Hits & Takes
John Lothian & JLN Staff
Yesterday we published the first part of my interview with CoinDesk Deputy Editor-in-Chief Nick Baker, a former Dow Jones Newswire and Bloomberg reporter and editor who joined CoinDesk in August. Part one focuses on Baker’s background as a journalist. Baker and one of his journalists wrote one of the most consequential stories in the crypto space, which was the beginning of the cascading of events that led to the bankruptcy of FTX and the implosion of Sam Bankman-Fried’s crypto empire.
Nick is a modest, understated journalist who loves a good story and has journalism in his blood, as his grandfather was a journalist in Ohio and very influential in Baker’s life. Part two of the interview, which focuses more on the crypto story, will be published today on JohnLothianNews.com.
One of the great journalistic aspects of Baker’s story is that CoinDesk is part of the Digital Currency Group, which includes the Grayscale Trust and Genesis Global Trading. Talk of Genesis having to declare bankruptcy is said to be pushing bitcoin to new two-year lows. The independence of CoinDesk to pursue and publish a story as consequential as the FTX one is important.
I like the work CoinDesk is doing and have for a long time. They have distinguished themselves from the native crypto media firms as balanced, fair and dogged in going after stories. The first move that caught my attention was when they hired former Wall Street Journal reporter Michael Casey as their chief content officer. They have only gotten better since then. Hiring Baker (who was former Bloomberg superstar market structure and crypto reporter Matt Leising’s editor) as deputy editor-in-chief was a coup. Baker is right, CoinDesk has a group of talented, smart reporters who know the subject well, and that is reflected in the depth and breadth of their coverage.
As we approach Thanksgiving in the U.S., it was a day of apologizing yesterday for Sequoia Capital and Sam Bankman-Fried. The Wall Street Journal reported that “Sequoia Capital apologized to its fund investors for the $150 million it lost on crypto exchange FTX, said people familiar with the matter, a rare moment of contrition for the storied venture-capital firm.”
Thank you to all who have sent emails, snail mail notes, online comments and messages of condolences to me on the passing of my mother. It is overwhelming to have such support during this difficult time. While I wrote the obituary for my mother before she passed as a precaution, at the recommendation of my older brother, I now have to prepare an eulogy. I have been “voluntold” that I am delivering it on behalf of the three brothers.
This is not my first time doing this, so I know the pitfalls, including becoming choked up or “verklempt” from the emotion of it all. The trick is to keep telling jokes. Jokes clear out the sadness and fill the soul with laughter and joy. I hope I can come up with enough jokes. Thank you again. It means a lot to have so many share their stories and share kind and consoling words.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The FIA and SIFMA’s Asset Management Group are hosting the eighth annual Asset Management Derivatives Forum February 8-10, 2023, at the Ritz Carlton, Laguna Niguel, in Dana Point, Calif. Market participants from all sides of a trade and leading regulators will come together to examine the latest developments impacting the use of derivatives by asset managers, including business, clearing, regulatory and operations issues. Learn more and register here.~SAED
Russell 2000 Index quarterly chartbook – Q3
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Nick Baker’s Journalistic Bloodlines Took Him From Dow Jones to Bloomberg to CoinDesk
Nick Baker had journalism in his blood from the start. His grandfather was a journalist and an influential person in his life. When his grandfather died during Baker’s high school years, he made the split-second decision to follow a career path to journalism.
Phase II construction underway to expand Greater Chicago Food Depository
Wendell Hutson – Chicago Business Journal
Construction on the final phase of a $75 million expansion plan launched in 2019 is underway for the Greater Chicago Food Depository. A 37,000-square-foot addition is being built for the 270,000-square-foot depository, located at 4100 W. Ann Lurie Place, according to Justin Brown, president and CEO of Chicago-based Skender, the general contractor for the project.
***** This was already a massive facility, but the expansion shows the continuing need. Hats off to the FIA and all the organizations in the industry who loyally support the Greater Chicago Food Depository and the mission to feed the hungry.~JJL
FTX Collapse: ‘Emperor’ Bankman-Fried Had No Clothes; The regime of the founder of the cryptocurrency exchange was discussed in court on November 22.
Luc Olinga – The Street
A face of the regime of Sam Bankman-Fried, the founder of FTX, was revealed on November 22 during the firm’s first hearing in Delaware bankruptcy court. The 30-year-old former trader was virtually considered an “emperor” among his employees: This is the image used by an FTX lawyer to describe what happened after Bankman-Fried filed for Chapter 11 bankruptcy on his crypto empire made up of FTX and Alameda Research. Everyone realized for the “first time the emperor had no clothes,” James Bromley, co-head of the restructuring practice at law firm Sullivan & Cromwell, told Judge John Dorsey.
***** SBF had clothes, but it was only a t-shirt and a pair of cargo shorts.~JJL
The market can deliver the green transition – just not fast enough; Policymakers and governments need to work out how to accelerate the process
Martin Wolf – Financial Times
Whatever else may be wrong with economics, its starting point is correct: people do indeed respond to incentives. Suppose renewables provided the dominant technologies for energy supply; suppose, in short, that it was more profitable to use solar, wind or other renewable sources of energy than fossil fuels. Market forces would then drive the transformation of economies in a climate-protecting direction on their own.
***** One needs to be careful when trying to influence Mr. Market. The unintended consequences can be painful sometimes.~JJL
Tuesday’s Top Three
Our most read story Tuesday was the Financial Times’ opinion piece Sam Bankman-Fried and the power of dressing badly. Second was Cult of Personality with Terry Duffy of CME Group, an On The Tape podcast. Third was more of Terry Duffy, with CME Group’s CEO Called FTX’s Sam Bankman-Fried an ‘Absolute Fraud’ When They Met in March, from Bitcoin.com.
27,088 pages; 241,839 edits
The Silencing of Hong Kong’s Analysts; As China tightens its grip on Hong Kong, fear is stemming the free flow of information and driving discussion of once-routine business and economic topics underground.
Maintain three different mobile phones. Use code words when discussing sensitive subjects in calls. Evaluate the trustworthiness of those you’re speaking to. These aren’t instructions for a spy. Rather, they’ve become necessary precautions to have a frank chat with a market analyst in China – and increasingly Hong Kong. Conversations with more than 30 analysts, fund managers and executives in or connected to the financial hub reveal the extent to which self-censorship has inhibited the research community. They detail a world of paranoia, where analysts worry even mild criticism of China could see them reprimanded, lose their jobs – or worse, face charges under the powerful national security law imposed by Beijing.
Credit Suisse Warns of $1.6 Billion Loss After Clients Pull Money; Customer outflows come at a precarious time for the bank, which weeks ago launched a sweeping overhaul of its operations
Margot Patrick – The Wall Street Journal
Credit Suisse Group AG warned it would lose around $1.6 billion in the fourth quarter after customers pulled their investments and deposits over concerns about the bank’s financial health. Switzerland’s No. 2 bank by assets said outflows were around 6% of its total $1.47 trillion assets, or around $88.3 billion, between Sept. 30 and Nov. 11. Customers in its wealth-management arm-its main business serving the world’s rich-removed $66.7 billion from the bank. Credit Suisse in late October said a social-media frenzy around its health was causing large outflows.
Billionaire Barry Silbert seeks to reassure investors in his crypto conglomerate; Digital Currency Group chief writes to shareholders amid fears for broker Genesis amid FTX fallout
Nikou Asgari – Financial Times
American billionaire Barry Silbert has written to shareholders in his embattled Digital Currency Group, seeking to reassure them of its viability as fears rise for the potential bankruptcy of his crypto broker Genesis and as the fallout from the collapse of FTX reverberates through the industry. Silbert’s letter comes nearly a week after Genesis halted redemptions and new loan originations following the collapse of Sam Bankman-Fried’s crypto empire. The New York-based broker cited withdrawal requests which “exceed our current liquidity” and has since been scrambling to source funding.
Crypto Speculation Is All But Over. Its Systemic Troubles Aren’t; The decline in bitcoin looks a lot like the decline in other super-speculative assets. But more failures of crypto firms could push it lower still.
James Mackintosh – The Wall Street Journal
The first question cryptocurrency owners should be asking themselves at the moment is whether their bitcoin, dogecoin and other tokens are safe. Hold them with the wrong broker or custodian, and they might vanish into an interminable bankruptcy proceeding, perhaps never to emerge.
FTX Says Substantial Amount of Crypto Assets Stolen or Missing; The cryptocurrency platform’s bankruptcy lawyer says it was run as a ‘personal fiefdom’ of founder Sam Bankman-Fried
Alexander Saeedy and Jonathan Randles – The Wall Street Journal
A substantial amount of FTX’s assets are either missing or stolen, a lawyer for the failed crypto exchange said in court, vowing to cast a wide net to secure potentially billions of dollars in funds that passed through the firm he called the “personal fiefdom” of co-founder Sam Bankman-Fried. Tuesday’s hearing marked an inflection point for FTX’s bankruptcy case as its new leaders begin chasing down what assets they can salvage and trying to determine who might be responsible for the loss of customers’ money.
