Hits & Takes
John Lothian & JLN Staff
The SEC proposed rules to improve clearing agency governance and to mitigate conflict of interest towards the goal of building more transparent and reliable clearinghouses. SEC Chairman Gary Gensler offered a statement of support, of course, and we have two dissenting statements, one from new Commissioner Mark Uyeda, and the other from Commissioner Hester Peirce.
Kevin Wolf is leaving Euronext, where he served as CEO of Euronext FX and Euronext US, Colin Lambert of The Full FX reported in an apparent scoop. Wolf has not announced his future plans yet. The Trade also reported on Wolf’s departure.
CFTC Commissioner Kristin N. Johnson will host a roundtable for CFTC Staff to discuss digital assets and financial inclusion. Chairman Rostin Behnam will make opening remarks and CFTC Chief Diversity Officer Tanisha Cole Edmonds will make closing remarks for the August 10 virtual event, held from 12:00 pm – 1:00 pm (EDT).
CFTC Chairman Rostin Behnam is seeking nominations for the Agricultural Advisory Committee Membership and public comment on topics for discussion. He should really just send some CFTC staffers to hang out at some feed stores and local coffee shops nearby where farmers congregate to collect ideas for discussion. I am sure they would come back with notebooks full of ideas.
The FBI conducted a search of Mar-a-Lago, the residence of former President Donald Trump, in search of classified documents he may have taken with him after leaving office, instead of turning them over to the National Archives and Records Administration. This unprecedented search of a former president’s residence by the FBI was on August 8, the anniversary of President Richard Nixon resigning from office. FT
It is rather ironic that Bloomberg is reporting on a proposed hosepipe ban in London, which will cause lawns to turn brown, on their Green news page.
And as hot and dry as it is in London, Tokyo has already broken a record for severe heat days in a year with 14 days of 35 degrees Celsius so far.
Euronext is looking for an Apprentice Global Sales Commodities in Paris.
Author and historian David McCullough has died at the age of 89, The New York Times reported. McCullough was the author of several best-selling books, including one on Presidents John Adams and Harry Truman. He was one of my favorite authors and I have read nearly every book he has written, including his book on the Brooklyn Bridge and the incredible story of the Panama Canal, “The Path Between the Seas.”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Registration is open for FIA Expo taking place this 14-15 November at a new location – the Sheraton Grand Riverwalk Chicago. Experience compelling panels that build your knowledge, product demos that deliver innovative solutions, and networking opportunities that celebrate human connections. Whether you’re a trader chasing the latest trends affecting the markets, a back office manager seeking ways to increase operational efficiency or a business strategist looking for what’s next, you’ll find it at Expo. This year, FIA is offering full conference, single day and exhibits plus registration options. Learn more and register by 2 September for the best rates!
What is crypto winter? Here are the basics on this period of market cooling.
Kurt Woock – MarketWatch
In the first half of 2022, the price of every major cryptocurrency dropped. Now, a handful of crypto-related companies are facing serious financial difficulties, including bankruptcy. This period of market cooling has become known as “crypto winter.” Unlike terms such as “market correction” or “bear market,” crypto winter doesn’t have a precise definition.
****** We all know there is a crypto fall, but how about summer and spring?~JJL
First single-bond ETFs look set to revolutionise access to Treasuries; The three funds will hold latest issues of 10-year, two-year and three-month Treasury bonds and bills
Steve Johnson – FT
The first single-bond exchange traded funds in the world are set to list on the Nasdaq exchange on Tuesday, in a move that could revolutionise how some traders access US Treasuries. The launches follow hot on the heels of the first single-stock ETFs in the US and illustrate a growing trend for vehicles to target ever more specific exposures, eschewing the diversification at the heart of the traditional fund structure.
****** ETFs continue to come up with new and amazing ways to make simple things more layered and complicated, yet simple.~JJL
Qantas asks executives to work as baggage handlers for three months
Peter Hoskins – BBC
Australian airline Qantas has asked senior executives to work as baggage handlers for three months as it tries to tackle an acute labour shortage. The firm’s head of operations is looking for at least 100 volunteers to work at Sydney and Melbourne airports.
****** Very Senior Baggage Handler?~JJL
Mexico Should Stop Making Beer in Drought-Plagued North, AMLO Says
Max de Haldevang and Andrea Navarro – Bloomberg
Mexico, the world’s largest beer exporter, should stop making the drink in the north of the country as the region faces severe water shortages, President Andres Manuel Lopez Obrador said Monday.
******OK, NOW WE HAVE A PROBLEM!!!~JJL
Monday’s Top Three
Our top story on Monday was The Humbling of Coinbase, from the New York Times. Second was the notice and registration page for FIA Expo 2022, which will take place on November 14 and 15 at the Sheraton Grand Chicago Riverwalk. Third was the CFTC complaint, CFTC Charges Nevada Metals Trader with Spoofing in Gold and Silver Markets.
26,967 pages; 240,094 edits
U.S. sanctions crypto mixing service Tornado Cash, citing North Korea ties
David Hollerith and Jennifer Schonberger – Yahoo Finance
The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced Monday it sanctioned major web3 mixing service, Tornado Cash. OFAC said the service is often used by well known North Korean state sponsored hacking cell Lazarus Group, a cohort of prolific crypto hackers which are known to use stolen funds to help the rogue state finance its nuclear weapons program. “Despite public assurances otherwise, Tornado Cash has repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors on a regular basis and without basic measures to address its risks,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson.
