and manager selection. Yet it is a question that has become a lot more important for generating high risk-adjusted returns, particularly given the massive shift of money from active to passive investment strategies in recent years.
/jlne.ws/3Db3yca

BlackRock’s iShares regains pole position from rival Vanguard; Last year’s net ETF flows at $221bn were lower than in 2021, but Vanguard’s $214bn marked a far steeper decline
Steve Johnson – Financial Times
BlackRock’s iShares exchange traded fund arm dethroned arch-rival Vanguard at the top of the global ETF net flows leaderboard last year, returning to pole position after two years in second place. But the big two also entrenched their duopoly in the ETF industry, with nearest rivals State Street Global Advisors and Invesco suffering deeper wounds from souring market sentiment.
/jlne.ws/3D9iDe8

Crypto Exchange Kraken Names New Compliance Chief After Months of Searching; The exchange says it has hired CJ Rinaldi from rival Blockchain.com
Mengqi Sun – The Wall Street Journal
Cryptocurrency exchange Kraken said it named CJ Rinaldi as its new chief compliance officer, hiring him from rival Blockchain.com, as it continues to revamp its compliance program after a sanctions violation settlement amid increasing regulatory scrutiny of the crypto sector.
/jlne.ws/3DbmAPv

The Unknown Hedge Fund That Got $400 Million From Sam Bankman-Fried; After the collapse of FTX, prosecutors and lawyers have scrutinized its discredited founder’s huge investment in Modulo Capital.
David Yaffe-Bellany, Matthew Goldstein and Royston Jones Jr. – The New York Times
Not long before FTX collapsed in November, its founder, Sam Bankman-Fried, sent $400 million to an obscure cryptocurrency trading firm called Modulo Capital. The fledgling firm, which was founded in March and operated out of the same Bahamian compound where Mr. Bankman-Fried lived, had no track record or public profile. One of the founders, Duncan Rheingans-Yoo, was only two years out of college. His business partner, Xiaoyun Zhang, known as Lily, was a former Wall Street trader who had previously been romantically involved with Mr. Bankman-Fried, according to four people with knowledge of their relationship.
/jlne.ws/3XV3cya

Equity capital raising on European exchanges falls to its lowest since 1995; The latest Equity Primary Markets and Trading Report from AFME also shows that equity underwriting on European exchanges declined 61% in 2022 – although average daily equity trading is up 9%.
Wesley Bray – The Trade
The Association for Financial Markets in Europe (AFME) has published its latest Equity Primary Markets and Trading Report for Q4 2022, showing the lowest European equity capital raising in 2022 since 1995. The report found that equity capital raising on European markets totalled EUR89 billion, which represents a significant shift from the robust issuance observed during 2021, according to AFME.
/jlne.ws/3kz1nZr

Hedge funds are moving towards outsourced strategies to build their front-office technology, finds new research; New survey produced by Acuiti identifies a shift in hedge funds’ method of developing front-office technology stacks, with 58% now combining outsourced strategies and in-house development.
Wesley Bray – The Trade
Systematic hedge funds are experiencing shifts in how they source and develop their front-office technology stacks, with outsourcing beginning to increase, according to new findings from Acuiti. Historically, systematic hedge funds placed high value on the development of trading strategies in-house, as this was used as a means to differentiate themselves from competitors.
/jlne.ws/3Wuj9dz

‘We’re halfway through a marathon’ says DTCC as it releases document to help preparations for T+1; New paper includes suggested testing scenarios for member firms while acknowledging that the final implementation date is still up in the air.
Richard Schwartz – The Trade
DTCC has issued a comprehensive document to help clients prepare for the T+1 transition anticipated for next year. Reflecting the work done by the T+1 Industry Working Group, T+1 Test Approach: Detailed Testing Framework provides granular detail on testing T+1 changes with DTCC and other industry infrastructures and incorporates input from various market segments.
/jlne.ws/3kzbttn

The Last Look…
Colin Lambert – The FullFX
One of the challenges facing anyone trying to launch a new FX platform, or indeed to seriously grow an existing business, is that it is just so hard to get clients to move. The desire is rarely there for change, but even if it is, the logistical load is way too heavy for most firms. Generally, then, the FX platform business is a stable one, so it is interesting that two firms have apparently entered 2023 with changed brokerage structures, albeit for different reasons. What does this tell us?
/jlne.ws/3R0wxVV

Exclusive-Binance moved $346 million for seized crypto exchange Bitzlato, data show
Tom Wilson and Angus Berwick – Reuters
Crypto giant Binance processed almost $346 million in bitcoin for the Bitzlato digital currency exchange, whose founder was arrested by U.S. authorities last week for allegedly running a “money laundering engine,” blockchain data seen by Reuters show. The Justice Department on Jan. 18 said it charged Bitzlato’s co-founder and majority shareholder Anatoly Legkodymov, a Russian national living in China, with operating an unlicensed money exchange business that “fueled a high-tech axis of cryptocrime” by processing $700 million in illicit funds.
/jlne.ws/3R4cVjE

Binance Mistakenly Mixed Crypto Exchange’s Client Funds With B-Token Collateral: Bloomberg
Lyllah Ledesma – Bloomberg
Binance, the world’s largest crypto exchange by trading volume, mistakenly kept collateral for some of the crypto assets it issues in the same wallet as funds belonging to its customers, Bloomberg reported, citing an unidentified Binance spokesperson. The exchange issues 94 so-called Binance-peg tokens (B-Tokens), and reserves for almost half are stored in a cold wallet called Binance 8, Bloomberg said. The wallet contains more tokens than required for the amount of B-Tokens issued. Since the tokens are supposed to be backed 1:1, the excess indicates the collateral is being mixed with customers’ tokens, according to Bloomberg.
/jlne.ws/401AWfa

Binance Acknowledges Storing User Funds With Collateral in Error; Exchange wallet held both customer assets and reserve tokens; Binance is aware of mistake and in the process of correcting
Emily Nicolle – Bloomberg
Binance Holdings Ltd., the world’s largest crypto platform, acknowledged that it mistakenly keeps collateral for some of the tokens it issues in the same wallet as exchange customer funds. Reserves for almost half of the 94 coins that Binance issues, known as Binance-peg tokens or “B-Tokens” are currently stored in a single wallet called “Binance 8” which also holds customer assets, according to listings visible on its website on Monday.
/jlne.ws/3H7ktxx

Banks prepare for deepest job cuts since the financial crisis
Owen Walker and Katie Martin – Financial Times
Banks are gearing up for the biggest round of job cuts since the global financial crisis, as executives come under pressure to slash costs following a collapse in investment banking revenues. The lay-offs – which are expected to be in the tens of thousands across the sector – reverse the mass hirings banks made over the past few years and the reluctance to fire staff during the Covid-19 pandemic. “The job cuts that are coming are going to be super brutal,” said Lee Thacker, owner of financial services headhunting firm Silvermine Partners. “It’s a reset because they over-hired over the past two to three years.”
/jlne.ws/3ZXb7Nr

RSM International boss says she is open to merger talks with rivals; Sixth-largest global group gives indication of potential shake-ups ahead in industry structure
Michael O’Dwyer – Financial Times
The global head of RSM, the world’s sixth-largest accounting firm, has said she is open to merger talks with rivals as the profession gears up for a potential wave of consolidation or private equity buyouts. “If there’s some deal or some big conversation to be had, absolutely we’ll look at that to see what does that mean, what does that look like for us,” said Jean Stephens, RSM International chief executive in an interview with the Financial Times.
/jlne.ws/3Hu4SJy