Despite Boasting Of Big Profits, FTX And Alameda Lost $3.7 Billion Before 2022
Jeff Kauflin – Forbes
Before the collapse of Sam Bankman-Fried’s crypto companies earlier this month, nearly everyone in the industry thought his startups were highly profitable. While the young entrepreneur fed that assumption, it now appears that wasn’t the case, with hefty losses dating back to at least 2021, and likely before. In a motion filed yesterday in the Delaware district court, the bankruptcy pros now managing Bankman-Fried’s companies said that the entities’ 2021 tax returns collectively showed a net operating loss carryover of $3.7 billion.
FTX Flipped One Trading Firm’s Risk Obsession. Disaster Followed; Bankman-Fried built empire that eschewed ex-employer’s lessons; He plucked Wall Street, tech talent for haphazard operation
Annie Massa, Hannah Miller, and Muyao Shen – Bloomberg
Before a cadre of Jane Street Group alumni spectacularly scorched the cryptocurrency landscape from their perch at FTX this month, the Wall Street firm was enjoying its status as the behemoth almost nobody knew about. The more-than 2,000 employee powerhouse based in lower Manhattan is known among peers for its obsession with risk and preference for stealth. It digs into the health of trading partners, models potential catastrophes, autopsies losses and restricts staff from commenting publicly, because even that poses a danger.
Genesis Balance Sheet Reveals Web of Loans Across Silbert Empire; Genesis has $2.8 billion in outstanding loans on balance sheet; Bloomberg reported earlier that Genesis sought fresh capital
Sonali Basak, Erin Hudson, Vildana Hajric and Muyao Shen – Bloomberg
The troubled brokerage Genesis Global has $2.8 billion in outstanding loans on its balance sheet, with about 30% of its lending made to related parties including its parent company, Barry Silbert’s Digital Currency Group, according to people familiar with the matter.
There’s an upside to crypto’s collapse
Katrina vanden Heuvel – The Washington Post
If there is a silver lining to the rapid and dramatic collapse of the cryptocurrency exchange FTX, it’s that it might lead to some long-awaited bipartisanship in Congress – to pass long-needed regulation of Big Tech. FTX filed for bankruptcy on Nov. 11. The company’s founder and chief executive, 30-year-old Sam Bankman-Fried, has stepped down and lawyered up. (His erstwhile attorney, who once represented Bernie Madoff’s sons, dropped Bankman-Fried citing conflicts of interest.)
Who’s Who in the FTX Inner Circle
Daniel Kuhn, Xinyi Luo and David Z. Morris – CoinDesk
The downfall of FTX was swift and brutal. In a matter of eight days earlier this month, the crypto exchange – developed as a skunk-work project inside Sam Bankman-Fried’s quant-driven trading shop, Alameda Research – went from being one of the most used and valuable crypto companies ever to a pile of failed bets and worthless tokens. How exactly the firm collapsed is still a matter of investigation. Three U.S. federal agencies – the Department of Justice, Securities and Exchange Commission and Commodity and Futures Trading Commission – are probing the remains while insiders begin to speak out about a company that rose and fell like a house of cards.
Credit Suisse Saw $88 Billion Outflows as Confidence Slumped; Loss expected in wealth division and investment bank; Continues to see outflows of customer assets in fourth quarter
Marion Halftermeyer and Myriam Balezou – Bloomberg
Credit Suisse Group AG clients pulled as much as 84 billion Swiss francs ($88.3 billion) of their money from the bank during the first few weeks of the quarter, underlining ongoing concerns over the bank’s restructuring efforts after years of scandals. The Zurich-based bank warned on Wednesday that it will face a loss of up to 1.5 billion Swiss francs ($1.6 billion) for the three final months of the year, partly as a result of the decline in wealth and asset management client funds from the start of October to Nov. 11. That’s potentially the worst exodus since the financial crisis.
Bahamas FTX Liquidators Agree to Transfer Bankruptcy Case to Delaware
Sandali Handagama – CoinDesk
Court-appointed liquidators overseeing collapsed crypto exchange FTX’s assets in the Bahamas have agreed to transfer a related case they’d filed in New York to Delaware, where the company had already filed for bankruptcy protection.
Lawyers Detail the ‘Abrupt and Difficult’ Collapse of FTX in First Bankruptcy Hearing
Nikhilesh De and Cheyenne Ligon – CoinDesk
“You have witnessed probably one of the most abrupt and difficult collapses in the history of corporate America,” an attorney for FTX said during the company’s first bankruptcy hearing in Delaware on Tuesday. James Bromley of Sullivan and Cromwell, representing FTX, detailed the company’s rise and collapse in a brief presentation during the hearing, explaining how the company fell apart within the course of two weeks after a CoinDesk report showed that Alameda Research, a subsidiary of the overall FTX group, held an unexpectedly large amount of FTT tokens, issued by FTX itself.
Crypto’s Latest Mystery Is the Ownership of Major Exchange Huobi
Zheping Huang – Bloomberg
In the vexing world of cryptocurrencies, the seemingly simple question of who owns an exchange can turn out to be fiendishly tricky. Take Huobi Global, a platform with Chinese roots that has faded from global leadership but still commands notable daily trading volume of over $300 million, according to tracker CoinGecko. Huobi Global said last month that co-founder and controlling shareholder Leon Li had sold his stake in the company to a buyout firm managed by About Capital Management HK Co.
Crypto Financial Services Firm Eqonex Files for Voluntary Debt Restructuring in Singapore
Will Canny – CoinDesk
Eqonex (EQOS), a Nasdaq-listed crypto financial services firm, filed a voluntary application with the High Court in Singapore to place the company into judicial management. In a Monday filing with the U.S. Securities and Exchange Commission, Eqonex said its Hong Kong-based entity, Diginex, has been placed into creditors’ voluntary liquidation and Eqonex Capital in Singapore is also expected to enter voluntary liquidation.
Revisiting the “Magic Money Box” After the FTX Collapse; Bloomberg’s managing editor Stacy-Marie Ishmael and Odd Lots’ co-host Joe Weisenthal join forces to unravel the latest fallout in crypto.
Stacy-Marie Ishmael – Bloomberg
Have you heard the one about “the box”? In April 2022, long before Sam-Bankman Fried was tweeting rambling threads about the collapse of his FTX empire, he joined the Bloomberg Odd Lots podcast and talked about “the box.” It was his metaphor for describing the crypto practice of “yield farming”, and his description at the time raised many eyebrows because it seemed, well, too good to be true.
Goldman Sachs to pay $4mn penalty over ESG fund claims; US regulator says bank staff completed company screenings after they were already picked for portfolios
Joshua Franklin and Patrick Temple-West – Financial Times
Goldman Sachs has agreed to pay a $4mn penalty over US regulatory charges that the bank’s asset management division misled customers about environmental, social and governance (ESG) investments.
U.N. Climate Summit Defers Key Carbon-Credit Policy Decisions; Market is viewed as a crucial tool in using private capital to fund the move away from fossil fuels
Ed Ballard – The Wall Street Journal
The United Nations climate summit that just wrapped up in Egypt failed to reach agreement on some rules governing carbon credits, leaving in limbo a crucial mechanism for funneling cash to address climate change.
Illegal For 79 Years, This Loophole Lets Regular Americans Invest Alongside Silicon Valley Insiders
William Dahl – Benzinga
For 79 years, if you wanted the right to invest in early-stage companies like Apple in the 1970s, Facebook in 2004, or Airbnb in 2009, you had to be an “accredited investor.” The concept came from a 1933 law that created the U.S. Securities & Exchange Commission (SEC) to guard against some of the excesses on Wall Street that had led to the 1929 crash and the ensuing Great Depression.
Bankman-Fried Says Collateral Crashed by $51 Billion as FTX Fell; Former FTX chief executive again apologizes in letter to staff; He claims funding interest came eight minutes after bankruptcy
Joanna Ossinger – Bloomberg
Sam Bankman-Fried, disgraced founder of the now collapsed crypto exchange FTX and trading house Alameda Research, apologized to staff in a letter that outlined a crash in “collateral” to $9 billion from $60 billion. “I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again,” he wrote in the message sent to employees Tuesday and obtained by Bloomberg News.
A $300 Billion Bond Market Holds the Key to Solving the Climate Crisis
Karoline Kan, Rebecca Choong Wilkins, Sheryl Tian Tong Lee and Adrian Leung – Bloomberg
In less than a decade, China has built one of the world’s biggest green bond markets, with more potential than any other to alter the course of climate change. But as the country’s pile of green debt swells beyond $300 billion, investors and regulators are confronting a troubling reality: It’s almost impossible to know how the money is being spent – or whether it’s having the intended impact.
Opinion: ‘The consequences of inaction are severe.’ This crypto pioneer wants tough U.S. laws to prevent another FTX and stabilize digital markets.