SEC Proposes Rules to Improve Clearing Agency Governance and to Mitigate Conflicts of Interest
The Securities and Exchange Commission today proposed new rules to help improve governance arrangements across all registered clearing agencies by reducing the likelihood that conflicts of interest may influence the board of directors or equivalent governing body of a registered clearing agency. “I was pleased to support this proposal because, if adopted, it would enhance governance standards for all registered clearinghouses, particularly with regards to conflicts of interest,” said SEC Chair Gary Gensler. “I think these rules would help to build more transparent and reliable clearinghouses. This in turn would help ensure our markets are more resilient, protecting investors and building trust in our markets.”
Euronext FX CEO Leaves
Colin Lambert – The Full FX
Kevin Wolf, CEO of Euronext FX and Euronext US, is leaving the group to pursue other external opportunities. Confirming his departure, the company says the managing board of Euronext “thanks him for his significant contribution” to the business. Wolf joined Euronext just under five years ago from a short spell with Viable Markets, prior to which he spent almost six years with Eris Exchange. He started his career in banking with Lehman Brothers’ fixed income group over a seven-year spell, before moving to Bank of America for four years, where he was managing director, global capital markets. He is currently chair of the FX Professional Association.
Euronext FX chief departs after five years with exchange operator; Departing executive has previously served at Lehman Brothers, Bank of America Merrill Lynch, Eris Exchange and Viable Markets.
Annabel Smith – The Trade
Euronext veteran Kevin Wolf has left the firm after five years serving in various executive positions including as it’s the chief executive of its FX division. Wolf originally joined Euronext in 2017 as head of fixed income, currencies and credit (FICC) for the US, assuming his most recent role as chief executive of Euronext FX in 2018.
Treasury Dept. blacklists crypto platform used in money laundering; The crackdown was the government’s latest effort to rein in the crypto industry.
David Yaffe-Bellany – The New York Times
The Treasury Department on Monday prohibited Americans from using the cryptocurrency platform Tornado Cash, saying the service has helped criminals launder more than $7 billion of virtual currencies. The crackdown was the U.S. government’s latest effort to rein in the crypto industry, as lawmakers and regulators grow increasingly concerned over the volatility of virtual currencies and their role in facilitating hacking and other crimes. Calling the platform a “threat to U.S. national security,” the Treasury Department placed Tornado Cash on a blacklist of entities, making it illegal for Americans to send or receive money using the service.
North Korea has laundered $1 billion in crypto via Tornado Cash – and the US Treasury just slammed the platform with sanctions
Phil Rosen – Business Insider
The US Treasury sanctioned Tornado Cash, a cryptocurrency platform used by criminals for obscuring origins of funds. As of Monday, all US entities or persons are barred from using Tornado Cash. North Korea cyber-criminals have laundered $1 billion in crypto through this platform, TRM Labs said. The US Treasury Department’s Office of Foreign Asset Control on Monday sanctioned crypto platform Tornado Cash, which North Korean hackers have used for laundering.
Wall Street Pros Offer Crypto Holders a Backdoor Bankruptcy Exit; Claims traders have turned an eye toward crypto bankruptcies; Crypto investors barred from accounts can exit at a discount
Jeremy Hill – Bloomberg
Niche credit traders have a pitch for crypto holders locked out of their accounts at Voyager Digital Ltd. and Celsius Network LLC: Sell the rights to your coins at something like a 75% discount and let Wall Street worry about the rest. When crypto lenders Voyager and Celsius went bankrupt last month, they turned their customers into creditors. Those users cannot touch their coins and don’t know when they will get repaid, how much they might recoup or what form payouts could take.
BitMEX Executive Pleads Guilty to Violating Anti-Money Laundering Act
Elizabeth Napolitano – CoinDesk
A high-ranking employee at off-shore, crypto derivatives exchange BitMEX has pleaded guilty for violating a U.S. federal anti-money laundering law, the United States Attorney for the Southern District of New York announced Monday. Gregory Dwyer, who formerly served as BitMEX’s head of business development, pleaded guilty to violating the Bank Secrecy Act for “failing to establish, implement, and maintain an anti-money laundering program” at BitMEX.” .
Why Carlyle’s Billionaire Founders Had Enough of Their Chosen Successor; Tensions mounted for months before Kewsong Lee’s resignation; Insiders say focus was on leadership; strategy to remain same
Heather Perlberg and Dawn Lim – Bloomberg
Inside Carlyle Group, battle lines were forming. On one side: Kewsong Lee, the executive hand-picked to assume the mantle of Carlyle’s co-founders and clear the path for a new generation of leaders. On the other: the very people who hand-picked him. Growing tensions within the private-equity firm — between a new CEO eager to assert power and an old guard reluctant to give it up — reached the breaking point last week. Carlyle’s board members decided they had lost confidence in Lee’s leadership. The CEO, after seeking a larger pay package for his contract set to renew at the end of 2022, abruptly stepped down.
Carlyle CEO’s Early Contract Proposal Was Met With Silence From Firm’s Board; Kewsong Lee, who is stepping down, submitted an initial proposal last spring, sources say
Miriam Gottfried – WSJ
As Kewsong Lee’s five-year contract was drawing to a close, advisers to Carlyle Group Inc.’s CEO worked with representatives of the buyout firm to prepare an initial proposal for a new deal. Submitted this past spring, the contract proposal never got a response from Carlyle’s board, according to people familiar with the matter.
DSB Calls for Participation in Technology Advisory Committee
The Derivatives Service Bureau (DSB), founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of International Securities Identification Numbers (ISINs), Classification of Financial Instrument codes (CFIs) and Financial Instrument Short Names (FISNs) for OTC derivatives, has announced it is seeking additional members to join the DSB’s Technology Advisory Committee (TAC). The DSB is inviting applicants to participate in the next term of the TAC which starts in October 2022, with an application deadline of 20th September.