China surpassing US in key innovation metric and evolving from ‘imitator’, Washington report says
Mark Magnier – South China Morning Post
China has often been dismissed by industrialised nations as a country that is adept at copying but weak at creating, crippled by a memorisation-based education system, excessive respect for authority and a tendency to steal intellectual property. But a study released on Monday finds that China has surpassed the US in one key measure of innovation and is making major strides in another.
/jlne.ws/3kEmiKP

Hedge fund attitudes shift on front office tech stack – Acuiti
Acuiti
Systematic hedge funds are changing long standing attitudes to how they source and develop their front-office technology stacks, a recent study by Acuiti shows. The study, Bringing the case for buy-and-build to the front office, revealed a shift in attitudes among systematic hedge funds towards sourcing and developing their front-office technology stacks.
/jlne.ws/3R1klEe

Is this the Year Jho is Arrested?
Bradley Hope – Whale Hunting
It’s been a remarkable five years on the run for Low Taek Jho, a.k.a. Jho Low, one of the world’s most infamous fraudsters. He went from one of the biggest spenders and patron of celebrities to an anonymous silhouette, playing his phones like a piano in shopping malls in China as the searches for a solution. Many of his friends from the party scenes in L.A. and New York City still nostalgically refer to him as “the Panda.”
/jlne.ws/3XDPj7V

Texas Oil Industry Paid Record $24.7 Billion in Taxes Last Year; Industry group Texas Oil and Gas Association compiled data; State’s university fund received $2.1 billion from sector
Mitchell Ferman – Bloomberg
The Texas oil and natural gas industry paid a record $24.7 billion in taxes and royalties last year, far exceeding the previous annual high of $16 billion set in 2019, according to the Texas Oil and Gas Association. The unprecedented windfall helped swell government coffers in the second-largest US state as lawmakers convene in Austin for legislative action that is only scheduled for every other year.
/jlne.ws/3kEqo5C

China Slams US on Debt Limit and Accuses Washington of Sabotage
Taonga Clifford Mitimingi and Jacob Gu – Bloomberg
China invoked the US’s brinkmanship over its own debt limit as it hit back at Treasury Secretary Janet Yellen’s criticism of Beijing’s handling of debt issues in developing countries. The criticism came from the Chinese embassy in Lusaka, Zambia, on Monday, which blasted the US over its “catastrophic debt problem” and accused it of “sabotaging” other nations’ efforts to resolve debt problems.
/jlne.ws/3WDitme

Paul Krugman says bitcoin could be losing out to the ‘pet rock of ages’ gold because scandals are denting faith in crypto
Zahra Tayeb – Insider
Some investors could be ditching bitcoin in favor of gold as crypto scandals tarnish confidence in digital assets, Paul Krugman has suggested. The Nobel Prize-winning economist noted prices for the precious metal have been much more stable than for bitcoin over the past year, even though both have drawbacks as inflation rises and the Federal Reserve aggressively hikes interest rates.
/jlne.ws/3H3KBcz

Dumb, Dumber and Leading Economic Indicators; This monthly data ritual was useful in the era of the slide rule. Now, it’s a crutch for not paying attention. How much should it matter to markets?
John Authers – Bloomberg (opinion)
Leading Economic Indicators: Why They Don’t Matter…
It sounds like a classic essay question: “Leading Economic Indicators are neither Leading nor Economic nor Indicators, yet people still care about them. Discuss.” It’s been obvious for a while that the official LEI have uses, but that calling the next move in the market is not among them. And yet they still seem to matter more than they should.
/jlne.ws/3XEB0zZ

The 2 Trillion Reasons Why Fed Tightening Isn’t So Scary; Banks and investors have a big cushion to protect them from the end of QE
Paul J. Davies – Bloomberg
Stubborn inflation means more interest-rate increases are coming from the Federal Reserve and that sounds like great news for banks. They’ve already been reporting booming net interest income: At JPMorgan Chase & Co., it was up 28% in 2022 and for Bank of America Corp., 22%.
/jlne.ws/3wmMGeR

Bankrupt Lender BlockFi to Sell Bitcoin Mining Machine-Backed Loans; The $160 million in loans are backed by around 68,000 rigs; The deadline for bidders to submit offers is Jan. 24
David Pan – Bloomberg
Bankrupt crypto lender BlockFi Inc. plans to sell about $160 million of loans backed by around 68,000 Bitcoin mining machines, according to two people familiar with the matter. The Jersey City, New Jersey-based company, which filed for protection from creditors in November, started on the bidding process for the loans last year, the people said. Some of the loans have already defaulted and appear to be undercollateralized given the current prices of Bitcoin mining equipment, according to the people. BlockFi didn’t immediately return a message seeking comment.
/jlne.ws/3H3Mcz5

Qatar Investment Authority doubles stake in Credit Suisse; Move comes as two big US investors sell down their shares in the Swiss lender
Owen Walker – Financial Times
The Qatar Investment Authority has doubled its stake in Credit Suisse, becoming the second-biggest shareholder after the Saudi National Bank and underlining the growing importance of Middle Eastern investors to the ailing Swiss bank. The move comes as US shareholders sell down their stakes in the lender, with Chicago-based Harris Associates, which was the bank’s biggest shareholder just a few months ago with a 10 per cent stake, now owning less than 5 per cent.
/jlne.ws/3XNZxlM

Ukraine Invasion

U.S. Weapons Industry Unprepared for a China Conflict, Report Says; The war in Ukraine is highlighting the inability of U.S. arms companies to replenish the military’s stocks
Gordon Lubold – The Wall Street Journal
The war in Ukraine has exposed widespread problems in the American armaments industry that may hobble the U.S. military’s ability to fight a protracted war against China, according to a new study. The U.S. has committed to sending Ukraine more than $27 billion in military equipment and supplies-everything from helmets to Humvees-since Russia’s invasion of the country last year. The infusion of arms is credited with helping the Ukrainian forces blunt Russian President Vladimir Putin’s invasion in what has become the biggest land war in Europe since World War II.
/jlne.ws/3wqFSg1

Poland ups pressure to send German-made tanks to Ukraine
Stanislaw Waszak – Agence France-Presse
Poland said Monday it was willing to send German-made Leopard tanks to Ukraine without approval, but would first seek permission from Berlin, as Kyiv presses its allies for heavy weaponry. European nations agreed to spend another 500 million euros ($540 million) to arm Kyiv in the latest boost to the multi-billion-dollar drive to help Ukraine push back Russian forces.
/jlne.ws/3Xur6Ro

Ukraine expects to get 100 Leopard 2 tanks from 12 countries, once Germany approves: Senior Ukrainian official
Tom Soufi Burridge – ABC News
Twelve countries have agreed to supply Ukraine with around 100 Leopard 2 tanks if the German government gives its consent, according to a senior Ukrainian official who spoke exclusively to ABC News. Those agreements, the source said, were made at Friday’s summit at Ramstein US Air Force Base in Germany when allied nations discussed military support for Ukraine.
/jlne.ws/3wnlE6W

US Confronts China Over Companies’ Ties to Russian War Effort; Biden team sees evidence of non-lethal aid going to Russia; US raised concerns with Beijing as PRC companies step up help
Peter Martin and Jenny Leonard – Bloomberg
The Biden administration has confronted China’s government with evidence that suggests some Chinese state-owned companies may be providing assistance for Russia’s war effort in Ukraine, as it tries to ascertain if Beijing is aware of those activities, according to people familiar with the matter. The people, who asked not to be identified discussing private deliberations, declined to detail the support except to say that it consists of non-lethal military and economic assistance that stops short of wholesale evasion of the sanctions regime the US and its allies imposed after Russian forces invaded Ukraine.
/jlne.ws/3ZZnJUo