Jeremy Allaire – MarketWatch
The public has experienced two damaging shocks this year from the digital asset industry that are a reminder of how a lack of regulatory clarity can harm U.S. consumers and U.S. economic competitiveness. The first shock came in the summer, when a complex financial derivative calling itself a stablecoin, TerraUSD – issued offshore – collapsed in a matter of days. This triggered a steep drop in the value of the entire digital asset market and led to the bankruptcies of multiple industry participants, with tens of billions of dollars in value lost.
Who Is Gary Wang, the Mysterious Co-Founder of FTX and Alameda?
Xinyi Luo – CoinDesk
The co-founder of Alameda Research and FTX; A mysterious ex-Googler who also served as chief technology officer for both firms; Reportedly Bankman-Fried’s childhood friend
Gray Wang is not like his co-founder Sam Bankman-Fried, who loves fame and putting himself at the center of public attention (even when people are begging him to stop tweeting). In fact, there’s little public information about Wang, who has been described as a shady but critical player in the rise and fall of FTX.
Russia threatens to restrict gas flows to western Europe via Ukraine; Kyiv rejects accusation by Gazprom it is taking supplies for Moldova from last remaining pipeline
David Sheppard and Roman Olearchyk – Financial Times
Russia has threatened to restrict gas supplies to western Europe through the only pipeline still connecting the regions, warning that it could lower flows through Ukraine from next week. Gazprom, the state-backed Russian gas pipeline monopoly, accused Ukraine on Tuesday of taking gas meant for Moldova from lines running through the country, and warned that it may reduce supplies from November 28.
Ukraine Rattled as Russian Attacks Hit Energy Infrastructure
Aliaksandr Kudrytski – Bloomberg
Explosions rattled Kyiv on Wednesday and Ukraine enacted emergency power cuts amid reports of a new barrage of Russian missile attacks across the country. Ukraine’s power grid operator said it had deliberately shut off power in every district and authorities from cities across the eastern European nation reported blackouts and halted mass transport lines.
Britain Sending Helicopters to Ukraine ‘for First Time’ Since War Began
Alana Calvert – Press Association
The Ministry of Defence has announced it will send helicopters to Ukraine for the first time since the war began. Defence Secretary Ben Wallace said it will be the first time piloted aircraft were sent to the war-torn nation since Russia’s invasion.
Exchanges, OTC and Clearing
The pension time bomb | Han Yik, former Head of Institutional Investors, World Economic Forum (video)
London Stock Exchange Group (LSEG) – YouTube
In 1935, Social Security set a retirement age of 65 in the US. At that time, average life expectancy was only 62. Nowadays life expectancy is far higher yet the retirement age has yet to budge meaningfully. This is clearly a real problem for society; Han Yik goes one step further and calls it a Pension Time Bomb. In this conversation, Han walks us through what the options are, and more importantly, what’s stopping governments from doing anything about it.
Common Guide to IPO Best Practices: a major step forward that further enhances the attractiveness of the Paris financial center
Against a backdrop of rising interest rates and a worsening macroeconomic situation, the Paris financial market has been striving to meet the increased need for equity capital among companies in the coming years, notably through Initial Public Offerings. These companies include the many French “unicorns” that the Paris ecosystem and the initiatives of the French authorities have helped bring about. It is essential that they find their natural listing market in Euronext. A major step forward has just been achieved with the signing of a “Common Guide to IPO Best Practices” by about thirty prominent financial institutions – institutional investors, asset management firms, banks and financial advisors – which operate on the Paris market.
Singapore Exchange named Regulation Asia’s Exchange of the Year for 4th time
Singapore Exchange (SGX Group) has been recognised as the “Exchange of the Year” and for the “ESG Initiative of the Year” in the Regulation Asia Awards for Excellence 2022. This is the fourth time SGX Group has received the Exchange of the Year accolade. The 2022 awards recognise SGX Group’s achievements in maintaining the resiliency of its operations amid heightened volatility and challenging external conditions. SGX Group was also recognized for establishing new regulatory frameworks including rules for the listing of Special Purpose Acquisition Companies (SPACs) and international linkages that expand access to an increased range of markets and products.
U.K. Financial Conduct Authority Publishes Consultation on “Synthetic” U.S. Dollar LIBOR and Announces Intention that 3-Month “Synthetic” Sterling LIBOR will be Published Until End of March 2024
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today noted that the U.K. Financial Conduct Authority (FCA) has published a consultation on a proposal to require ICE Benchmark Administration Limited (IBA), the administrator of LIBOR, to publish 1-, 3- and 6-month U.S. dollar LIBOR settings under an unrepresentative “synthetic” methodology after the end of June 2023 until the end of September 2024, and that the FCA intends to require IBA to continue to publish the 3-month “synthetic” sterling LIBOR setting until the end of March 2024.
Alcoa backs Rusal’s call for LME to reveal origin of all metal stocks; Banning Rusal’s aluminium would benefit other producers; Russian aluminium accounts for just 17.7% of LME stocks
Pratima Desai – Reuters
U.S.-based aluminium producer Alcoa supports an idea proposed last week by Russian producer Rusal for the London Metal Exchange to provide details about the origin of all metal in LME approved warehouses. Aluminium producer Rusal and Russian metal have not been directly targeted by sanctions imposed on Russia after it invaded Ukraine in February. But Alcoa has actively campaigned to ban Russian metal from being traded and stored on the LME. It is concerned that large amounts of aluminium in the LME system could distort pricing.
CME Group CEO calls Bankman-Fried ‘an absolute fraud,’ says he saw trouble months before FTX collapse
Stephanie Landsman – CNBC
A major exchange executive says he detected red flags months before the historic FTX collapse. CME Group chairman and CEO Terry Duffy said he suspected corruption at the cryptocurrency exchange the day of his first one-on-one meeting with founder Sam Bankman-Fried.
Risks ahead for SGX if average trading volume continues to be subdued; The securities daily derivatives average was down 1% month-on-month.
Singapore Business Review
An analyst revealed that Singapore Exchange (SGX) will experience risks if the average trading volume is still softened. In October, the total securities market turnover value was $23.1b, declined 5% year-on-year (YoY) and down 10% month-on-month (MoM). The securities daily average was unchanged YoY and down 1% MoM.
Nasdaq Wins Two RiskTech100® Awards and Jumps to Top 20 in RiskTech100® Global Ranking; Wins Awards in Trade Surveillance and Managed Services: Financial Crime Categories; Nasdaq Moves Up 7 Ranks in the RiskTech100 to 18th Place
Nasdaq, Inc. (Nasdaq: NDAQ) today announced the company was recognized by Chartis’ annual RiskTech100® awards, the most comprehensive independent study of the world’s major players in risk and compliance technology. At the organization’s annual award ceremony, Nasdaq was awarded with category wins in Trade Surveillance and Managed Services: Financial Crime, and the company moved up to 18th place in RiskTech100®’s ranking of the top 100 players in the industry.https://jlne.ws/3Vn92r6
NSE Indices launches Nifty G-Sec Jun 2036 Index
NSE’s index services subsidiary, NSE Indices Limited today launched a new target maturity index Nifty GSec Jun 2036 Index. The Nifty G-Sec Jun 2036 Index follows a target maturity structure with maturity date of June 30, 2036. It
includes government securities maturing twelve month ending June 30, 2036.
Shanghai International Energy Exchange has released its Circular on the Official Launch of Level-2 Market Data Service
To whom it may concern, The Shanghai International Energy Exchange (INE) plans to launch its real-time level-2 market data services (4 snapshots per second at price depth of 5 best bid/asks) on November 28, 2022 (i.e., during continuous trading on the evening of November 25) to meet the diverse data needs of investors. Please take note of the following matters.
Moscow Exchange expands its toolkit on the stock and derivatives markets
On November 23, 2022, the Moscow Exchange provides investors with new opportunities for trading shares of PJSC Group Positive. Trade code – POSI. Trading in deliverable futures contracts for the shares of PJSC “Group Pozitiv” begins on the derivatives market, and on the stock market, the company’s papers will become available at the evening session.
The Gaming Industry Doesn’t Need Web3, but Gamers Might
Everett Muzzy – CoinDesk
We are many months into the bear market that followed nearly 18 months of crypto hype. This boom was dominated by non-fungible tokens (NFT), and during this time a distinct narrative emerged around Web3 gaming. Predicated on early successes such as CryptoKitties, Web3 gaming became the Holy Grail that would finally bring together the scarcity of NFTs, the incentivization of cryptocurrencies and the utility of the metaverse.
Singapore’s DBS bank completes intraday repurchase transaction on JPMorgan’s blockchain-based platform
Pradipta Mukherjee – Forkast
Singapore-based DBS bank, the largest lender in Southeast Asia, has said it is the first bank in Asia to complete an intraday repurchase transaction on a blockchain-based network. The transaction was completed on JPMorgan’s intraday repurchase application on Onyx Digital Assets, which enables instant settlements and maturity of transactions within hours instead of the current industry norm of one to two working days.
EU Nations Advance €43 Billion Plan to Become Semiconductor Hub
Jillian Deutsch – Bloomberg
European Union nations agreed to pursue a €43 billion ($44.4 billion) plan to jump-start the bloc’s semiconductor production, clearing a key hurdle in its plan to bolster high-tech industry. The deal was backed Wednesday by EU ambassadors, according to people familiar with the matter. It would expand the scope of what chip plants are considered “first-of-a-kind” and qualify for state aid, but stops short of allowing all automotive chips to qualify for funds, which some countries had demanded earlier this fall.