An Elegant Solution to PFOF and Related Perversions
Daniel Schlaepfer, Ian Bandeen – IB Times
As Payment-for-Order-Flow (PFOF) is coming under increased scrutiny in both the US and EU, professional trading chiefs propose a unique solution of their own. The current concerns about Payment for Order Flow (PFOF) in both the EU and the US arise from the same fundamental regulatory flaw that has encouraged the cannibalization of retail order flow by dark markets and order types and that has fostered the proliferation of inverted markets.
Buy-side firms could face increased scrutiny of their trading practices under new supervisory guidelines; New guidelines published by ESMA and the European Banking Authority will allow for an assessment used to take supervisory measures to address risks and concerns among investment firms.
Wesley Bray – The Trade
The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) have published final guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) for investment firms. The finalised guidelines are based on the Investment Firms Directive (IFD) and look to harmonise the supervisory practices regarding the SREP of investment firms.
Russia uses NGO report to fuel war propaganda
Amnesty said Ukrainian forces have put civilians in harm’s way by setting up military bases in residential areas, violating international humanitarian law. Ukrainian president Volodymyr Zelensky and other top officials slammed the Amnesty report, saying it “shifts responsibility from the aggressor to the victim.” CNN’s Alex Marquardt reports.
New Ukraine military package is largest yet, Pentagon says; Announcement comes as Ukrainian forces seek to retake southern city of Kherson
Karoun Demirjian – The Washington Post
The Pentagon on Monday said it is sending Ukraine an additional $1 billion in military assistance, including tens of thousands more munitions and explosives — the largest such package since Russia launched its invasion in February.
Pentagon acknowledges sending previously undisclosed anti-radar missiles to Ukraine
Oren Liebermann – CNN
The Pentagon announced Monday that the US has sent anti-radar missiles for Ukrainian aircraft to target Russian radar systems, marking the first time the Defense Department has acknowledged sending the previously undisclosed missile to Ukraine. Colin Kahl, the under secretary of defense for policy, said at a press briefing that the US had sent “a number” of the missiles without specifying how many the US has provided or when they were sent. Kahl did not explicitly say what type of anti-radiation missile was sent. A defense official told CNN the type of missile sent was the AGM-88 High-Speed Anti-Radiation Missile (HARM).
Ukraine says it hit Russian troop bases, key bridges in overnight strikes
Ukraine conducted long-range strikes on Russian troop bases and two key bridges across the Dnipro river overnight, Ukrainian officials said on Monday. The strikes hit the only two crossings Russia has to the pocket of southern Ukrainian territory it has occupied on the western bank of the vast Dnipro river, said Natalia Humeniuk, spokesperson for Ukraine’s southern military command.
Ukraine receives three German anti-aircraft systems
Ukraine has received its first three German Gepard self-propelled anti-aircraft systems and will use them to defend important infrastructure facilities, the southern military command said on Monday.
Zelensky calls on West to ban all Russian travelers
Isabelle Khurshudyan – The Washington Post
The way to stop Russia from annexing any more of Ukraine’s territory, President Volodymyr Zelensky said Monday, is for Western countries to announce that they would ban all Russian citizens in response. In a wide-ranging interview with The Washington Post, Zelensky said that “the most important sanctions are to close the borders — because the Russians are taking away someone else’s land.” He said Russians should “live in their own world until they change their philosophy.”
Exclusive: Russia starts stripping jetliners for parts as sanctions bite
Russian airlines, including state-controlled Aeroflot, are stripping jetliners to secure spare parts they can no longer buy abroad because of Western sanctions, four industry sources told Reuters.
Putin allows Russian banks under sanctions to halt some FX operations
Russian banks that have their foreign currency funds frozen due to western sanctions can suspend operations in such currencies with their corporate clients, according to a decree signed by President Vladimir Putin on Monday.
Russian Oil Flows Halted Through Pipeline to Central Europe; Transit fee for Druzhba returned due to sanctions: Transneft; Hungary vulnerable, flows to Germany and Poland unaffected
Europe’s energy security took another hit after Russian crude flows through Ukraine to Hungary, Slovakia and the Czech Republic were halted because sanctions prevented payment of a transit fee.
Russia May Give Up Majority Stake in Eurasian Development Bank; Kremlin holds a 66% stake in the development institution; Kazakhstan may become the lender’s largest shareholder
Russia plans to give up its majority stake in Eurasian Development Bank, formed by six former Soviet states to promote economic integration, to reduce the risk the lender will be targeted by sanctions, according to three people with knowledge of the plan.
Exchanges, OTC and Clearing
HKEX Welcomes First MSCI China A 50 Connect Index Structured Products
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to welcome today (Monday) the listings of the first A-share structured products, MSCI China A 50 Connect Index Derivatives Warrants, further enhancing Hong Kong’s role as an offshore A-share risk management centre. The new derivative warrants listed on HKEX are based on the MSCI China A 50 Connect Index, which tracks the performance of 50 key Shanghai and Shenzhen stocks available via Stock Connect.
The Tel-aviv Stock Exchange Reports The Results Of The Financial Statements For The Second Quarter And The First Half Of 2022
The Tel Aviv Stock Exchange Ltd. (TASE)
TASE Concludes the Second Quarter with a 36% Increase in EBITDA Compared to the Corresponding Quarter Last Year; Quarterly Revenues Increased by 8% with Growth Across All TASE Activity. Revenues in the second quarter of 2022 totaled NIS 91 million, an 8% increase compared to the revenues in the corresponding quarter last year. Expenses reduced by 3% in the second quarter of 2022 compared to the expenses in the corresponding quarter last year. The profit in the second quarter of 2022 totaled NIS 14 million, compared to NIS 12 million in the corresponding quarter last year, an increase of 18% between the quarters.