Putin says Russian pharmacies are short on some medicines
Reuters
President Vladimir Putin said on Tuesday that there were shortages of some medicines in Russia and that prices had gone up, despite the country producing more of its own drugs. While prescription drugs are exempt from Western sanctions imposed over the war in Ukraine, their delivery to Russia has been hit by transport, insurance and customs hurdles caused by the war and other restrictive measures, industry figures say.
/jlne.ws/4008Uks

Poland Requests German Permission to Send Tanks to Ukraine; Polish premier says Warsaw expects ‘prompt’ approval; Poland’s defense minister calls on Germany to join the effort
Piotr Skolimowski – Bloomberg
Poland formally asked for Germany’s permission to send Leopard 2 battle tanks to Ukraine, adding pressure on Chancellor Olaf Scholz to grant allies approval to re-export the German-made military vehicle.
/jlne.ws/3iYFT83

Sanctions-Proof Yuan to Putin’s Rescue After Oil Cap Hits Budget; Yuan holdings enough to last several years unless oil plunges; Budget in deficit with revenue drop, higher spending amid war
Bloomberg News
The price cap on Russian crude oil exports is starving President Vladimir Putin’s budget of income, though it likely won’t force him to ratchet down spending for years thanks to a $45 billion buffer of yuan reserves. Revenue plunged when the Group of Seven’s $60 per barrel limit came into effect last month. It combined with Putin’s spending increases since the invasion of Ukraine to contribute to a record deficit in December, with Russia’s flagship blend Urals trading just around $50, or nearly a third less than a year earlier.
/jlne.ws/3wpkdF5

Exchanges, OTC and Clearing

DTCC Ramps Up Industry T+1 Testing
DTCC Connection Staff
DTCC recently issued a new, comprehensive document to help clients prepare for the transition to an accelerated settlement cycle in 2024. This latest document, T+1 Test Approach: Detailed Testing Framework, provides a deeper level of detail so firms can now prepare for testing T+1 changes with DTCC and other industry infrastructures.
/jlne.ws/3HsM5hR

The LME and OECD are co-hosting the first Auditing Summit.
LME
We are honoured to extend this invitation to you and your organization. The purpose of the summit is to brainstorm solutions to common auditing challenges in the application of standards seeking alignment with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. This summit aims to bring standard owners and auditors together to articulate the challenges and workshop solutions. The invitation is also being extended to organisations that have auditor oversight experience and relevant metal associations.
/jlne.ws/3Hs2ovm

Diligend Rebrands as Dasseti, Announces Series A Financing Led By Nasdaq Ventures; Cloud-based digital due diligence platform strengthens its strategic partnership with Nasdaq through deeper product integrations
Nasdaq
Diligend, the award-winning digital due diligence software company, today announced the rebrand of its company, now to be known as Dasseti. The rebrand comes alongside the successful close of its Series A Financing led by Nasdaq Ventures. Dasseti has demonstrated a very strong year-over-year growth trajectory since launch, adding some of the world’s leading institutional investors, consultants, and asset managers to its client portfolio over recent years. The partnership with Nasdaq Ventures enables the company to grow and support clients globally across the investment sector with innovative and unique solutions.
/jlne.ws/3HsJkNx

NYSE President Lynn Martin: Markets are ‘living, breathing ecosystems’
FOX Business
NYSE President Lynn Martin discusses IPOs in 2022, the U.S. economic recovery and global markets during her appearance on ‘Mornings with Maria.’
/jlne.ws/3GW5rdG

Dubai Stock Exchange in Talks to Attract Dual Listings, CEO Says; Dual listings are rare in the Middle East but are picking up; IPO pipeline is ‘looking phenomenally well’: DFM CEO
Farah Elbahrawy, Archana Narayanan and Julia Fioretti – Bloomberg
Dubai’s stock exchange is in talks with companies planning dual listings to attract both foreign and local investors, its chief executive officer said. The plan follows a booming year for initial public offerings in the Gulf in 2022, as investors flocked to a region that was growing even as listings elsewhere dried up under the weight of rising interest rates globally.
/jlne.ws/3WxQvIA

Clearstream and Vermeg to offer first STP tri-party collateral management solution for ECMS launch; Clearstream’s collateral management and European custody capabilities bring ultimate collateral optimisation opportunity for Eurozone banks; Vermeg’s Easy Collateral platform provides digital and cloud-based plug & play monitoring tool; Unique service to be ready as of start of the Eurosystem Collateral Management System (ECMS) in April 2024
Deutsche Boerse
Clearstream and software provider Vermeg are joining forces to provide a unique and fully-fledged STP collateral management solution connected to the Eurosystem Collateral Management System (ECMS). The European Central Bank (ECB) is introducing ECMS to unify the management of collateral of national central banks across the Eurozone. As of ECMS launch in April 2024, Clearstream will be the only Eurozone CSD offering comprehensive tri-party collateral services fully integrated into ECMS and for all the Eurozone national central banks.
/jlne.ws/3R2aI8d

EEX Press Release – Annual volumes: EEX Group consolidates leading position in global energy markets
EEX Group
In a market environment characterised by uncertainty, EEX Group in 2022 succeeded in consolidating its position as the leading exchange group for energy and commodity products and in ensuring stability in the energy market. Peter Reitz, CEO of EEX, comments: “The past year illustrates the important role of exchange trading. Open markets are essential for secure and transparent energy markets and make an important contribution to security of supply, especially in turbulent times. This was particularly evident in the gas markets in 2022, where the need for hedging instruments was exceptionally high due to the tight supply situation.” With a total volume of 6,669.5 TWh, EEX Group increased its trading volumes on the Natural Gas markets by 112% to a record high.
/jlne.ws/3Hs1OOl

Publication Of The Newsletter From The Regulatory Division
The Montreal Exchange
The Regulatory Division (the “Division”) is publishing its Newsletter for the period of July 1 to December 31, 2022. The Division publishes a semi-annual newsletter to provide general information on its regulatory activities. The Division also uses this opportunity to share best practices in regulatory compliance. You may find the Newsletter here.
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Fintech

Leading cryptocurrency options exchange Deribit selects Eventus for trade surveillance platform Eventus via PR Newswire
Eventus, a leading global provider of multi-asset class trade surveillance and market risk solutions, announced today that cryptocurrency derivatives exchange Deribit has selected the firm’s Validus platform to provide market abuse monitoring on the exchange. Headquartered in Panama City, Panama, Deribit is the world’s largest cryptocurrency options exchange by volume and open interest, with approximately 90% market share in Bitcoin and Ether options. The exchange also offers select futures on cryptocurrencies.
/jlne.ws/3JbkmDH

Big Banks Are Coming After PayPal and Apple With Digital Wallet: WSJ
Carleton English – Barron’s
The big banks are once again playing catch-up with their fintech peers. Their latest effort could achieve some success. Bank of America (ticker: BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), and four other banks are creating a digital wallet for customers to use when shopping online that will allow them to avoid typing in their debit and credit card information, according to a Wall Street Journal report Monday.
/jlne.ws/3kGgkc6

FII Launches Consultancy Service
Financial Information Incorporated
Financial Information Incorporated (FII), a leading global provider of domestic and international corporate actions and historical reference services, announced the launch of its Consultancy Service. Corporate Actions data usage, and integration are fundamental needs within the financial services industry. Until now, expertise in these areas has been difficult to obtain. FII’s Consultancy Service offers to help address your corporate actions process and data integration needs, which are critical in obtaining efficiency.
/jlne.ws/3H31S5I