Enhancements in trading technology, automation and improvements in people are key for future proofing trading desks, finds panellists; At the Fixed Income & FX Leaders Summit APAC, panellists offered insights into how trading desks can leverage innovations in electronic trading and automation as key differentiators to drive growth and achieve resilience.
Wesley Bray – The Trade
In a panel discussion at the Fixed Income & FX Leaders Summit APAC, speakers were asked how trading desks could be future proofed in a post-pandemic environment and high volatile markets. mPanellists gave insights into how trading desks can leverage innovations in electronic trading and big data as key differentiators to drive growth and achieve agility.
Apollo Plans to Offer a New Fund on Blockchain With Fintech Figure; More financial firms are migrating to blockchain technology; Blockchain tech to reduce costs after digitization of assets
Sonali Basak – Bloomberg
Apollo Global Management Inc. is going to offer a new fund on a public blockchain as it expands its relationship with financial technology firm Figure. Apollo and Hamilton Lane Inc. are launching investment vehicles using a platform on Figure. The groups are utilizing a blockchain technology known as Provenance, which serves as a ledger to issue and transact across private investments.
Bitcoin Will Become ‘Less Important’ for Cybercrime Payments: Kaspersky
Will McCurdy – CoinDesk
Cybersecurity company Kaspersky reported that ransomware negotiations and payments may soon come to rely less on Bitcoin as a means of payment. The Russian-founded firm attributed this transition to improvements in the technology that detects the flow and sources of Bitcoin, as well as increased sanctions and market regulation. The firm added that cybercriminals will instead look towards other digital currencies to facilitate their illicit payments.
Creativity can enable cybersecurity hiring in the federal government
Gary Barlet – Federal News Network
The need for a skilled information technology and cybersecurity workforce is an issue raised at almost every gathering of federal agencies and industry leaders. The overarching conversation may be about the latest zero trust mandates, or the most recent guidance from the Office of Management and Budget, but a key, underlying element remains: the need for skilled cybersecurity staff.
Educating Companies On The Cybersecurity Challenges Of Remote Work
Rod Berger – Forbes
In the past two decades, the world has transitioned to a digitally dependent business landscape. Almost every business, regardless of size and industry, has an online presence to effectively communicate with and serve clients and customers on a wider scale. However, this transition to a digital era came with its own set of problems. As businesses continue to leverage digital solutions to store sensitive business, financial, and customer data, cybersecurity breaches have grown in leaps and bounds.
Pentagon releases zero trust strategy to guide DoD cybersecurity priorities
Justin Doubleday – Federal News Network
The Defense Department officially unveiled a zero trust strategy and roadmap today laying out how DoD components should direct their cybersecurity investments and efforts in the coming years to reach a “target” level of zero trust maturity over the next five years
Cybersecurity master’s grads are landing $200K-plus pay packages
Sydney Lake – Fortune
As the number of cybersecurity attacks continues to rise, so does the demand for the talent to protect against them. In fact, there are more than 700,000 open cybersecurity positions in the U.S. alone-and the occupation is growing more than twice as fast as the overall rate across the country’s economy, data from CyberSeek shows.
FTX Japan plans to resume withdrawals by 2023: Report
Turner Wright – Coin Telegraph
Crypto exchange FTX’s subsidiary in Japan, FTX Japan, reportedly plans to resume withdrawals by the end of 2022. According to a Nov. 21 report from Japan-based news outlet NHK, FTX Japan has been making preparations to resume withdrawals. Japan’s Financial Services Agency, or FSA, requested that the exchange suspend business orders on Nov. 10, prior to FTX Group declaring bankruptcy in the United States for more than 130 associated companies, including FTX Japan Holdings, FTX Japan and FTX Japan Services.
FTX, a Whale Hunter’s Delight
Bradley Hope – Whale Hunting
We know all too well what happens when the public doesn’t quite grasp the depths of a fraud because it’s all a bit too murky and convoluted. For years, there were only a few of us who saw the 1MDB scandal for the epic crime that it eventually was understood to be – one that drew in Goldman Sachs bankers, lawyers from Shearman & Sterling, the auction house Christie’s and a never-ending parade of accountants, financial experts, party-planners and private investigators.
Bankman-Fried Apologizes to FTX Employees, Details Amount of Leverage in Internal Letter
Nikhilesh De – CoinDesk
FTX founder and former CEO Sam Bankman-Fried “froze up in the face of pressure” as his company collapsed, he wrote in a new letter sent to employees of the company he once helmed. In the letter, shared internally in FTX’s company Slack and obtained by CoinDesk, Bankman-Fried said he felt “deeply sorry about what happened” and what that meant for the company’s employees.
Coinbase CEO Brian Armstrong cites S.F. ‘techlash’ as reason for closing its HQ
William Hicks – San Francisco Business Times
In a recent interview with the Financial Times, Coinbase (NASDAQ: COIN) founder and CEO Brian Armstrong revealed one of the reasons for his company’s contentious exit from San Francisco. Armstrong pointed to a “techlash” he said was ruining San Francisco, where people creating growth were vilified, according to a paraphrase of his words by the FT. While Armstrong moved to L.A. personally, his company went “remote-first” last year and eliminated its former S.F. headquarters office entirely.
CZ Denies Report Binance Met With Middle East Investors for Crypto Recovery Fund
Binance CEO Changpeng “CZ” Zhao has been meeting with investors in Abu Dhabi, seeking cash for the exchange’s crypto recovery fund, according to a Bloomberg report. However, Zhao tweeted a reply that the report was “false” shortly after. “The Hash” panel weighs in on the latest with the FTX contagion concern and Binance’s initiative to contribute to the broader crypto industry.
Binance Cites Conflict of Interest for Passing on Genesis Investment: Report
Andrew Asmakov – Decrypt
Binance has reportedly rejected an offer to invest in troubled crypto lending firm Genesis due to a potential conflict of interest some of its business could create down the road. Genesis reportedly offered Binance a bid for its loan book, but it’s not immediately clear whether the world’s largest crypto exchange is keen on pursuing this option, according to The Wall Street Journal, citing people close to the matter.
Tornado Cash Developer Alexey Pertsev to Remain in Jail Until at Least Late Februrary
Jack Schickler – CoinDesk
Alexey Pertsev has been ordered to stay in jail until Feb. 20 after a Netherlands court found the Tornado Cash developer represented a flight risk. Pertsev has been held in detention since August, days after the U.S. Treasury used sanction powers against the Tornado protocol, which it said had been used to launder over a billion dollars’ worth of cryptocurrencies and to support North Korean hackers.
FTX Latest: Key Takeaways From Tuesday’s Bankruptcy Hearing
The collapse of Sam Bankman-Fried’s crypto empire has been swift and chaotic, leaving a group of bankruptcy experts to sift through the rubble. Tuesday’s first-day motions hearing in Delaware bankruptcy court marked a key moment in the public reckoning. An attorney representing the firm told the court that a “substantial amount” of FTX Group’s assets “have either been stolen or are missing.”
Bankman-Fried issues mea culpa in letter to former FTX employees; Ex-billionaire writes to his ‘family’ and deeply regrets his ‘oversight failure’
Joshua Oliver – Financial Times
Sam Bankman-Fried has told former FTX employees that excessive borrowing by his own trading firm Alameda Research was responsible for FTX’s demise, insisting he was unaware of the margin positions taken by the traders. In a letter to former employees, the FTX founder wrote that he “did not realise the full extent of the margin position, nor did I realise the magnitude of the risk posed by a hyper-correlated crash”.
Sam Bankman-Fried ran FTX as personal fiefdom, court hears; ‘Substantial amounts of money’ spent on items such as vacation homes in Bahamas, bankruptcy lawyer testifies
Tabby Kinder – Financial Times
FTX founder Sam Bankman-Fried ran the cryptocurrency exchange as his “personal fiefdom” before its implosion, according to a lawyer working on the bankruptcy, with “substantial amounts of money” spent on items unrelated to the business such as vacation homes in the Bahamas.
Genesis Bankruptcy Jitters Send Bitcoin to Fresh Low
Stephen Alpher – CoinDesk
Days after its lending unit was forced to halt withdrawals in wake of the collapse of crypto exchange FTX, Genesis Global Trading has mentioned bankruptcy as a potential option as it seeks fresh capital, reports Bloomberg citing people with knowledge of the matter.
Crypto Mining and Staking Firm Foundry Buys Some of Troubled Bitcoin Miner Compute North’s Assets
Aoyon Ashraf – CoinDesk
Crypto mining and staking firm Foundry will buy two “turnkey” crypto mining assets with a total of 17 megawatt (MW) capacity from bitcoin miner Compute North, which filed for Chapter 11 bankruptcy protection in late September Foundry will buy Compute North’s sites in North Sioux City, S.D. and Big Springs, Texas that have a fully operational capacity of six MW and 11 MW, respectively, according to a statement on Tuesday.