LIBOR Alternatives; The once-influential benchmark interest rate has been phased out
Adam Hayes – AFX
The London Interbank Offered Rate, better known as LIBOR, was once the most important benchmark interest rate for setting the price of overnight and short-term loans that banks make to one another. This reference rate served as the foundation for other types of loans made by financial institutions including mortgages, auto loans, and financial products like credit default swaps (CDS). All of these and more were tied to the LIBOR rate in some fashion. Key https://bit.ly/3JG0sPg
OTC Platform Advisory – Anonymous Execution Indicator for the CFTC Part 45 Regulations rewrite
Please be advised that CFTC regulation § 45 technical specification require the identification of trades executed anonymously for reporting purposes from December 5, 2022. To allow significant time for submission platforms to test the change, CME Clearing (CME) will make the following changes for all OTC trades in New Release on Wednesday, August 10, 2022: Submission Change Platform can send CME an anonymous indicator tag (AnonymsTrdInd) in TrdCaptRpt block in new incoming trades.
SEOCH Reserve Fund Variable Contributions
Please be advised that The SEHK Options Clearing House Limited (SEOCH) has re-calculated the Reserve Fund Requirement pursuant to SEOCH Rule 407 and Clearing House Procedures. The new market total Variable Contribution (“VC”) of HK$635 million after the recalculation will be shared by all the SEOCH Participants based on their daily average total margin requirement and net premium paid during the period from 13 May 2022 to 8 August 2022 in accordance with Chapter 11 of the Operational Clearing Procedures for Options Trading Exchange Participants of SEOCH.
Moscow Exchange improves the convenience of repo transactions with settlements in yuan
Starting August 15, 2022, the Moscow Exchange will expand the trading time on the money market for concluding repo transactions with the central counterparty (CC) with settlements in Chinese yuan and extending the settlement time for them. The innovation will provide new opportunities for professional market participants and their clients and increase the convenience of transactions with settlements in Chinese yuan.
Moscow Exchange updates the design of perpetual currency futures
The Moscow Exchange, on the recommendation of the Derivatives Market Committee, plans to implement a mechanism for the execution of perpetual currency futures. Trading participants and their clients four times a year, one day before the expiration of the quarterly futures on the corresponding underlying asset, will be able to submit an instruction to execute the perpetual futures on the quarterly. Perpetual futures execution will be available from December 2022.
Meta’s AI Chatbot Repeats Election and Anti-Semitic Conspiracies
Charlie Hancock – Bloomberg
Only days after being launched to the public, Meta Platforms Inc.’s new AI chatbot has been claiming that Donald Trump won the 2020 US presidential election, and repeating anti-Semitic conspiracy theories.
Twitch’s Gambling Boom Is Luring Gamers Into Crypto Casinos; Overseas site partners with Twitch streamers to gamble with crypto—and their fans follow suit
Cecilia D’Anastasio – Bloomberg
Enneric Chabot, 26, didn’t start gambling until he saw his favorite gamers doing it online. Three years ago, Chabot began regularly watching Felix “xQc” Lengyel, a former professional Overwatch player, as he competed in various video games on Amazon.com Inc.’s livestreaming site Twitch for audiences of up to 25,000 viewers. In 2021, during some of his streams, Lengyel started playing something else—online blackjack.
Bookbuilding platform Appital secures additional £1.7 million investment; The financing, led by Frontline Ventures, follows a successful funding round last year, bringing the total investment to date to £4.85 million.
Wesley Bray – The Trade
Appital has secured an addition £1.7 million from Frontline Ventures and several other angel investors, to bring technological innovation and automation to equity markets. The latest investment follows a £2.5 million funding round last year, which brings the total investment raised to date to £4.85 million.
Why the fintech lender Avant is partnering with Major League Soccer
Jordan Stutts – American Banker
The fintech lender Avant will have a major presence in Saint Paul, Minnesota, this week amid the hoopla surrounding Major League Soccer’s All-Star Game.
The Chicago-based company recently became the league’s exclusive credit card sponsor — part of a play for growth in a sport whose fans skew younger and more diverse than other U.S. professional sports leagues.
Fintech Firms’ Tracing Tools Let Government Auction Crypto
Josh Axelrod – Bloomberg Law
The federal government’s chief operations agency has auctioned off $1.5 million worth of cryptocurrency over the last year and a half even as regulatory and enforcement bodies crack down on crypto schemes and stake out jurisdiction.
The General Services Administration, which manages disposal of outdated, surplus, or seized federal assets, has held nine cryptocurrency sales since March 2021, receiving more than 4,000 online bids from buyers, according to an agency spokesperson.
A marquee week for cybersecurity in Vegas- POLITICO
Maggie Miller – Politico
Federal cybersecurity officials and industry experts will make the annual pilgrimage to Las Vegas this week for the Black Hat and DEFCON conferences, where the impact of the war in Ukraine, election security and other issues will be in the spotlight.
Automotive Cybersecurity Market worth $5.3 billion by 2026
Automotive Cybersecurity Market size is projected to grow from USD 2.0 billion in 2021 to USD 5.3 billion by 2026, at a CAGR of 21.3%, according to a new report by MarketsandMarkets™. Increasing demand for connected vehicles and semi-autonomous vehicles has led to a growing demand for connected devices in automobiles. This increased the complexity of vehicle E/E architecture and software codings, which led to automobiles being more vulnerable against a cyber-attack. Thereby, to safeguard the vehicles from such kind of attack the market of automotive cybersecurity solutions has been developing at a rapid pace. Automobile safety and connectivity are gradually becoming a major feature in mid-priced and luxury automobiles. This will increase the demand for automotive cybersecurity solutions in these vehicles. Moreover, the recent launch of UNECE WP.29 regulation and “Auto Data” regulation are further expected to accelerate the markets growth momentum in the coming years globally.