Apollo-Backed Coinstar, Creditors Tap Advisers as Payments Near; Amortization payments on securities come due in April; Company issued asset-backed securities tied to its machines
Reshmi Basu, Jeremy Hill and Rachel Butt – Bloomberg
Coinstar LLC, the Apollo Global Management-backed company known for kiosks that swap coins for cash, and a group of its creditors have tapped advisers to explore options ahead of fast-approaching amortization payments, according to people with knowledge of the matter. The company is getting advice from Guggenheim Partners and PJT Partners, while a group of asset-backed noteholders is working with Houlihan Lokey Inc. and law firm King & Spalding, said the people, who asked not to be identified because the matter is private.
/jlne.ws/3iTjx80

Cybersecurity

FBI says N. Korea-related hacker groups behind U.S. crypto firm heist
Reuters
Two hacker groups associated with North Korea, the Lazarus Group and APT38, were responsible for the theft last June of $100 million from U.S. crypto firm Harmony’s Horizon bridge, the Federal Bureau of Investigation said on Monday. On Jan. 13, the groups used a privacy protocol called Railgun to launder over $60 million worth of ethereum stolen during the theft in June, the FBI said in a statement.
/jlne.ws/3XUysNO

FBI Says North Korea-Backed Groups Hacked $100 Million in Crypto; FBI blames Lazarus and APT38 outfits for Horizon Bridge attack; Billions of dollars have been lost in cross-chain bridge hacks
Sidhartha Shukla – Bloomberg
Two hacking groups linked to North Korea were responsible for the theft of $100 million in an attack on a crypto service last year, the Federal Bureau of Investigation said on Monday. The Lazarus and APT38 outfits perpetrated the June attack on US-based blockchain specialist Harmony’s Horizon Bridge, the FBI said in a statement.
/jlne.ws/3HsVHta

Crypto’s Wormhole Hacker Moves $150 Million to Tap Popular Trade; Funds flowed into token that represents so-called staked Ether; Hackers stole $320 million from Wormhole in exploit last year
Muyao Shen – Bloomberg
A digital-asset wallet linked to one of crypto’s biggest hacks has moved more than $150 million of stolen funds for the first time in months to tap a trade involving staked Ether. The crypto community on Monday began noticing blockchain data showing that the funds were converted into staked Ether and then wrapped staked Ether – tokens that are supported on the Lido decentralized finance platform.
/jlne.ws/3XOmDc4

Following A Tough 2022, Are Digital Security Stocks Finally A Buy?
Forbes
Our theme of Cyber Security Stocks had a rough 2022, declining by close to 34%, roughly in line with the broader Nasdaq-100 which was down by about 33%. There were a series of factors impacting the theme. Notably, rising interest rates and stubbornly high inflation over the year hurt high-growth high multiple tech stocks, including cyber security names. Moreover, during recent earnings calls, cybersecurity players such as Okta and CrowdStrike have indicated, in recent earnings calls, that customers, especially small businesses, are taking longer to sign deals while paring back on software-related spending.
/jlne.ws/3XxuDOJ

Despite cybersecurity being top of mind for the C-suite, data privacy is lagging, a new report finds
Sheryl Estrada – Fortune
As tech transformations-for example a business unit built around A.I. or a new app geared toward personalized customer experience-have picked up steam in recent years, so have cyber risks and data privacy concerns. But when organizations look internally for risk mitigation and compliance with data privacy laws, there’s a lack of qualified people to do so, according to a new report by ISACA, a professional IT governance association. Both technical privacy and legal/compliance teams are understaffed, enterprise privacy budgets are underfunded, and there are skills gaps. The findings are based on a global survey of 1,890 data privacy professionals who hold positions in IT, audit, compliance, and risk management, for example.
/jlne.ws/3D7V7ys

Cryptocurrencies

Sullivan & Cromwell To Continue Representing FTX in Bankruptcy Proceedings Despite Controversy
CoinDesk
A bankruptcy court judge in Delaware has given New York law firm Sullivan & Cromwell the green light to continue representing FTX during its bankruptcy proceedings. CoinDesk regulation reporter Cheyenne Ligon discusses the recent controversy about the white-shoe law firm’s potential conflicts of interest. Plus, the latest on FTX founder Sam Bankman-Fried’s recent online posts
/jlne.ws/3WsV5bf

Bankrupt crypto lender Genesis optimistic it can resolve creditor disputes
Dietrich Knauth – Reuters
A lawyer for the bankrupt Genesis Global Capital said on Monday that the cryptocurrency lender had some confidence it could resolve its disputes with creditors this week, with a goal of emerging from Chapter 11 by late May. Sean O’Neal, the lawyer, spoke at a hearing in Manhattan bankruptcy court to consider “first-day” motions for Genesis Global Capital, the crypto lending business owned by Barry Silbert’s venture capital firm Digital Currency Group.
/jlne.ws/3WyS8pm

After the collapse of FTX, Celsius and Genesis, crypto’s million-dollar question remains: Will customers see any of their money again?
Lukas I. Alpert – MarketWatch
Customers of failed crypto ventures like FTX, Celsius Network or Genesis may one day see some of their money again – but they had better be prepared to wait. Experts say that recovering money lost to fraud or the financial collapse of a company is a complex and hard-to-predict process. While often some money can be returned, it can take years to be returned to victims, and it is unlikely anyone will be made whole.
/jlne.ws/3R1ao9M

Bankrupt crypto lender Genesis optimistic it can resolve creditor disputes
Dietrich Knauth – Reuters
A lawyer for the bankrupt Genesis Global Capital said on Monday that the cryptocurrency lender had some confidence it could resolve its disputes with creditors this week, with a goal of emerging from Chapter 11 by late May. Sean O’Neal, the lawyer, spoke at an initial hearing in Manhattan bankruptcy court for Genesis Global Capital, the crypto lending business owned by Barry Silbert’s venture capital firm Digital Currency Group.
/jlne.ws/3H2115a

Swiss Bank Cité Gestion Becomes First Private Bank to Tokenize Its Own Shares
Asa Sanon-Jules – CoinDesk
Cité Gestion, an independent Swiss private bank founded in 2009, is using Taurus technology to tokenize its own shares as the bank delves deeper into blockchain technology. The move will be the first by a private bank to issue shares as ledger-based securities under Swiss law, the company said in a press release. Cité will be partnering with digital assets firm Taurus to issue its tokenized shares, as well as manage the smart contract that creates the shares and perform asset servicing of its securities, according to the statement. Tokenization, or the digitization of various asset classes, has been a popular trend among financial institutions since it allows TradFi players to attract more investors by using blockchain technology. “Taurus believes that digitization of private assets and securities is becoming the new standard in the digital asset industry,” Taurus said in the statement.
/jlne.ws/3XUttNm

In Wake of FTX, New York Reminds Crypto Firms to Segregate Customer Funds
Sandali Handagama – CoinDesk
New York’s top financial regulator on Monday published guidance for crypto companies to improve customer protection in the event of insolvency or a similar proceeding – including a requirement for firms to keep customer funds separate. The New York Department of Financial Services (NYDFS) reiterated its requirements for record-keeping as a number of crypto entities, including Sam Bankman-Fried’s FTX exchange, is undergoing bankruptcy proceedings in the U.S.
/jlne.ws/3H1FsBW

New York’s financial regulator takes aim at firms co-mingling crypto funds
Hannah Lang – Reuters
New York’s chief financial regulator is set to release new guidance on Monday dictating that companies separate customers’ crypto assets from their own, after alleged co-mingling of funds at collapsed crypto exchange FTX and its affiliated trading firm Alameda Research led to billions of dollars in losses for customers.
/jlne.ws/3HqT1Mp