Fenbushi Founder Bo Shen Loses $42M in Stablecoins, Bitcoin, Ethereum to Hackers
Andrew Asmakov – Decrypt
Bo Shen, the founding partner of venture capital firm Fenbushi Capital, took to Twitter on Wednesday to share the news of hackers stealing as much as $42 million in crypto from his personal wallet. According to Shen, the theft occurred on November 10, with most of the stolen funds- $38 million-being the USDC stablecoin.
Huobi Rebrands, Expands Globally Amid Crypto Industry Challenges
It’s a tough time for many crypto companies, especially for centralized exchanges attempting to weather the fallout from the collapse of FTX. The exchange’s recent meltdown has put a downer on the industry, prompting increased skepticism of exchanges.
Bank of Japan to Run CBDC Experiments With Country’s Megabanks: Report
Lavender Au – CoinDesk
The Bank of Japan (BoJ) has planned experiments on a digital yen with three megabanks and regional banks in the country, Nikkei reported on Wednesday. Starting in the spring of 2023, the BoJ will work with private banks and other organizations to identify any problems with deposits and withdrawals, and check that a central bank digital currency (CBDC) can operate during natural disasters and in areas without internet access, according to the report.
Opinion: Fidelity sticks with bitcoin 401(k) offerings despite crypto turmoil – but why? Crypto declines and FTX collapses – Fidelity is undeterred.
Brett Arends – MarketWatch
I have to hand it to Fidelity. For their nerves of steel, at least. The company that runs America’s biggest 401(k) platform is sticking with its plans to offer bitcoin in retirement plans.This is despite the $2 trillion collapse in the cryptocurrency market in just over a year, during which time bitcoin has lost as much as 80% of its value – and many of its competitors have lost 100%.
FTX’s Demise Shows the End of the Crypto Bust Is Near
Edward Harrison – Bloomberg
The spectacular collapse of the crypto exchange FTX has finally brought the specter of fraud into this business cycle. Investigations are still ongoing and no one has been arrested. The question now is whether FTX’s downfall was due to incompetence, too much risk or fraud. Maybe it was some combination of all three. Just last week, the new CEO of FTX, John Ray said “never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.
Binance CEO Zhao Seeks Middle East Cash for Crypto Recovery Fund; Zhao and his team met with potential investors in Abu Dhabi; The fund will backstop crypto projects in wake of FTX demise
Ben Bartenstein, Annie Massa, Suvashree Ghosh and Lydia Beyoud – Bloomberg
Binance Chief Executive Officer Changpeng “CZ” Zhao and several deputies met with investors in Abu Dhabi last week in an effort to raise cash for a crypto industry recovery fund, according to people familiar with the matter.
Digital Currency Group Says No Imminent Threat Despite Owing Genesis $575M
Andrew Hayward – Decrypt
mid concerns over the health and future of Digital Currency Group (DCG) following the collapse of crypto exchange FTX, company CEO Barry Silbert told shareholders of the crypto conglomerate that while it owes its own Genesis Trading arm $575 million, the firm aims to emerge “stronger” from the crypto winter.
Barry Silbert seeks to reassure DCG investors; Billionaire writes to crypto group’s shareholders amid fears for broker Genesis amid FTX fallout
Nikou Asgari – Financial Times
American billionaire Barry Silbert has written to shareholders in his embattled Digital Currency Group, seeking to reassure them of its viability as fears rise for the potential bankruptcy of his crypto broker Genesis and as the fallout from the collapse of FTX reverberates through the industry.
Crypto Custodian Aegis Trust Offers $25M Insurance Policy for NFTs
Cam Thompson – CoinDesk
Crypto custodian Aegis Trust is offering an insurance policy for non-fungible tokens (NFT), the company said Tuesday. The policy, provided by insurance marketplace Lloyd’s of London, will allow Aegis to insure up to $25 million for tokenized assets held by institutional investors, hedge funds and exchanges.
Mattel Launches NFT Marketplace With Hot Wheels Collection
Rosie Perper – CoinDesk
Global toy company Mattel has launched its own non-fungible token (NFT) marketplace on Mattel Creations, the company’s direct-to-consumer platform, expanding its lineup of digital collectibles from its portfolio of iconic brands.
Why OpenSea Is Sticking With NFT Creator Royalties
Andrew Hayward – Decrypt
As the leading NFT marketplace, OpenSea’s policies carry a lot of weight-and going into November, many creators and collectors alike wondered about the $13.3 billion startup’s stance on creator royalties. But when OpenSea finally spoke out on the issue, its comments only created more questions, prompting backlash from creators.
Binance US Steps Into National Politics With New Campaign PAC
Jesse Hamilton – CoinDesk
As campaign mega-donor Sam Bankman-Fried and his FTX compatriots vanish from U.S. policy circles, their absence left a void in the crypto industry’s political involvement. Part of that may be filled by the U.S. arm of rival Binance. Binance.US has chosen this moment to step into the arena with its own political action committee (PAC), the Binance.US Innovation PAC. Though the company hasn’t yet detailed its intentions, the committee was formed with a filing to the Federal Elections Commission dated Monday.
The real future of the metaverse is not for consumers; The creation of virtual reality ‘digital twins’ will revolutionise the energy transition, emergency planning and medicine
Pekka Lundmark – Financial Times
If the metaverse was a person, it would be a 30-year-old still in search of their first job. There’s been a lot of hype around the phenomenon ever since Neal Stephenson coined the term in his 1992 novel Snow Crash. Recent attention has focused on virtual reality gaming and social interactions within the consumer version of the metaverse. But its older, and often neglected, siblings – the industrial and enterprise metaverses – are already being used to test future scenarios in industries such as aerospace, logistics and manufacturing.
Fauci’s Farewell From the White House: ‘I Gave It All I Got’; Biden medical adviser, NIAID director gives last briefing; Fauci says he’ll ‘cooperate fully’ with GOP House probes
Alex Wayne – Bloomberg
Anthony Fauci urged Americans to keep up with their Covid-19 vaccinations in his final briefing from the White House on Tuesday, saying he hopes he’s remembered as a dedicated public servant despite GOP criticism of his pandemic-era advice. “I’ll let other people judge the value or not of my accomplishments,” said Fauci, the National Institute of Allergy and Infectious Diseases director who will retire in December after 54 years in the federal government.
Did the Fed Make a Fourteen-Year-Long Mistake; Quantitative easing may not have been worth all the trouble it caused.
Mark Gongloff – Bloomberg
Almost exactly 14 years ago, on Nov. 25, 2008, the Fed announced it was going to buy $600 billion in mortgage-related debt to help keep the housing market from wrecking the financial system. Thus the American version of Japan’s “quantitative easing” began.
New York Governor Hochul Signs Moratorium to Curb Crypto Mining; NY is the first state to temporarily ban new crypto mining; The two-year ban targets fossil fuel-powered Bitcoin miners
David Pan – Bloomberg
New York Governor Kathy Hochul has signed one of the most restrictive laws in the US on regulating cryptocurrency mining. The bill triggers a two-year moratorium on new permits for crypto-mining companies that are powered by fossil fuels and use proof-of-work authentication methods, with millions of computers, to validate transaction data. That earns the companies rewards in the form of the token from the blockchain network.
UK Minister Fails to Name Single Brexit Benefit After Being Put on the Spot
Martina Bet, The Press Association – Bloomberg
A Treasury minister failed to name a single Brexit benefit after being put on the spot in the House of Commons chamber. Andrew Griffith said the Prime Minister and the Chancellor were right to reaffirm “we must never go back” and pursue a relationship with Brussels that “relies upon alignment with EU laws”.
EU Softens Russian Oil Price-Cap Plan Ahead of Approval; Draft legislation would weaken earlier shipping provisions; EU diplomats to discuss, potentially approve cap on Wednesday
Alberto Nardelli and Ewa Krukowska – Bloomberg
The European Union watered down its latest sanctions proposal for a price cap on Russia’s oil exports by delaying its full implementation and softening key shipping provisions. The bloc proposed adding a 45-day transition to the introduction of the cap, according to a document seen by Bloomberg. The proposed grace period would apply to oil loaded before Dec. 5 — the date oil sanctions are due to kick in — and unloaded by Jan. 19, aligning the EU to a clause previously announced by the US and the UK.
The state might be encroaching too far on European banks; Governments should note: strong lenders make a strong economy
Jérôme Legras – Financial Times
Large European banks have an excess capital of more than €500bn. For listed banks, this represents 43 per cent of their market value. In a world where banks were free to remunerate shareholders as they wished, while keeping capital above minimum requirements, they could pay 43 per cent of their entire market value as a special distribution. This is a stunning number. And yet, Europeans banks trade on an average valuation of 0.6 times of their book value.