Your cybersecurity staff are burned out – and many have thought about quitting
Danny Palmer – ZDNet
Cybersecurity staff are feeling burnout and stressed to the extent that many are considering leaving their jobs. According to research by VMware, 47% of cybersecurity incident responders say they’ve experienced burnout or extreme stress over the past 12 months.
Crypto.com enters South Korea market with two local startup acquisitions
Pradipta Mukherjee – Forkast
Cryptocurrency platform Crypto.com has forayed into South Korea with two acquisitions — payment service provider PnLink Co. and virtual asset service provider OK-BIT Co., the company said.
Amber Group Brings Retail Trading Platform to Brazil
Paulo Alves – CoinDesk
Singapore-based Amber Group, which provides liquidity and market-making services mostly in Asia, has expanded its retail trading operation to Brazil. “WhaleFin is our newest product interface that allows customers to connect to our app, web or API to trade, earn, exchange tokens, among other products,” Nicole Pabello, Latin America managing director at Amber Group, told CoinDesk.
Crypto Options Trading on Solana Has Mostly Fizzled. A New DEX Has a Plan to Change That
Danny Nelson – CoinDesk
Even for traditional finance pros, talk of “portfolio margining” is the kind of thing that’ll make most eyes glaze over. And yet it’s vital plumbing that helps make conventional markets work. A DeFi project building here at the MtnDAO hacker house in Salt Lake City is bringing the concept to cryptocurrency options, hoping that’ll make trading the derivatives on the Solana blockchain more appealing.
Binance tells estranged partner WazirX customers to move funds, discontinue off-chain transfer
Manish Singh – TechCrunch
Binance has told customers of its estranged partner WazirX to move their funds to the global crypto exchange platform and said it plans to remove off-chain fund transfer between the services in the latest escalation of tension between the firms over ownership of the Indian startup. Patrick Hillmann, chief communications officer of Binance, said in a televised interview Monday that the company is aiming to protect the interest of customers by asking them to move their funds to the world’s largest crypto exchange by trade volume.
Tornado’s Crypto Token TORN Nosedives After US Sanctions; Tornado Cash was used by cyber criminals to launder funds; TORN’s price has fallen around 95% from its all time highs
Sidhartha Shukla – Bloomberg
Tornado Cash’s token TORN fell sharply on Tuesday after the US Treasury Department imposed sanctions on the cryptocurrency mixer. TORN was down 24% during Asian hours to $22, according to CoinGecko data. The token has lost 95% of its value since its all-time high in February 2021.
Bankrupt Lender Celsius’ Token Surges on Twitter-Driven Short Squeeze
Krisztian Sandor – CoinDesk
Bankrupt crypto lender Celsius Network’s CEL token jumped to $1.63 on Monday, and is now trading at a higher price than before Celsius encountered financial difficulties and halted user withdrawals. The CEL token dropped to as low as 15 cents on June 12 when the embattled crypto lender announced that it was halting withdrawals. Its current price marks a tenfold rise in less than two months, and a 300% gain since July 13 when Celsius filed for bankruptcy protection, according to data on crypto intelligence platform Messari.
Crypto’s Limp BlackRock Response Is a Clear Tell; If not even a vote of confidence from the world’s largest asset manager can spark a rally, then the bear market is far from over.
Jared Dillian – Bloomberg
You would think the news that Coinbase Global Inc. had entered into a partnership with BlackRock Inc. to help institutional investors manage and trade Bitcoin would energize the slumping cryptocurrency market. After all, if the world’s largest asset manager is interested in transacting in Bitcoin, it would mean Bitcoin and crypto in general had just been given its imprimatur. That is what the crypto folks have been looking for all along, which is some recognition that crypto is a legitimate asset class to go along with equities, fixed income, commodities and currencies.
Norwegian Bitcoin Miner Heads North to Escape Record Power Bills; Energy crisis is made worse in Norway by low hydro reservoirs; Norway has attracted crypto miners with cheap, green power
Ott Ummelas and Lars Paulsson – Bloomberg
Soaring power prices are forcing a Bitcoin miner and data center operator in southern Norway to head north. Kryptovault AS is moving operations north of the Arctic Circle, where electricity is much cheaper, Chief Executive Officer Kjetil Hove Pettersen said. Staying put would mean doubling a power bill that last year hit 202 million kroner ($21 million) and typically makes up more than 80% of the company’s operating expenses, he said.
Trump Raid Should Just Be Garland’s Opening Act; The attorney general needs to demonstrate that no one is above the law and indict the former president regardless of political fallout.
Timothy L. O’Brien – Bloomberg
We now know that the Justice Department and the Federal Bureau of Investigation have an active interest in Donald Trump because Trump told us so. “My beautiful home, Mar-A-Lago in Palm Beach, Florida, is currently under siege, raided, and occupied by a large group of FBI agents,” Trump said in a rambling statement he released on Monday evening. “They even broke into my safe!”
How a Last-Minute Lobbying Blitz Watered Down a Climate Bill Tax; The new corporate minimum tax is not law yet and is already rife with exceptions for the businesses that might have to pay it.