Bitcoin miners’ worst days may have passed, but a few key hurdles remain
Nivesh Rustgi – CoinTelegraph
Bitcoin’s mining industry has been relatively stable compared to the bearish price action and the tumultuous fallout of exchanges and lending companies. The network’s hashrate dipped slightly toward the end of 2022, primarily due to an unprecedented blizzard in the U.S., and has since recovered strongly to surpass its previous peak above 270 EH/s. It was particularly encouraging to see that the hashrate holding well above summer 2022 lows, despite the aftermath of FTX collapse.
/jlne.ws/3kBHkJW

NFT Collection Doodles Acquires Emmy-Nominated Animation Studio
Cam Thompson – CoinDesk
Whimsical non-fungible token (NFT) collection Doodles has acquired Emmy-nominated animation studio Golden Wolf, both companies said Monday. The two companies had previously worked together on Doodles’ announcement for Doodles2 at NFT NY in 2022. Terms of the deal weren’t disclosed.
/jlne.ws/3WARCY5

Politics

Spyware Finally Got Scary Enough to Freak Lawmakers Out-After It Spied on Them; NSO Group’s Pegasus software was used routinely to listen in on conversations with US, UK and EU officials, prompting investigations into abuses of its shockingly affordable military-grade surveillance.
Peter Guest – Bloomberg
Carine Kanimba used to dismiss her dad’s warnings to watch her back as parental overprotectiveness. While she knew he had enemies back in Rwanda, she was intent on enjoying her 20s, with the nights out to prove it. Someone had broken into the family home in Brussels, but she was working a finance job in New York, where the threat felt remote. “We all would say, like, ‘we get it, but we’re fine,'” she says.
/jlne.ws/3j4yaVZ

Former senior FBI official accused of working for Russian he investigated
Shayna Jacobs, Spencer S. Hsu, Devlin Barrett and Shane Harris – The Washington Post
The FBI’s former top spy hunter in New York was charged Monday with taking secret cash payments of more than $225,000 while overseeing highly sensitive cases, and breaking the law by trying to get Russian billionaire Oleg Deripaska removed from a U.S. sanctions list – accusations that shocked the cloistered world of his fellow high-ranking intelligence officials.
/jlne.ws/3ZVuer3

U.S. Supreme Court spurns attorney-client privilege fight in crypto tax probe
Nate Raymond – Reuters
The U.S. Supreme Court on Monday threw out a case about the scope of attorney-client privilege involving a law firm’s bid to withhold records from prosecutors related to a cryptocurrency-promoting client in a tax investigation. The unsigned one-sentence ruling “dismissed as improvidently granted” an appeal by an unnamed law firm of court orders holding it in contempt for not turning over records related to one of its clients in response to a federal grand jury subpoena.
/jlne.ws/3R8Wumg

Biden May Have to Act Unilaterally to Avoid Default, Khanna Says
Mackenzie Hawkins – Bloomberg
The US will not default on its debt but the Biden administration might be forced to take unilateral action to head off a crisis, Representative Ro Khanna, a California Democrat, offering several possible executive maneuvers. “The question is whether it’s going to come to unilateral action by the executive branch,” Khanna said during a meeting with Bloomberg News reporters and editors on Monday.
/jlne.ws/3ZYOFU3

Ex-Deutsche Bank Traders Rejected by Supreme Court in ‘Spoof’ Case
Greg Stohr – Bloomberg
The US Supreme Court refused to review the convictions of two former Deutsche Bank AG precious-metals traders for manipulating gold and silver prices with “spoof” trade orders. The nation’s highest court without comment turned away appeals from James Vorley and Cedric Chanu, who were each sentenced to one year and one day in prison for wire fraud.
/jlne.ws/3XA6BTk

UK to propose carbon border tax as part of steel industry aid package; Chancellor Jeremy Hunt agrees to consult on ways to level playing field against foreign competitors
Sylvia Pfeifer and Jim Pickard – Financial Times
The UK is to propose a carbon border tax that would place a levy on imported steel as part of a £600mn support package to help Britain’s two biggest steelmakers invest in greener technologies and avert the loss of thousands of jobs. Jeremy Hunt, the chancellor, has agreed to consult on ways to level the playing field for British Steel and Tata Steel UK against competitors based in regions with lower environmental standards or lower operating costs.
/jlne.ws/3ZZM38l

EU lawmakers to vote on tighter crypto, ESG rules for banks
Huw Jones – Reuters
Banks would have to set aside a punitive amount of capital to cover holdings of cryptoassets under a draft law due to be voted on by lawmakers on Tuesday. The European Parliament’s economic affairs committee is due to vote on cross-party compromises, seen by Reuters, on a draft law which implements remaining elements of Basel III, a global accord which forces banks to hold more capital to cope with market shocks unaided by taxpayers. One amendment states that banks would have to apply a risk-weighting of 1,250% of capital to cryptoassets exposures, meaning enough to cover a complete loss in their value.
/jlne.ws/3ZWTzkw

The Growing Comprehension Gap That Isolates Japan; The central bank governor and the market are talking at cross-purposes. It shows a country that’s both badly understood and a poor communicator.
Gearoid Reidy – Bloomberg
The Bank of Japan did exactly what it said it would do: nothing. Yet traders were stunned. The market churn after the Jan. 18 decision to keep policy unchanged, something expected by almost every economist surveyed, might seem a little odd. Blindsided in December by Governor Haruhiko Kuroda’s yield-curve control tweak, some observers had begun talking themselves into believing that not just further adjustments were possible, but that he was set to wholesale dismantle his decade-long easing program.
/jlne.ws/3GZNN9b

Regulation

What If Regulators Wrote Rules for Crypto?
Michael Selig – CoinDesk
Regulators are in no hurry to write rules for crypto. The Securities and Exchange Commission and Commodity Futures Trading Commission have brought a combined total of more than 100 enforcement actions against crypto-asset market participants. Yet, neither agency has issued a single crypto-specific rule, and it is unlikely that they will change course any time soon. But what if the agencies decided to do so? What sorts of rules could they write using their existing regulatory authorities?
/jlne.ws/3J9hpn6

Remarks of Chairman Rostin Behnam at the Commodity Markets Council 2023 State of the Industry Conference, Fort Lauderdale, Florida
CFTC
Good afternoon and thanks to the Commodity Markets Council for hosting me and my fellow Commissioners. Our full attendance highlights the importance of CMC’s focus on ensuring the optimal functioning of derivatives markets for the benefit of end-users. Your ability to manage risk safely, predictably, and without undue burdens directly impacts the prices American consumers pay for everything from food, to energy, to airline tickets and automobiles.
/jlne.ws/3HrfJ74

‘What Was Gary Gensler Really Doing?’: Rep. Tom Emmer on FTX, the SEC and What’s Next for Crypto in Congress
Jeff Wilser – CoinDesk
Just two letters. That was the tweet, gm, tweeted Representative Tom Emmer on Dec. 6, 2021, instantly endearing himself to Crypto Twitter. For those unaware, “gm,” short for “good morning,” was widely used as a cheery greeting during the bull run – morning or night – in something of an inside joke. How did Emmer learn to speak crypto? “I’m a white-haired, 61-year-old guy whose pop culture references end in 1988,” Emmer says. The “gm” idea came from a staffer.
/jlne.ws/3HqSQ3H

Bloomberg to pay $5 million to settle SEC charges related to fixed-income valuations
Chris Prentice – Reuters
Bloomberg Finance LP has agreed to pay a $5 million fine to settle charges from the U.S. Securities and Exchange Commission (SEC) over “misleading” disclosures relating to its paid subscription service, the regulator said on Monday. Bloomberg failed to disclose to customers of its BVAL service that its daily price valuations for fixed-income securities could be based on a single data input from at least 2016 to October 2022, the SEC said in a statement. That practice did not adhere to methodologies the firm had previously disclosed, the agency said.
/jlne.ws/3j0zetX

