Cryptocoinflation after CoinDesk collapse: A case for regulatory reforms in the crypto industry? A Chinese business leader says crypto is “no go”

Prices of digital currencies fell again as the crisis engulfing the market deepened over the weekend. The world’s biggest coin has plummeted so far this year. On Monday, it was trading at around $16,500. Analysts believe that it could fall below $10,000.

Ether, the world’s second most valuable cryptocurrency, isn’t faring much better. It was trading at about $1,230 on Monday, having sunk over 20% over the last week, CoinDesk data showed.

Some industry insiders have said the company’s downfall had triggered a “Lehman moment,” referring to the 2008 collapse of the investment bank that sent shockwaves around the world.

The episode has not just destroyed confidence in the crypto industry, but will also embolden global regulators to tighten the screws. If it helps restore faith in the industry, some of the biggest names in the business will welcome the scrutiny.

The head of one of the world’s biggest crypto exchanges said there is a lot of risk. He said things in the industry have gone crazy, so we need some regulations.

CZ, as he’s known, was speaking at a conference in Indonesia on Monday. He said last week that comparing the current crypto turmoil to the 2008 global financial crisis is “probably an accurate analogy.”

Source: https://www.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html

FTX, CoinDesk and Gate.io in the Light of Sam Bankman-Fried’s Exit from the Bahamas, and a Case of Coin Mismanagement

FTX has continued its downward spiral after filing for bankruptcy on Friday. Another big name in the industry has admitted to mismanaging funds.

FTX moved its headquarters from Hong Kong to The Bahamas last year, with former CEO Sam Bankman-Fried hailing it as “one of the few places to set up a comprehensive framework for crypto” at the time.

“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred,” the Royal Bahamas Police Force said in a statement.

Officials say that Bankman-Fried lied for a long time about the financial health of FTX, a coin exchange that collapsed in November in one of the most spectacular financial implosions in years. Bankman-Fried is currently in the Bahamas, where FTX operated from, and is awaiting an extradition hearing.

FTX said it was looking into the possibility that the assets were stolen. A firm called Elliptic said $473 million of digital assets appeared to have been grabbed from FTX.

As scrutiny of big players increases, Singapore-based Crypto.com admits to accidentally sending $400 million in ether to the wrong account.

Kris Marszalek said on Sunday that the transfer of 320,000 ETH had been made three weeks ago to a corporate account at Gate.io instead of a cold wallet.

“We have since strengthened our process and systems to better manage these internal transfers,” Marszalek tweeted Sunday. The platform’s native token has fallen over 20% in the last 24 hours, according to CoinDesk.

Sam Bankman-Fried, the founder of FTX, is a risk engine: How the US Created the Greatest Money Laundering Scheme in History

Marszalek’s firm has acted as a regulated player since inception and will soon be vindicated by all the detractors.

He said it is normal for a bank to move user assets to make money. If a crypto exchange operates that way it is “almost guaranteed to go down,” he said. The industry has a responsibility to play in protecting consumers.

Editor’s Note: Casey Michel is a writer and investigative journalist covering kleptocracy and dark money networks across the globe. He is the author of “American Kleptocracy: How the US Created the World’s Greatest Money Laundering Scheme in History,” and is at work on a book investigating foreign lobbying in Washington, DC. The opinions expressed in this article are of his own. Read more opinion at CNN.

Sam Bankman-Fried, the founder of FTX, was indicted on charges of fraud and conspiracy last year and the death spiral of the exchange has rattled the world of digital currency.

The details of Bankman-Fried’s alleged scam will likely take a long time to untangle. But the broader story is relatively straightforward, and familiar: He allegedly spent years defrauding unsuspecting investors of gargantuan sums of money, and then allegedly used that money to not only bankroll his lavish lifestyle, but to set up tens of millions of dollars in illegal campaign contributions.

These types of cases are similar to traditional Ponzi schemes, which are an old form of American capitalism. They usually combine a lack of regulation and oversight with claims of easy wealth schemes, all made up of proprietary technology that may yield returns out of thin air.

Time and again, America’s financial industry has seen the emergence of new, untested financial tools — railroad bonds, stock purchases, mortgage derivatives — emerge without any kind of proper regulation and oversight. Time and again, money has raced in, looking to take advantage of the new industries and financial tools. And time and again, others have taken advantage of the new investors — and looted as much of the wealth as they could.

He presented himself as cautious and conservative in the industry and claimed that FTX kept a certain risk engine that would keep its finances healthy. One SEC official said that the veneer was fraudulent.