Alan Rappeport – The New York Times
An hour after Democrats released the text of their climate and tax legislation, Washington lobbyists for the private equity industry sprang into action. With a final Senate vote nearing on the major package on Sunday, a late addition would have subjected companies controlled by private investment funds to a new 15 percent corporate minimum tax in the legislation that was supposed to apply to America’s biggest corporations.
US Secretary of State Tweets, Deletes Claim That Crypto Mixer Tornado Cash Is North Korea-Sponsored
Nikhilesh De – CoinDesk
The U.S.’s top diplomat appeared to claim – briefly, anyway – that cryptocurrency mixing service Tornado Cash was a North Korean hacking group. Secretary of State Antony Blinken raised eyebrows Monday when he tweeted that the U.S. Treasury Department had “sanctioned virtual currency mixer Tornado Cash, which is a U.S.-sanctioned, [Democratic People’s Republic of Korea, North Korea’s official name] state-sponsored hacking group, used by the DPRK to launder money.” One hour and three minutes later, the tweet had been deleted and replaced with what the Treasury Department actually alleged earlier that day: Tornado Cash was used by a North Korean hacking group to launder funds.
WazirX Co-Founder Nischal Shetty Speaks Out on Spat With Binance CEO
Amitoj Singh – CoinDesk
Nischal Shetty, the co-founder of WazirX, rebuffed a number of claims made by Binance CEO Changpeng Zhao over Twitter. Zhao says Binance does not own WazirX, the target of a money laundering investigation launched by India’s Directorate of Enforcement against Zanmai Labs, the Indian entity of WazirX’s Singapore parent. That investigation included a raid last week against one of WazirX’s directors.
UK seeks guidance on how to regulate crypto, digital assets
Ningwei Qin – Forkast
A U.K. parliamentary group is seeking advice from both industry players and policymakers on regulating cryptocurrencies and the digital asset sector, according to a press release.
Morgan Stanley reaches agreements to resolve SEC, CFTC investigations
Morgan Stanley said on Friday it had reached agreements with two regulatory agencies to resolve record-keeping investigations about business communications on messaging platforms not approved by the bank.
US Treasury imposes sanctions on ‘crypto mixer’ over alleged laundering; Ofac says cyber criminals have used Tornado Cash service to launder more than $7bn
Scott Chipolina and James Politi – FT
The US has imposed sanctions on a crypto “mixing service” that it alleges laundered more than $7bn over the past three years and helped North Korean state hackers evade US penalties. The Treasury department said on Monday that Tornado Cash was regularly used by malicious cyber actors since it was founded in 2019. The total allegedly laundered includes $455mn taken by state-sponsored North Korean hackers Lazarus Group in March, as well as $96mn from June’s hack of Harmony Horizon Bridge.
US imposes sanctions on cryptocurrency mixer that allegedly laundered over $7 billion
Jon Fingas – Engadget
The US is ramping up its efforts to crack down on shady cryptocurrency mixers. The Treasury Department has imposed sanctions on Tornado Cash, a mixer that allegedly helped launder more than $7 billion in stolen crypto funds since its inception in 2019. Like a previous sanctions target, Blender, Tornado Cash is accused of “indiscriminately” helping thieves by hiding transaction details while failing to institute meaningful anti-laundering safeguards. North Korea’s state-sponsored Lazarus Group hackers are believed to have funneled $455 million through the mixer. The sanctions block transactions with or for the benefit of Tornado Cash-related individuals and entities, whether they’re located in the US or controlled by Americans. Anyone who detects banned activity is required to inform the Treasury’s Offices of Foreign Assets Control.
Commissioner Johnson to Host Roundtable for CFTC Staff on Digital Assets and Financial Inclusion
Commissioner Kristin N. Johnson to host a roundtable for CFTC Staff on digital assets and financial inclusion with opening remarks by Chairman Behnam and closing remarks by CFTC Chief Diversity Officer Tanisha Cole Edmonds. WHEN: Wednesday, August 10, 2022, 12:00 pm – 1:00 pm (EDT).
CFTC Chairman Rostin Behnam Seeks Nominations for Agricultural Advisory Committee Membership and Public Comment on Topics for Discussion
Commodity Futures Trading Commission Chairman Rostin Behnam, sponsor of the CFTC’s Agricultural Advisory Committee (AAC), is seeking nominations for AAC membership and the submission of public input on the AAC’s upcoming priorities through a formal request published in today’s Federal Register. The deadline for submissions is September 7, 2022.
Statement on Proposal to Enhance Clearing Agency Governance
Chair Gary Gensler – SEC
Today, the Commission voted to propose rules to strengthen the governance of registered clearing agencies, also known as clearinghouses. This proposal would, among other things, fulfill Section 765 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, where Congress directed the Commission to address conflicts of interest for security-based swap clearinghouses. I was pleased to support this proposal because, if adopted, it would enhance governance standards for all registered clearinghouses, particularly with regards to conflicts of interest. This would help to promote their transparency, resilience, and reliability.
Statement on Clearing Agency Governance and Conflicts of Interest
Commissioner Mark Uyeda – SEC
Clearing agencies form critical components of the U.S. financial market infrastructure by facilitating the securities transaction lifecycle. The 2017 U.S. Department of the Treasury Report on Capital Markets emphasized that clearing agencies, and financial market utilities generally, serve a core function in financial market infrastructure:
Dissenting from Stakeholder Governance for Clearing Agencies
Commissioner Hester Peirce – SEC
Clearing agencies and other clearinghouses play a central role in our financial markets. That role continues to increase as market participants and regulators look to these entities to mitigate and manage risk. Accordingly, as the proposing release recognizes, how clearinghouses are governed and managed matters. The proposal takes an overly prescriptive, regulator-knows-best approach to these matters that risks diluting the duties of directors to the clearing agency and depriving clearing agencies of the flexibility and expertise needed for effective governance.