Who’s More Competitive: Wholesalers or Exchanges?
Traders Magazine
The most controversial rule among the SEC’s recent proposals will likely be its Order Competition Rule. Currently, wholesalers can buy order flow from retail brokers and provide a fill inside the National Best Bid and Offer (NBBO) without exposing the order to open market competition. In the proposed rule, Retail brokers or their wholesalers must submit orders to an eligible exchange for an auction, with the exception of orders that wholesalers can fill themselves at the midpoint price or better.
/jlne.ws/3H3ZxHK

Fee Rate Advisory #2 For Fiscal Year 2023
SEC
The Securities and Exchange Commission today announced that, starting on February 27, 2023, the fee rates applicable to most securities transactions will be set at $8.00 per million dollars.
Consequently, each self-regulatory organization will continue to pay the Commission a rate of $22.90 per million dollars for covered sales occurring on charge dates through February 26, 2023, and a rate of $8.00 per million dollars for covered sales occurring on charge dates on or after February 27, 2023.
/jlne.ws/3JcPF14

Bloomberg to Pay $5 Million for Misleading Disclosures About Its Valuation Methodologies for Fixed Income Securities
SEC
The Securities and Exchange Commission today announced settled charges against Bloomberg Finance L.P. (Bloomberg) for misleading disclosures relating to its paid subscription service, BVAL, which provides daily price valuations for fixed-income securities to financial services entities. The SEC’s order finds that from at least 2016 through October 2022, Bloomberg failed to disclose to its BVAL customers that the valuations for certain fixed-income securities could be based on a single data input, such as a broker quote, which did not adhere to methodologies it had previously disclosed. The order finds that Bloomberg was aware that its customers, including mutual funds, may utilize BVAL prices to determine fund asset valuations, including for valuing fund investments in government, supranational, agency, and corporate bonds, municipal bonds and securitized products, and that BVAL prices, therefore, can have an impact on the price at which securities are offered or traded.
/jlne.ws/3XysgLT

Outdated: Remarks before the Digital Assets at Duke Conference
Commissioner Hester M. Peirce – SEC
Thank you, Jimmie [Lenz] and Lee [Reiners] for putting together this conference and for inviting me to be part of it. I must begin with my standard disclaimer: the views I represent are my own and do not necessarily represent the views of the Securities and Exchange Commission (“SEC”) or my fellow Commissioners. I was particularly drawn to this conference because it embodies what a university discussion should be-people with different perspectives coming together to listen to and challenge one another. Our cohosts set the tone for this viewpoint diversity. Professor Lenz actively experiments with blockchain technology,”[1] while Professor Reiners is a self-proclaimed “long-time crypto skeptic,” albeit one who acknowledges “that the broader digital asset industry is not going away.”
/jlne.ws/3XWlTBR

SEC Obtains Over $5 Million Final Judgment Against Individual in Multi-Million Dollar Microcap Pump and Dump Scheme
SEC
On January 20, 2023, the U.S. District Court for the Eastern District of New York entered a final judgment against California resident Charlie Abujudeh whom the SEC had charged for his role in a microcap fraud scheme targeting retail investors. Among other things, the judgment orders Abujudeh to pay a total of over $5 million.
/jlne.ws/3XxiSrD

Home finance companies and directors to pay $150,000 for failing to cooperate with AFCA
ASIC
Home finance companies General Commercial Group Pty Ltd (formerly known as Urban Commercial Group) and Eden Capital (Australia) Pty Ltd (formerly known as Southside Lending) have each been penalised $50,000 by the Federal Court for failing to cooperate with the Australian Financial Complaints Authority (AFCA).
/jlne.ws/3ZWIDDr

Investing and Trading

Wall Street Quants Shouldn’t Confuse Luck With Skill
Aaron Brown – The Washington Post
Johannes Kepler is remembered for his seminal contributions to astronomy. However, like most 16th-century astronomers, he supported himself in part by making astrological predictions. His mentor, Michael Mäestlin, taught him to always prophesy disaster. If something bad happens, you’re celebrated for being right. If not, you’re celebrated for preventing catastrophe. Making optimistic predictions either makes you look foolish if bad things happen or be forgotten if nothing bad happens.
/jlne.ws/3kzPnXI

Transition to RFRs Review: Full Year 2022 and the Fourth Quarter of 2022
International Swaps and Derivatives Association
The Transition to Risk-free Rates (RFRs) Review analyzes the trading volumes of over-the-counter (OTC) and exchange-traded interest rate derivatives (IRD) that reference selected alternative RFRs, including the Secured Overnight Financing Rate (SOFR), the Sterling Overnight Index Average, the Swiss Average Rate Overnight, the Tokyo Overnight Average Rate, the Euro Short-Term Rate and the Australian Overnight Index Average.
/jlne.ws/3XV5s8z

Betty Liu’s SPAC to Close as Deal Hunt Fails After Holders Bail; Blank-check company saw 97% of investors swap shares for cash; Firm was led by media entrepreneur, backed by Navigation
Bailey Lipschultz – Bloomberg
D & Z Media Acquisition Corp., a blank-check firm co-sponsored by Intercontinental Exchange Inc., plans to close shop and return the cash it raised to investors after its deal hunt failed. The special-purpose acquisition company’s sponsors said the firm will liquidate this week after deciding against adding more cash to its holdings to buy additional time to close a deal. The firm expects the payout to be $10.17 per share after it raised $287.5 million in 2021 with an eye to bringing a media, education-technology or related company public.
/jlne.ws/3iZb0Aa

Elon Musk Says Proxy Advisors Hold Too Much Sway in Stock Market; ISS, Glass Lewis ‘effectively control, share market, Musk says; Rise of passive investing has concentrated shareholder voting
Richard Henderson – Bloomberg
The rise of passive investing has given third-party proxy advisors like ISS and Glass Lewis too much influence in the stock market, Tesla Inc. Chief Executive Officer Elon Musk said. “Far too much power is concentrated in the hands of ‘shareholder services’ companies like ISS and Glass Lewis, because so much of the market is passive/index funds, which outsource shareholder voting decisions to them,” Musk said in a tweet late Monday in the US. “ISS and Glass Lewis effectively control the stock market.”
/jlne.ws/3R3LYMP

Environmental, Social and Corporate Governance

How Microbes Can Help Solve the World’s Fertilizer Problems; Companies are closing in on some promising solutions in the hunt for greener plant foods.
Elizabeth Elkin – Bloomberg
Farmers depend on synthetic fertilizers to deliver the high crop yields required to meet global food demand, but that comes at a cost to the environment. Much fertilizer production relies on natural gas or coal, accounting for just over 2% of the world’s climate-warming emissions, and chemical fertilizers contribute to agricultural runoff that damages wildlife. For growers, fertilizer costs can also be wildly unpredictable, because prices are based on the availability of commodities including nitrogen, phosphorous, potassium and gas.
/jlne.ws/3XS1Vbj

The global growth story of the 21st century: driven by investment and innovation in green technologies and artificial intelligence
London School of Economics
This is a joint report from the Grantham Research Institute and Systemiq, written under the leadership of Nicholas Stern and Mattia Romani. It contends that the world has in its hands a new growth and development story driven by investment and innovation in green technology, boosted by artificial intelligence (AI) – and this is a much more attractive and inclusive story than the dirty and destructive paths followed in the past. Main messages; In the next five years more than half of the tipping points for crucial green technologies will have been met, making them competitive in key markets. The process of structural and systemic change will be multi-decadal. But this decade is decisive to limit the risk of greater climate instability. Acceleration of action now is essential. AI is creating real opportunities for this acceleration.
/jlne.ws/3Jk2OFk