El Salvador Proposes Digital Securities Bill, Paves Way for Bitcoin Bonds
Sandali Handagama – CoinDesk
El Salvador’s national assembly is considering a draft bill to regulate digital securities, indicating the country is going ahead with plans to issue bitcoin-backed bonds. The bill, presented by the country’s Minister of Economy, Maria Luisa Hayem Breve, to the Legislative Assembly of El Salvador. The bill seeks to establish a National Digital Assets Commission that would oversee the regulation of digital asset issuers, service providers and other participants involved in the “public offering process” of digital securities according to the 33-page document reviewed by CoinDesk.
Regulators should seek greater disclosure from stablecoin issuers: HK monetary authority researchers
Ningwei Qin – Forkast
Regulators should seek more disclosure from stablecoin issuers, as stablecoins could transmit risk from markets to traditional finance, according to researchers at the Hong Kong Monetary Authority.
FTX Collapse: Binance, Largest Crypto Exchange, Is Under Investigation
Luc Olinga – TheStreet
The FTX debacle is reverberating through the crypto industry and finance in general. The collapse of this crypto exchange, which in February was valued at $32 billion, shocked everyone. FTX filed for Chapter 11 bankruptcy on Nov. 11 because it ran out of cash to meet the demands of its panicked customers. And that has prompted regulators to open investigations into the crypto empire of Sam Bankman-Fried, the founder of FTX.
CFTC Bypassed Legal Requirement in Trying to Serve Ooki DAO, Crypto Supporters Claim
Nikhilesh De and Cheyenne Ligon – CoinDesk
The Commodity Futures Trading Commission is trying to “create [a] novel precedent” for itself in trying to serve a lawsuit to the entirety of a decentralized autonomous organization, rather than to the DAO’s members, one of three filings pushing back against the agency’s lawsuit said. The filings, published Monday, are responses to the CFTC’s earlier pushback against the amicus briefs filed by crypto legal consortium LeXpunK, venture-capital firms Andreessen Horowitz and Paradigm and the DeFi Education Fund.
SEC Rules Aim to Boost ETF Transparency
Heather Bell – ETF.com
The Securities and Exchange Commission voted to adopt rule and form amendments around requirements for mutual funds and exchange-traded funds, which would increase transparency of the funds’ reports and advertising practices. SEC Chair Gary Gensler noted in a press release that fund shareholder reports, which are often more than 100 pages, make it difficult for investors to find relevant information.
Goldman Sachs to Pay $4 Million SEC Penalty in ESG Fund Case
Lydia Beyoud – Bloomberg
Goldman Sachs Group Inc. will pay $4 million to settle US regulators’ claims that its asset-management unit didn’t properly weigh environmental, social and governance factors in some of its investment products. The Securities and Exchange Commission said that the Goldman Sachs Asset Management unit “had several policies and procedures failures involving the ESG research its investment teams used to select and monitor securities.” The alleged misconduct occurred from April 2017 to February 2020, the SEC said in a statement on Tuesday.
SEC Charges Goldman Sachs Asset Management for Failing to Follow its Policies and Procedures Involving ESG Investments
The Securities and Exchange Commission today charged Goldman Sachs Asset Management, L.P. (GSAM) for policies and procedures failures involving two mutual funds and one separately managed account strategy marketed as Environmental, Social, and Governance (ESG) investments. To settle the charges, GSAM agreed to pay a $4 million penalty.
ASIC sues Block Earner for unlicensed conduct over crypto-asset based products
ASIC has commenced civil penalty proceedings in the Federal Court against fintech company Block Earner alleging it provided unlicensed financial services in relation to its crypto-asset based products and that it operated an unregistered managed investment scheme.
Block Earner offered a range of fixed-yield earning products based on crypto-assets under the names USD Earner, Gold Earner and Crypto Earner (collectively, the Earner Products).
Further consultation and announcements on the wind-down of LIBOR
We are proposing to require LIBOR’s administrator, IBA, to continue to publish the 1-, 3- and 6-month US dollar LIBOR settings under an unrepresentative ‘synthetic’ methodology until end-September 2024. After this, publication would cease permanently. For sterling LIBOR, we intend to continue to require IBA to publish the 3-month synthetic sterling LIBOR setting until end-March 2024, after which it will cease permanently.
Court orders Hong Kong Wan Kiu Investment Company Limited and its connected entities to compensate clients
Securities & Futures Commission of Hong Kong
The Court of First Instance has ordered Hong Kong Wan Kiu Investment Company Limited (HKWK), its sole director and shareholder, Ms Connie Sham Khi Rose, and Sham & Partners Limited (SPL) to compensate clients of HKWK in legal proceedings brought by the Securities and Futures Commission (SFC) under section 213 of the Securities and Futures Ordinance (SFO) (Note 1). SPL, incorporated in Hong Kong, is solely owned by the son of Connie Sham, Mr Christopher Sham Ho Ming.
Let’s Stop Regulating Crypto Exchanges Like Western Union
JP Koning – CoinDesk
The collapse of cryptocurrency exchange FTX has been gut-wrenching for its customers, not only those who used its flagship offshore exchange in the Bahamas but also U.S. customers of Chicago-based FTX US. But there is a silver lining to the FTX debacle. It may put an end to the way that cryptocurrency exchanges are regulated – or, more accurately, misregulated – in the U.S.
Investing and Trading
FTX Latest: Sequoia Says Sorry; Bankman-Fried Depicts Wipeout
Top partners at Sequoia Capital apologized to investors for backing FTX, whose bankruptcy had its first US court hearing. Sam Bankman-Fried in a letter outlined a crash in collateral to $9 billion from $60 billion. An attorney representing Bankman-Fried’s collapsed FTX Group said a “substantial amount” of its assets “have either been stolen or are missing.” Identifiable information of FTX’s top creditors is being kept secret for now.
Sequoia Capital Apologizes to Its Fund Investors for FTX Loss
Berber Jin – The Wall Street Journal
Sequoia Capital apologized to its fund investors for the $150 million it lost on crypto exchange FTX, said people familiar with the matter, a rare moment of contrition for the storied venture-capital firm. On the call, Sequoia’s partners told the fund investors that the firm would improve its due-diligence process on future investments and that it believed it was misled by FTX based on its recent bankruptcy filing, the people said.
Eurazero Signs an Agreement to Invest in NEOXAM, a Provider of Front-Office, Middle-Office and Back-Office Software for Financial Institutions
Eurazeo, via its Small-Mid Buyout team is today announcing the signature of an agreement with a view to investing in NeoXam, alongside its founder Serge Delpla and its management team led by Florent Fabre. Under the agreement, Eurazeo would invest more than €100 million, thus becoming the group’s majority shareholder.
S&P Overpromised and Overdelivered; Also carbon accounting, FTX investigations, FTX diligence, crypto liquidity, crypto recovery fund, GameStop and Truth Social.
Matt Levine – Bloomberg
When I was an investment banker, one thing that I did was pitch convertible bond offerings to companies. A coverage banker – an investment banker whose job was to know companies and advise them on financial topics – would bring me to a meeting with the chief financial officer of one of her companies to talk about convertible bonds. And I would come in and say “the convertible bond market is hot, you should do one, we think you could raise $200 million of 5-year convertibles and pay 2% interest with a 30% conversion premium.”
Investment manager Abrdn poised for FTSE 100 return; Scottish group’s change in fortunes helped by return of capital to investors
Adrienne Klasa – Financial Times
Abrdn is poised to rejoin the FTSE 100 index after a sharp rally in its share price, helped by a planned return of capital to investors. The investment manager’s stock has risen 35 per cent since August when it was dropped from the index, the first time it had not been included in the top table of UK companies since it was formed through the merger between Standard Life and Aberdeen Asset Management in 2017.
Oil Prices Are Breaking an Old Recession Tradition; Soaring energy costs have signaled major downturns in the past, but recent market declines are proving to be a tailwind for the economy.
Conor Sen – Bloomberg
You don’t have to look far these days for evidence of a looming recession: The housing market is slumping, the bond market’s yield curve has inverted , and the Federal Reserve is projecting that the unemployment rate will rise in 2023. But another noteworthy factor that was part of that gloomy picture just a few months ago has disappeared: the price of oil.
How Small Shareholders Can Cause Good Trouble; Fintech startups are helping facilitate an investing revolution beyond meme stocks.
Matthew Brooker – Bloomberg
The global pandemic’s wrenching disruptions have had an array of unforeseen economic and social consequences, from gluts of office space to developmental challenges for children. Not many forecasters are likely to have had “revived shareholder democracy” on their bingo cards. Bravo to anyone who did. The part that lockdown boredom played in inspiring the meme-stock craze is acknowledged. Less appreciated may be its role in a shift to greater exercise of investor voting rights. UK startups Tulipshare Ltd. and Tumelo are at the forefront of a movement to bridge the gap between ultimate shareholders and the companies they collectively own. This may not generate quite the same viral buzz as the GameStop Corp. frenzy, but it’s a trend with potentially longer-lasting and more profound effects on the investing landscape.
Cannabis SPAC Flops After Failing to Lure South Africa Investors
John Bowker – Bloomberg
Cilo Cybin Holdings Ltd., a South African medical cannabis company, abandoned plans for an initial public offering in Johannesburg after failing to attract enough investment. The business, the first in South Africa to win the right to grow, process and package cannabis products, had planned to list as a special purpose acquisition company, or SPAC. The aim was to raise as much as 2 billion rand ($116 million), founder Gabriel Theron said earlier this year, yet investors offered to buy just 20.5 million rand of shares.