Congress has over 150 Pending Crypto Legislation Pieces
Shanny Basar – MarketsMedia
More than 150 pieces of legislation related to blockchain, decentralized finance, cryptocurrencies, digital or virtual currencies, and other digital assets have been introduced since the start of the most recent Congress, which would need to be more aligned if they pass, according to Moody’s Investors Service.
Playing the green card
Deputy Chair Karen Chester – ASIC
ASIC’s information sheet for superannuation and investment funds can help your company avoid greenwashing or overstating green credentials, writes deputy chair Karen Chester. Climate change remains one of the most significant risks facing the global community. In response to investor demand, sustainability-labelled investments have more than doubled between 2019 – 21 in our region alone, according to Morningstar Australia. Globally, Bloomberg Intelligence estimates environmental, social and governance (ESG) assets are projected to exceed US$53 trillion by 2025 and represent more than a third of total assets under management. Transparency and trust are paramount to ensuring investor confidence as the market for these products continues to develop and grow.
FCA and PSR, Joint Regulatory Oversight Committee co-chairs, appoint Bryan Zhang as Strategic Working Group Chair; The Joint Regulatory Oversight Committee (JROC), a cross-authority taskforce responsible for, among other things, thinking about the future vision and governance of open banking, has announced the set-up of a strategic working group (SWG).
The committee believes there is potential to build on the progress of open banking, to drive further benefits for consumers and businesses, and maintain the UK’s position as a leader in innovation. As we do this, we are keen to work closely with the industry and other key stakeholders. The SWG will help facilitate this.
NPL Ratio for Domestic Banks as of the End of June 2022
The Financial Supervisory Commission (the FSC) has released that total outstanding loans extended by the current 39 domestic banks increased by NT$188.1billion (US$6.33billion) as compared to the figure of previous month and amounted to NT$35.41trillion (US$1,191.4billion) at the end of June 2022. Meanwhile, the NPLs of these banks totaled at NT$56.32billion (US$1.89billion) which decreased by NT1.16$billion (US$0.04billion) from NT$57.48billion (US$1.93billion) as of the end of the previous month.
Investing and Trading
Worried About Your Equifax Credit Score? Here’s What to Do; Some people applying for mortgages, auto loans and credit cards had their scores changed by 20 points or more
Julia Carpenter – WSJ
Earlier this year, Equifax sent lenders inaccurate credit scores for millions of would-be borrowers over a three-week period. Now, many who applied for home or other loans at the time are scrambling to determine whether the mistake affected them.
Meme-Stock Frenzy Returns, Baffling Wall Street’s ‘Smart Guys’; Bed Bath & Beyond nearly triples as retail traders pounce; Heavily-shorted stocks, de-SPACs are part of broader rebound
Bailey Lipschultz and Elena Popina – Bloomberg
Retail traders who lurk in forums like Reddit’s WallStreetBets are back to betting against Wall Street pros and the Federal Reserve as rallies for meme stocks like Bed Bath & Beyond Inc. and AMC Entertainment Holdings Inc. show shades of last year’s mania. The home-good retailer nearly tripled at one point during its nine-day winning streak while the movie-theater firm capped a 65% rally of its own as speculative pockets of the stock market surge. The pair have powered a basket of 37 meme stocks tracked by Bloomberg higher by 10% over the past week while the most-hated stocks tracked by a Goldman Sachs Group Inc. basket is up roughly 17% over the same period.
2-10 Yield Curve Inversion: How Low Will It Go?
Kevin Dribnenki – MX
As economists and portfolio managers know, the slope of the 2-10 yield curve1 in Canada inverted in mid-July and has continued to fall to levels not observed in the past 15 years or longer. This large flattening of the yield curve has occurred in many different segments, from 1-2 to 2-10 with only (so far) the 5-10 and segments incorporating the longest of bond maturities2 at positive levels on the final trading day of July. Many of these segments of the yield curve have now reached levels flatter (more inverted, usually) than observed in the approach to the 2008 financial crisis, the intervening years of low yields and slowly recovering economies in both Europe and North America, and the 2020 market panic at the onset of the global COVID-19 pandemic.
Environmental, Social and Corporate Governance
Low water levels mean Rhine is days from being shut for cargo; Businesses along the river say drought means they are on the verge of having to shut production
Kate Connolly – The Guardian
Germany’s Rhine, one of Europe’s key waterways, is just days away from being closed to commercial traffic because of very low levels caused by drought, authorities and industry have warned. Crucially, the impending crisis could lead energy companies to cut their output, one of the country’s biggest gas companies has said. Businesses located along the Rhine or dependent on it to transport or receive goods are warning that they have been forced to scale back activities and reduce loads drastically – and are now on the verge of having to close some production if cargo ships are no longer able to access the river.
Commenting on the passage of the US Inflation Reduction Act through the Senate, Gregory Hershman, Head of US Policy at the Principles for Responsible Investment, comments:
“The Senate’s approval of $369 billion in climate-related funding is a much-needed jump start for efforts to combat climate change. The climate crisis is not a partisan agenda, it is a scientific reality which affects every community, every market, and every family in the United States. Retirement savings are already under threat from the climate impacts we’re seeing in our communities from drought, fires and record-breaking heat. To prevent the worst of this impact, we need coordinated efforts across federal, state and local governments – with this bill constituting a significant step in the right direction. Now, we must ensure investors are equipped to consider climate risk, and to act accordingly to protect the financial interests of working families across the country. The passage of this bill signifies that we have crossed a major hurdle and can now come together to support additional climate action that ensures a just, inclusive and orderly transition to net zero.”