Climate Is Forcing the Most Risk-Aware Industry to Reinvent Itself; The insurance industry provides many homeowners and businesses a financial safety net. Climate impacts are creating holes in it.
Akshat Rathi – Bloomberg
When it comes to climate impacts, the frontline of the finance industry is insurance. Last year’s payout from damages caused by extreme-weather events totaled $120 billion-about the same as the economic output of Kenya. And that’s a 50% increase over the previous decade’s average. It’s becoming a big problem. Insurance provides companies and individuals with the peace of mind that, for a small premium paid regularly, they will be covered for when catastrophes such as floods or wildfires hit. However, if the payouts increase because more customers are making claims, then the insurance industry either takes in lower profits or it has to increase the regular premiums customers pay.
/jlne.ws/3WyGScL

Markets Initiative builds on momentum from COP27, announces 13 action programs
Global Energy Alliance for People and Planet
Africa Carbon Markets Initiative (ACMI) launched at COP27 with the aim of dramatically scaling voluntary carbon markets across Africa by: Scaling the market to 300 million carbon credits retired annually by 2030, and 1.5 billion credits annually by 2050; Unlocking $6 billion in revenue by 2030 and over $120 billion by 2050; Supporting 30 million jobs by 2030 and over 110 million jobs by 2050; 7 countries have signed up including Burundi, Gabon, Kenya, Malawi, Mozambique, Nigeria and Togo; $200 million advanced market commitments; Announces roadmap to COP 28, including 13 action programs. Today, the Africa Carbon Markets Initiative (ACMI) announced 13 action programs. Steering committee members, made up of African leaders, CEOs, and carbon credit experts, met at Abu Dhabi Sustainability Week to build on early momentum and set out further ambitions.
/jlne.ws/401zwBm

PRI: US$4 Trillion Muni Bond Market Ripe for ESG Investing
ESG Investor
The Principles of Responsible Investment (PRI) said the US$4 trillion US municipal bond market is well-placed for ESG investing in a new report outlining opportunities. US municipal or muni bonds fund much of the US’ public services and infrastructure and often align with environmental and social goals. The report highlights growing opportunities for investors to fund climate-related projects in light of public bodies needing to raise money for climate-resilient infrastructure. It also covers the landscape of labelled muni bonds where use of proceeds are explicitly tied to environmental and social goals.
/jlne.ws/3ZT7Q1L

CECP Global Exchange Report Finds 98% of Surveyed Companies Use Voluntary Standards for ESG Reporting
Accesswire via Yahoo!
Chief Executives for Corporate Purpose© (CECP), in collaboration with the CECP Global Exchange, released the Global Impact at Scale: 2022 Edition. The study highlights international trends in corporate purpose strategies such as tracking progress on environmental, social, governance (ESG) factors; commitment to the U.N. Sustainable Development Goals (SDG); community investment; employee engagement; and more. Notably, the research underscores the continued rise of ESG integration into core businesses strategies around the world and illuminates where gains are being made and those where continued effort is needed.
/jlne.ws/3QZ6uOV

UK Looks at Carbon Levy on Steel Imports to Aid British Industry; Levy would charge for steel imports to help British firms; Some imports emit more carbon than UK-based production
Ellen Milligan – Bloomberg
UK Chancellor of the Exchequer Jeremy Hunt is considering imposing an emissions levy on steel imports to help shield British manufacturers from slumping demand and high energy prices, according to a person familiar with the matter. Hunt is looking into the possibility of adding the levy, called a carbon border adjustment mechanism, with the aim of protecting the carbon-intensive steel industry, the person said. The Financial Times first reported the plans.
/jlne.ws/3ZWMuAp

Institutions

Digital euro will be free but limited in scope, ECB says
Reuters
The digital version of the euro currency will be free to use and available to all but the European Central Bank does not want to keep any personal data on its users, ECB board member Fabio Panetta said on Monday. The ECB is working on a digital version of its currency and is in the process of outlining the broader design, also hoping to alleviate concerns that the digital currency could disrupt the financial system and give the central bank too much data on citizens.
/jlne.ws/3R1abn0

RIP the cult of the Tiger cub; Et tu, Lone Pine?
Robin Wigglesworth – Financial Times
The latest LCH Investments list of the best-performing hedge fund managers of all time is out. As we predicted a few weeks ago there’s a big change at the top. But the real action is further down the list. After racking up a frankly obscene $16bn net gain in 2022, Ken Griffin’s Citadel has ousted Ray Dalio’s Bridgewater at the top of the table. He may chew through portfolio managers like they’re rare steaks, but Ken really is the apex predator of finance today. You can read our colleague Laurence Fletcher’s full account here, and below are the rest of the top 20. Attentive readers will spot something else that has flown a little under the radar (at least ours).
/jlne.ws/3QYGH9u

Credit Suisse Backer Qatar Investment Authority Ups Its Stake
Myriam Balezou – Bloomberg
The Qatar Investment Authority boosted its stake in Credit Suisse Group AG to 6.87%, according to a filing from the sovereign wealth fund. With the purchase, QIA becomes the Swiss bank’s second largest shareholder – just behind the Saudi National Bank – after Credit Suisse issued new shares as part of a 4 billion Swiss franc ($4.3 billion) capital raise it completed in December.
/jlne.ws/3kCrz5s

Hedge Fund Eisler Hires Ex-Goldman Partner to Recruit Traders; Alain Marcus takes new role of hiring and developing talent; Eisler is transforming into multi-strategy investment firm
Nishant Kumar – Bloomberg
Eisler Capital has hired former Goldman Sachs Group Inc. partner Alain Marcus to recruit traders for the hedge fund as it transforms itself into a multi-strategy investment firm. Marcus will handle talent acquisition and development at London-based Eisler in the newly created role, according to an internal memo seen by Bloomberg. “These two functions are critical for building a market leading organization,” the firm said in the memo sent by founder Edward Eisler.
/jlne.ws/3kCcLE6

Vidrio Financial and Qontigo announce expanded partnership to accelerate risk management solutions for public and private market allocators
Qontigo
Vidrio Financial (‘Vidrio”), a provider of managed data services and software for global institutional allocators, today announced the expansion of their existing partnership with the leading global provider of risk solutions, Qontigo, to work more closely together and provide enhanced risk solutions to the multi-asset class institutional allocator market. The Vidrio platform includes a sophisticated risk system that computes risk figures regardless of transparency level (time series or positions) for institutional investors allocating to third-party funds. Through this partnership, Axioma Risk: Elements are integrated into Vidrio’s platform to offer deeper and customized insights into portfolio holdings and risk. In addition, Vidrio will also offer integration with the Axioma Portfolio Optimizer, a leading portfolio construction solution.
/jlne.ws/3R4Pwyt

NYC, Goldman Sachs Launch Effort to Give Struggling Small Businesses a Lift; The $75 million fund is city’s largest public-private program; Loans to be offered at fixed below-market interest rate of 4%
Skylar Woodhouse – Bloomberg
New York City Mayor Eric Adams on Monday will announce a new partnership with Goldman Sachs Group Inc. and Mastercard Inc. that will create the largest public-private loan fund for small businesses in the city’s history.
/jlne.ws/40bS8yX

Robert Iger, Henry Kravis to Buy Minority Stake in Thrive Capital; Group of five investors is paying about $175 million for 3.3% of venture firm
Berber Jin – The Wall Street Journal
Venture firm Thrive Capital is selling a stake to a group of investors including Walt Disney Co. CEO Robert Iger and KKR & Co. co-founder Henry Kravis, a rare move designed to expand its investing reach and give the founders of the startups it backs access to some of the world’s most powerful business figures.
/jlne.ws/3H1EW6J