Environmental, Social and Corporate Governance
Why these are the smartest and most sustainable cities
Joan Enric, Ricart Costa and Pascual Berrone – World Economic Forum
The IESE Cities in Motion Index compared 183 cities to determine the world’s smartest and most sustainable cities for 2022. London heads the list for its strong human capital, international profile, urban planning, and governance. Europe is home to the largest number of smart cities, with Paris, Berlin, Amsterdam, Oslo, and Copenhagen all earning a spot in the top ten.
Biden administration loosens Trump-era investing rules around environment, social and governance funds for 401(k) plans
Greg Iacurci – CNBC
The U.S. Department of Labor on Tuesday loosened rules around environment, social and governance funds for 401(k) plans. The Trump administration had issued regulations in 2020 that had a “chilling” effect on the uptake in workplace retirement plans, even if the ESG fund would have delivered a financial benefit, Labor Department officials said. ESG investing – also known as sustainable, impact or socially conscious investing – has broadly become more popular. The Biden administration on Tuesday issued a final rule that makes it easier for employers to consider climate change and other so-called environment, social and governance factors when picking investment funds for their 401(k) plans.
17 Democratic attorneys general push back against anti-ESG sentiments
Courtney Degen – Pensions & Investments
Democratic attorneys general in 16 states and the District of Columbia sent a letter to four key lawmakers Monday, voicing their support for the environmental, social and governance investing movement and pushing back against Republican efforts to undermine it. “A rigorous consideration of ESG factors to evaluate Value – the risk and reward of a potential investment – not Values – a subjective preference as to whether a given business or entity merits investment based on the nature of its business – can provide significant financial benefits to investors,” the letter states, which is addressed to Sens. Sherrod Brown, D-Ohio, and. Patrick J. Toomey, R-Pa., chairman and ranking member of the Senate Banking Committee, respectively; and Reps. Maxine Waters, D-Calif., and Patrick McHenry, R-N.C., chairwoman and ranking member of the House Financial Services Committee, respectively.
ESG indices jump 50% but new investors are still unsure; ESG indices are growing but the market is still only a sliver of the overall futures market
Jeremy Chan – Financial News
ESG futures indices are booming, but many new investors are still not confident enough to back them. CME Group’s global head of equity index products Paul Woolman said the exchange has seen a 50% jump in average daily value traded this year, up to around 1,500 contracts a day. “What we’ve seen is relatively consistent growth year over year with more clients adopting products,” he told an ISDA event on 21 November.
Labor Department Clears Path for 401(k) Plans to Offer ESG Funds; Few retirement plans currently give savers the option to make investments based on environmental, social and governance principles
Anne Tergesen – The Wall Street Journal
More retirement savers could soon have the option to invest in funds based on environmental, social and governance principles, under final regulations issued by the Labor Department on Tuesday. The new rule reverses a move by the Trump administration in 2020 that made it harder for 401(k) plans to put ESG investments on the menu. That regulation went into effect shortly before President Biden took office, but the administration moved to replace it.
Lack of legal clarity has not restricted European carbon markets – expert
Radi Khasawneh – Global Investor Group
The lack of clear legal definitions across EU member states has not hindered the development of the bloc’s auction market, a legal expert has suggested.
Recycling Our Cities, One Building at a Time; From abandoned Japanese farmhouses to retired New York City water towers, builders are mining existing structures for materials to make new buildings greener.
Aaron Clark and Erica Yokoyama – Bloomberg
Takumi Osawa kneels on the narrow balcony of a wooden house outside Tokyo and describes how, 140 years ago, workers would have hoisted baskets of mulberry leaves to the second floor to feed silkworms. When they ate, it sounded like rain. Known in Japan as minka, these locally crafted structures with characteristic pitched roofs were built for hundreds of years to accommodate farmers, artisans and merchants. This one was originally constructed in 1879 and housed a family on the first floor who tended silkworms on the second and third.
What’s Needed to Modernize America’s Electricity Grid?
Michael Polsky and Jennifer Layke – World Resources Institute
The Infrastructure Investment and Jobs Act that President Biden signed into law last November is a down payment to modernize the electric grid in the United States, but it’s only a piece of what’s needed. The country needs a grid that is faster, more resilient and helps it meet its emissions reduction goals. As we enter 2022, it’s time for Congress to act and build a modern grid, based on renewable energy.
Diageo’s African Brewer Achieves Net Zero Status Using Biomass; EABL burning agricultural waste for steam in Kenya, Uganda; Biomass projects will help company cut emissions by 95%
Eric Ombok – Bloomberg
Diageo Plc’s East African unit is using macadamia shells, sugar bagasse and coffee and rice husks to produce electricity at factories in Kenya and Uganda, helping it achieve net zero status eight years ahead of schedule.
Here’s how CO2 emissions have changed since 1900 – World Economic Forum and Visual Capitalist
Bruno Venditti – Visual Capitalist
This graphic shows the changes in global fossil fuel carbon dioxide emissions between 1900 and 2020. Before the Industrial Revolution (1760-1840), emissions were very low, but with the increased use of fossil fuels to power machines, emissions rose to 6 billion tonnes of CO₂ per year by 1950. Much of the slowdown in CO₂ emissions growth in the 2010s was attributable to the substitution of coal with gas and renewables. Emissions are now approaching pre-pandemic levels, with 36.2 gigatons added to the atmosphere in 2021.
Cop15 Statement From The Private Financial Sector
‘Moving Together On Nature’: Statement From The Private Financial Sector To The Conference Of The Parties To The Convention On Biological Diversity. This statement was drafted by the UNEP Finance Initiative (UNEP FI), the Principles for Responsible Investment (PRI) and the Finance for Biodiversity Foundation. Against the backdrop of a volatile world humanity is facing a triple planetary crisis of climate change, biodiversity loss and pollution, impacting millions of people today, especially the most vulnerable, and future generations. Coordinated action is needed. We cannot reach net-zero without halting and reversing nature-loss, and we cannot tackle biodiversity loss without tackling climate change. We, the financial community, have a role to play in this complex ecosystem.
FCA Forms Group to Develop ESG Ratings Code of Conduct
The UK’s Financial Conduct Authority (FCA) has announced the formation of a group to develop a new code of conduct for ESG data and ratings providers. The regulator had proposed introducing regulatory oversight of ESG data and ratings providers earlier this year. The ESG Data and Ratings Code of Conduct Working Group (DRWG) will be co-chaired by M&G, Moody’s, London Stock Exchange Group (LSEG) and Slaughter and May, and will be composed of stakeholders including investors, ESG data and ratings providers, and rated entities, and will aim to meet later this year.
Twitter Restores Anti-Trans Accounts and Fuels Hate, Groups Say; Advocates say Colorado attack shows rhetoric leads to violence; Study shows anti-LGBTQ activity increased fourfold last year
Emily Birnbaum – Bloomberg
Twitter Inc. Chief Executive Officer Elon Musk is restoring a string of accounts previously suspended for harassing transgender people, rolling back protections for the LGBTQ community as the country confronts the aftermath of a shooting in a Colorado gay club that left five people dead and dozens wounded.
Can climate technology save the planet?; In our latest podcast series, Pilita Clark explores the moonshot efforts to fight climate change
Despite the climate crisis accelerating, technologists believe cutting-edge solutions can save our planet. But will climate tech be able to scale up fast enough to offer real change, or is it just a diversion from real climate solutions?
UN Seeks $472.6 Million to Support Drought-Stricken Kenya
Moses Mozart Dzawu – Bloomberg
The United Nations is seeking $472.6 million to boost Kenya’s efforts in dealing with the impacts of the worst drought the East African nation has faced in decades. The fund will help alleviate the suffering of about 4.3 million people who are among the 5.8 million in Kenya’s arid and semi-arid areas, the UN office for the coordination of humanitarian affairs, said in a statement.
Fund Managers Are Basing Bets on ‘Artificially Low’ ESG Scores; Federated Hermes says lots of ESG names overlooked by markets; Goldman investment manager sees lack of data as an opportunity
Lisa Pham – Bloomberg
A lack of reliable ESG data in emerging markets is proving a boon for some of the heavyweights of global finance. Federated Hermes Ltd. is among investment firms that have spent the past year building its ESG exposure to emerging markets, where it says “artificially low” environmental, social and governance ratings have created openings for investors willing to do their own research.
Genesis Global Capital Has Hired Investment Bank Moelis to Explore Options Including Bankruptcy: New York Times
Aoyon Ashraf and Stephen Alpher – CoinDesk
Genesis Global Capital has hired investment bank Moelis & Company to explore options, including a potential bankruptcy, The New York Times reported, citing three people familiar with the situation. There haven’t been any final decisions made and it is still possible for the company to avoid a bankruptcy filing, the report said. Genesis had spent much of November scrambling to raise fresh capital or reach a deal with creditors thanks to its exposure to collapsed crypto exchange FTX.