World Standard-setters Conference 2022
26 – 27 September 2022; Hilton London Canary Wharf, South Quay, Marsh Wall, London, E14 9SH; The World Standard-setters Conference provides an opportunity to get an update on and discuss the IFRS Foundation’s activities. It offers interactive Q&A sessions, panel discussions and networking opportunities with fellow delegates, IFRS Foundation staff and members of the IFRS Foundation’s two standard-setting boards—the International Accounting Standards Board (IASB) and the recently created International Sustainability Standards Board (ISSB).
London to Be Hit With Hosepipe Ban as Heat Wave Nears
Priscila Azevedo Rocha – Bloomberg
Londoners have been told to prepare for a hosepipe ban as the city faces another heat wave. Thames Water, the utility that serves London, said it could not confirm exactly when the ban would kick in but urged families to use as little water as they need to get by. “Given the long-term forecast of dry weather and another forecast of very hot temperatures coming this week we are planning to announce a temporary use ban in the coming weeks,” a spokesperson for Thames Water said.
Tokyo Has Already Broken a Record For Severe Heat Days in a Year; Capital had 14th day of temperatures of at least 35 Celsius; Scorching weather is straining power grids around the world
Shoko Oda – Bloomberg
Tokyo broke a record for the number of days of severe heat in a year by the mid-point of summer, underscoring the extreme weather that’s put the Japanese capital’s power grid under strain. Temperatures reached 35 Celsius (95 Fahrenheit) for the 14th time this year in Tokyo, breaking previous annual records of 13 such days in 1995 and 2010, according to an official at the Japan Meteorological Agency. The authority uses that temperature level to categorize days as severely hot.
Robinhood is ‘actually already profitable in real-time,’ analyst argues
Dani Romero – Yahoo Finance
Robinhood’s (HOOD) dramatic moves last week to reduce costs — including cutting 23% of its staff — raised questions about the company’s future. But one analyst remains bullish that the company can turn the corner, especially with new product launches on the horizon.
The private equity club: how corporate raiders became teams of rivals; The industry was founded by mercenary dealmakers who bludgeoned opponents. But firms now nurture complex relationships with their competitors
Antoine Gara – FT
When buyout groups Hellman & Friedman and Permira began stalking a takeover of business software giant Zendesk in February, they tried to bring in a third partner for what would be a large deal. They called Blackstone, a firm that manages more than $125bn in private equity assets and that they each knew well from previous transactions.
Poor Demand for Its Covid Vaccine Prompts Novavax to Cut Sales Forecast; The vaccine maker reduced its 2022 guidance to a maximum of $2.3 billion, down from its previous estimate for as much as $5 billion
Joseph Walker – WSJ
Novavax Inc. slashed its full-year revenue outlook in half on Monday, citing a lack of demand for its Covid-19 vaccine from an international initiative to vaccinate lower-income countries and delays in winning expanded authorizations in the U.S. Novavax said Monday it now expects 2022 sales between $2 billion and $2.3 billion, down from its previous forecast of $4 billion to $5 billion.
One of the Decade’s Hottest Bond Markets Is Imploding in China
Rebecca Choong Wilkins and Lulu Chen – Bloomberg
When investor demand for Chinese property debt was approaching its peak back in 2018, a banker could pull together the makings of a multi-million dollar deal during a Saturday boat trip around Hong Kong’s harbor and barely look up from her drink while doing it.
Sweden’s junior market becomes Europe’s hottest for growth stocks; Retail investors boost Stockholm’s First North Growth Market despite equity market downturn
Ian Johnston – FT
Sweden’s junior market became Europe’s hottest market to raise funds for growth companies in the first half of the year as retail investors took advantage of favourable tax policies to snap up the index’s tech and healthcare stocks.
A Sickbed Call From Historian David McCullough; Our national narrator saw America’s best values.
Danny Heitman – WSJ Opinion
When I caught chickenpox from my infant daughter in 1997, I knew I was in trouble. The virus can be serious when it strikes adults, and I was brought low with blisters, high fever and body aches so sharp that I felt like I’d been pierced by a quiver of arrows. The only bright spot was a call from David McCullough, the Pulitzer Prize-winning historian who died on Sunday at 89. When I answered the phone and heard McCullough on the other end, I assumed I was delirious. There was no reason for a celebrated author to call me up, and it would have been easy for my overheated brain to summon McCullough’s avuncular voice. Thanks to his TV projects, McCullough’s velvet baritone was a cultural fixture, striking just the right note of earnestness and gravitas. His work on Ken Burns’s “Civil War” series and PBS’s “American Experience” had essentially made him our national narrator. He sounded like history itself, deep and resplendent but unmistakably human. “I heard you had the chickenpox,” he told me, “and I’m terribly sorry to bother you, but I thought I’d better check on the patient.”
Axios, which was co-founded by Jim VandeHei, generates roughly $100 million in revenue, according to people familiar with the matter.
Alyssa Lukpat, Lillian Rizzo Jessica Toonkel – WSJ
Axios, a digital news site known for bulletin-style articles, agreed to be acquired by Cox Enterprises Inc., the companies said, uniting new and old media companies amid a flurry of mergers in the publishing world. The cash deal values Axios at $525 million, according to people familiar with the matter.
News Corp profits almost double as subscriptions drive recovery from pandemic losses; Growth at Rupert Murdoch’s media company underpinned by revenue rises at news operations
Nic Fildes – FT
News Corp, the publishing company controlled by Rupert Murdoch, said profits almost doubled in the year to June as growth in digital advertising and subscriptions helped its news operations recover from losses incurred during the pandemic.