Work & Management

Northern Trust cutting up to 400 jobs as investor ire grows over spending
Steve Daniels – Crain’s Chicago Business
Northern Trust is eliminating 300 to 400 jobs in early 2023. Are more cuts to come? Chicago’s largest locally headquartered bank is under investor pressure to clamp down on costs after a quarter that bank executives themselves called “unacceptable” in terms of expense growth outpacing revenue growth. Northern recorded $32 million in fourth-quarter severance costs in preparation for the headcount reduction. Severance in 2021 totaled just $8 million, according to investor disclosures.
/jlne.ws/3Wz3Hgt

Winklevoss Twins’ Gemini Trust Cuts Another 10% of Workforce; Gemini is listed as the largest creditor in Genesis bankruptcy; Customers haven’t been able to access funds in lending product
Vildana Hajric – Bloomberg
Gemini Trust Co. is eliminating another 10% of its workforce, according to a person familiar with the matter, as the digital-asset firm founded by billionaire twins Tyler and Cameron Winklevoss remains pressured by a monthslong industrywide slump. The New York-based company previously announced the firing of 10% of its staff in June after the collapses of the Terra stablecoin ecosystem and Three Arrows Capital hedge fund sent token prices tumbling.
/jlne.ws/409sDya

Big Tech Is Going to Regret All These Layoffs; Alphabet, Microsoft, Salesforce and more are reacting to economic worries in similar ways. Not all of them will be productive.
Jessica Karl – Bloomberg
It feels like Big Tech is going through a midlife crisis. We’re seeing all the telltale signs: Frequent changes in mood. Impulse decisions. Feelings of regret worse than when Kylie Jenner incorrectly named her son. Just today, Spotify dropped 6% of its workforce, Microsoft invested $10 billion in OpenAI, and Salesforce cozied up with activist investor Elliott.
/jlne.ws/3J9D26G

Skills and wage gaps in the low-carbon transition: comparing job vacancy data from the US and UK
London School of Economics
What are low-carbon jobs and where are they emerging? What skills are needed to fill these roles and are they already present in the labour force in the right locations? Do low-carbon jobs pay a good wage? How can we ensure workers in jobs at risk from the low-carbon transition are not left behind? This report provides a detailed characterisation of low-carbon jobs from the last decade in the United States and the United Kingdom. It brings new evidence to support policy discussions. The report draws out the characteristics of low-carbon jobs in general, and aspects that are driven by distinctive national patterns. It summarises findings from a recent Grantham Research Institute working paper by Saussay et al. (2022) that uses online job vacancy data to develop a novel methodology to precisely identify low-carbon jobs and characterise the skill requirements and other attributes of low-carbon jobs in the US between 2010 and 2019. It then presents and compares these findings with new results from a similar analysis on the UK carried out for the period 2012 to 2021.
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Remote Work Saves Global Commuters 72 Minutes a Day, Study Finds; Chinese lead with 102 minutes saved, US workers save 55; Extra time devoted to work, leisure and caregiving, study says
Michael Sasso – Bloomberg
Working from home is saving commuters around the world 72 minutes a day, time they’re splitting between their jobs, leisure and caregiving, a new study shows. Remote staff are saving the most time in China, where forgoing the trek to and from one’s workplace is freeing up 102 minutes a day, according to the study published this month by the National Bureau of Economic Research. Serbian workers saw the smallest savings of 51 minutes, while those in the US also saw a comparatively low 55 minutes spared.
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Big Tech Layoffs Are Hitting Diversity and Inclusion Jobs Hard; Companies that made promises to hire more underrepresented groups are gutting departments meant to achieve those goals.
Kelsey Butler – Bloomberg
At Twitter, the diversity, equity and inclusion team is down to just two people from 30, one former employee said. A DEI worker who was let go from a popular ride-share company said their job search has stalled as other technology companies assess their finances. And just before getting the axe at separate tech giants this fall, two DEI specialists said leadership had stopped setting long-term goals for their departments entirely.
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The renewable energy transition is creating a green jobs boom; 12.7 million people work in the global renewable energy sector, according to the International Renewable Energy Agency.
Stefan Ellerbeck – Greenbiz
The energy crisis is affecting billions of people around the world, as soaring prices have made it more expensive to power homes and businesses. However, the current crisis has also accelerated the rush for renewable energy, as countries across the world scramble to develop more secure, as well as more sustainable power sources. This is having a consequent knock-on effect on new job creation in the renewable energy field. Worldwide employment in the sector grew by 700,000 from 2020 to 2021, reaching 12.7 million jobs, according to the International Renewable Energy Agency (IRENA).
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Wellness Exchange

Why residents of Wuhan, the city where pandemic started, began to question China’s Covid-19 strategy
Sylvia Ma – South China Morning Post
Wuhan teacher Mary Ma was surprised to learn last January that no one in her son’s office in Canada was too worried about getting infected with the Omicron variant of the virus that causes Covid-19 and that their lives had largely returned to normal. The 52-year-old then began to have doubts about the way the epidemic was being handled at home after seeing shops, including one she had frequented for years, close down at the height of China’s strict zero-Covid strategy. She started to wonder whether such restrictions were going overboard.
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US drug shortages could worsen in coming months because of China’s health crisis, expert says
Khushboo Razdan – South China Morning Post
Pharmacies across the US have been running low on some key generic and prescription drugs for months now. While healthcare providers point to increasing demand due to a “tripledemic” of respiratory viral infections- flu, Covid and RSV – as the immediate reason, the shortages go beyond seasonal infections. And experts say that the situation could get worse due to the Covid crisis now roiling China, one of the biggest US suppliers of generic drugs and pharmaceutical ingredients, but that “nearshoring” – doing business with manufacturers in other countries much closer to the US – won’t help any time soon either.
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Long Covid could be longer – and more severe – than we thought, study finds
Echo Xie – South China Morning Post
It is estimated that tens of millions of people worldwide are suffering with symptoms that have come to be known as long Covid. According to a new study by a group of researchers from the United States, the impact of long Covid – or post-Covid conditions (PCC) – may be more severe than earlier thought. In a review of 200 studies published in the peer-reviewed journal Nature Reviews Microbiology on January 13, the team called for more research and care for patients with long Covid symptoms, adding that there was not enough existing research to properly understand or treat the condition.
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Regions

Chinese City Experiences Coldest Temperature in Nation’s Records; The temperature in Mohe, a city in northern China’s Heilongjiang province, dropped to -53C (-63.4F) on Jan. 22.
Coco Liu – Bloomberg
A cold spell that spread across China last week broke records on Sunday, the coldest day the country says it has ever documented. The temperature in Mohe, a city in northern China’s Heilongjiang province, dropped to -53C (-63.4F) on Jan. 22, according to a post published on the official social media account of the Heilongjiang Meteorological Bureau. That beat the country’s previous record low of -52.3C (-62.1F), which occurred in 1969. Twelve weather stations in Heilongjiang also reported temperatures close to or below their own low-temperature records this past weekend, the bureau said.
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Chalmers University of Technology’s quantum computer becomes available to industry
Innovation News Network
A cutting-edge quantum computer developed at Chalmers University of Technology in Sweden is to become accessible for researchers and companies in the country thanks to sizeable funding. Additional funding financed by the Knut and Alice Wallenberg Foundation will enable experts at Chalmers to manufacture a copy of the university’s quantum computer, making it available to industry in Sweden. In addition to producing the technology, the SEK 102 million funding will help to pioneer a ‘quantum helpdesk’ that will allow companies and researchers to solve problems using quantum technology.
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