It’s Now Clear That QE Was a Colossal Policy Mistake; There’s no convincing evidence that central banks’ purchases of trillions of dollars of bonds and other financial assets helped any economy.
Allison Schrager – Bloomberg
The great quantitative easing experiment was a mistake. It’s time central banks acknowledge it for the failure it was and retire it from their policy arsenal as soon as they’re able. Since the global financial crisis of 2008, an integral part of central banks’ play book in the US, the UK and the European Union has been QE – the practice of buying up long-term bonds and mortgage-backed securities. QE is supposed to work by lowering long-term interest rates, which boosts demand and increases lending and risk-taking.
US banks use thaw in markets to shift ‘hung loans’ off their books; Investors nibble on debt of companies less exposed to economic slowdown but avoid riskier groups
Eric Platt and Harriet Clarfelt – Financial Times
Wall Street banks are using a thaw in corporate debt markets to offload billions of dollars’ worth of loans tied to risky private equity takeovers, but many are still incurring losses to clinch deals with investors. The sale of debt earlier this month linked to the buyout of television ratings provider Nielsen offered a reprieve to lenders including Bank of America and Barclays, which are desperate to clear “hung” deals that have piled up on their balance sheets this year because of a dearth of investor appetite.
FTSE UK Index Series – Indicative Quarterly Review Changes December 2022
FTSE Russell, the global index provider, advises of the following indicative changes to the FTSE 100 and FTSE 250, based on data as of Friday 18th November 2022.
Credit Suisse flags hefty loss as rich clients leave
John Revill – Reuters
Credit Suisse expects a pre-tax loss of up to 1.5 billion Swiss francs ($1.58 billion) in its fourth quarter as it keeps bleeding cash, the Swiss bank said on Wednesday, shortly before shareholders approved a $4 billion capital hike. The bank said a “challenging” economic and market environment had hurt client activity, while cash outflows across the business had increased at the start of its fourth quarter.
CEO Wants People to Peek Under Hood of $1.2 Trillion Fund; Norway’s Tangen uses podcast, school talks to add transparency; Openness is more important than ever in volatile times: CEO
Kari Lundgren – Bloomberg
Norway’s $1.2 trillion sovereign wealth fund, built from its oil wealth, is akin to a black box for many of the country’s 5.4 million citizens. Chief Executive Officer Nicolai Tangen is out to change that. Soaring inflation, turbulent financial markets and geopolitical uncertainty are weighing on the returns of the world’s biggest rainy-day fund. The CEO has started a communications overhaul to ensure that citizens, who collectively own the fund, understand why.
John Mack said: ‘The culture of just making money is the wrong culture’ © Bloomberg; ‘The crisis made everyone a lot smarter,’ says former CEO of Morgan Stanley of the 2008 financial crisis
Joshua Franklin and Brooke Masters – Financial Times
John Mack cemented his place in Wall Street folklore during the depths of 2008 financial crisis, when as chief executive of Morgan Stanley he secured a $9bn investment from Japanese bank MUFG.
MRI Scans Show Covid Does Impact Your Brain, Say Experts; “Covid-19 has multi-dimensional effects on the body.”
Habiba Katsha – Huff Post
Having Covid can lead to significant changes to the brain, a new study has found. The brains of 46 people who caught Covid within the last six months were analysed by scientists using MRI scans. They then compared them to 30 people who had never caught the infection. Most people who had recovered from Covid had changes of tiny blood vessels in the frontal lobe and brain stem areas, the scientists said. These are involved in certain cognitive skills like language expression and voluntary movements. However, those who did not have Covid-19 did not experience these changes.
New boosters add limited protection against Covid-19 illness, first real-world study shows
Brenda Goodman – CNN
Covid-19 boosters that carry instructions to arm the body against currently circulating Omicron subvariants offer some protection against infections, according to the first study to look at how the boosters are performing in the real world. However, the protection is not as high as that provided by the original vaccine against earlier coronavirus variants, the researchers say. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, called the new data “really quite good.” “Please, for your own safety, for that of your family, get your updated Covid-19 shot as soon as you’re eligible to protect yourself, your family and your community,” Fauci said at a White House briefing Tuesday.
The US Needs Five Times as Many Child Psychiatrists; American kids are struggling and there are too few trained adults available to help them.
Lisa Jarvis – Bloomberg
Between falling test scores and rising rates of mental illness, US kids are not alright. Covid is an easy villain, but signs of strain were showing up well before this virus took hold: Anxiety among children was up 27% and depression 24% between 2016 and 2019, according to data from the National Survey of Children’s Health. Global, national and city-level studies show the pandemic exacerbated an already worrisome trend.
The Real Reasons Your Family Is Sick Right Now; The easy explanation for a rise in non-Covid viruses is that pandemic mitigation measures let our immune systems backslide. But there’s more going on.
Faye Flam – Bloomberg
Something is altering the normal seasonal currents of cold and flu viruses. They slowed to a trickle during the early part of the Covid pandemic only to blast through human populations this year. Some public health experts have called it a “tripledemic,” but it might even be described as a quadrupledemic.
World’s Most Expensive Drug Approved to Treat Hemophilia at $3.5 Million a Dose; CSL Behring’s hemophilia B treatment Hemgenix approved by FDA; Hemgenix is one-time gene therapy administered by IV infusion
Michelle Fay Cortez – Bloomberg
US regulators approved CSL Behring’s hemophilia B gene therapy, a one-off infusion that frees patients from regular treatments but costs $3.5 million a dose, making it the most expensive medicine in the world.
Is a Wealth Tax Xi’s Answer to Fill China’s Empty Coffers?; The rich fear they may be the next target of the country’s common prosperity drive.
Shuli Ren – Bloomberg
After last month’s party congress, speculation has been rampant that China will soon tax its rich. Different options have been floated by mainland academics and lawyers, such as an inheritance tax, a wealth tax, or even an exit tax should high-net-worth individuals renounce their citizenship – a system that is not dissimilar to what the US has.
Bread and Noodle Supplies Face New Threat From Australian Floods; Prices of milling wheat surge on fears of quality downgrades; Chinese buyers may pay more as imports from Australia rise
Sybilla Gross – Bloomberg
Flooding in eastern Australia is hurting the quality of the wheat harvest in one of the world’s biggest exporters, worsening a global shortage of the high-grade variety used to make bread and ramen noodles. That’s going to put a damper on the international wheat market which was counting on a bumper harvest from Australia to ease tight inventories and cool food costs.
Australia to Fix ‘Dog’s Breakfast’ of Pension Fund Disclosure; Legislation forces reporting in same way as public companies; Funds not currently required to disclose outsourced assets
Amy Bainbridge – Bloomberg
Australia plans to overhaul the financial reporting requirements of the country’s A$3.3 trillion ($2.2 trillion) pensions industry to give savers a clearer picture of their investments. The government is tabling new legislation for the so-called superannuation sector that will require funds to disclose their performance in the same way as listed companies.
India’s CoinSwitch launches platform to enable multi-exchange trading with single login
Pradipta Mukherjee – Forkast
Indian crypto exchange CoinSwitch has launched CoinSwitch Pro, a multi-exchange trading platform that lets users trade crypto assets in Indian Rupees across multiple exchanges with a single login. CoinSwitch Pro will also allow users to “discover, compare, and take advantage of arbitrage opportunities, as well as manage investments in a unified portfolio,” the company said in a statement emailed to Forkast on Wednesday.
First Brazilian Corn Shipment Is Heading to China This Week; Vessel Star Iris is set to sail Wednesday from Santos; Move was to diversify suppliers due to surging corn and dollar
Tarso Veloso Ribeiro – Bloomberg
The first vessel carrying Brazilian corn to China is set to sail Wednesday after a deal earlier this year between the two nations. The Star Iris is moored in Santos port, loaded with about 68,000 metric tons of grain for Chinese trader Cofco Corp., according to the shipping agency Alphamar.
Jeff Bezos Donates $123 Million to Help Fight Homelessness; The Amazon.com co-founder with a $115.6 billion fortune has said he plans to give away his wealth during his lifetime.
Dayana Mustak – Bloomberg
Jeff Bezos is giving $123 million to organizations that work to move homeless families into permanent housing. The grants to 40 groups in 26 US states and Puerto Rico – ranging from $600,000 to $5 million – are the latest and largest awards from the Amazon.com Inc. co-founder’s Day One Fund, which was founded in 2018. The donations are effective immediately and are part of a $2 billion total commitment to fighting homelessness, the Day One Fund said Tuesday in a statement.
ConocoPhillips to Take Stake in Sempra LNG US Export Terminal
Gerson Freitas Jr – Bloomberg
ConocoPhillips, one of the largest US oil and gas producers, agreed to take a a 30% stake in the first phase of Sempra Energy’s proposed Port Arthur liquefied natural gas terminal in Texas. The deal involves a 20-year sale and purchase agreement for an annual 5 million metric tons of LNG, and a natural gas supply management agreement whereby ConocoPhillips will manage feedgas supply requirements.