The Inflationary Story of Twitter: Management of the Musk Powered Twitter Adversarial Platform, or What Happens If Twitter Goes Bought?

Inflation was the top market story last year — prices around the globe soared, driving central banks to collectively hike interest rates more than 300 times.

The value of the debt backed by the Musk deal to buy the social network is estimated by Morgan Stanley and other investment banks. The banks made the promise before technology sector shares crashed, the billionaire tried to walk away from the acquisition, and the market for leveraged loans seized up. Unable to sell that debt without incurring huge losses, the banks head into the new year saddled with loans that will constrain their ability to finance more deals.

Mr. Musk’s management of Twitter has been erratic: He’s fired workers, refused to pay invoices, changed content moderation policies, allowed banned users back on to the platform, temporarily suspended some journalists’ accounts, been accused of neglecting his other companies and said he would resign as C.E.O. (eventually). But his style has won admiration among many tech executives, founders and investors.

The number of vacant properties in China as of late summer. The world’s second-largest economy has been hammered this year and a sharp slowdown in the crucial property sector has been one big reason. Real estate development accounted for about a quarter of China’s G.D.P. over the past decade, but a squeeze on the industry caused seemingly impregnable companies to teeter and prompted rare social unrest among unhappy property owners. The lingering challenges facing the debt-fueled housing industry point to structural questions that still hang over the economy.

Premarket Stocks Trading: An Energy Crisis in the Euro-Pteoral Era Following The Fed, the Ukraine and the U.S.

A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up here. If you click on the same link, you will be able to hear an audio version of the newsletter.

The S&P 500 hit a record on the first day of the new century. The Federal Reserve highlighted increasing concern over rising inflation, and noted that they were weighing rate hikes. Since then trillions of dollars have been wiped from the world’s stock and bond markets, as a result of everything from Fed policy to the Covid shutdowns.

The rate at which banks charge each other for overnight borrowing rose to the highest level in eight years by the end of the year.

It has taken China three years to shut down for large parts of the country because of its zero-covid policy.

Russia invaded Ukraine in the middle of February and then began a war that would cause global food and fuel prices to soar. Now, an energy crisis is gripping Europe.

European Commission President Ursula von der Leyen and International Energy Agency chief Fatih Birol warned that Europe could face a natural gas shortage in three years. It’s close to 4% of the region’s annual consumption.

Russia could stop gas flow to the EU completely because of the 60 billion of gas that they sent in the course of four years. It could also slash oil production in response to a Western price cap.

Source: https://www.cnn.com/2023/01/03/investing/premarket-stocks-trading/index.html

Tesla, SpaceX and Twitter haven’t sold a lot of stock in the last few years: How Musk made the leap to Silicon

It was a very bad year for crypto. Bitcoin’s value fell by more than 64% in 2022 as the Fed raised interest rates and investors settled into their risk-off, bear market strategies.

But don’t cry for Musk just yet. The CEO of Tesla, SpaceX and Twitter is now worth $137 billion, according to the Bloomberg Billionaires Index. That places him second on the list of the world’s richest behind LVMH Chairman Bernard Arnault. At its peak, Musk had a net worth of $340 billion.

Competition for electric vehicles from established automakers increased last year, which weakened the demand for Teslas. The company missed its growth targets and scaled back production in China. Its fourth-quarter deliveries, announced Monday, missed Wall Street’s estimates.

Musk’s $44 billion purchase of Twitter hasn’t helped Tesla’s stock or Musk’s personal wealth, either. Musk, Tesla’s largest shareholder, has sold $23 billion worth of Tesla shares since his interest in Twitter became public in April.

Source: https://www.cnn.com/2023/01/03/investing/premarket-stocks-trading/index.html

The U.S. Economy is Not All That’s Doom and Gloom: Facts and Statistics in November, and Consumer Prices Declined by More Than a Year

It’s not everything that’s doom and gloom. We’re not in a recession yet, after all. My cautiously optimistic colleague Matt Egan recently laid out why we may achieve a soft-landing in 2023.

The hiring is surprisingly resilient. The economy added a robust 263,000 jobs in November, and the unemployment rate is just 3.7% — down dramatically from nearly 15% in the spring of 2020.

The cost of living is still way too high, but the rate of inflation appears to have peaked. Consumer prices went up by 7.1% in November, the fifth-straightmonth of improvement and a significant cooling from the 9% recorded in June. It’s also the lowest annual inflation rate in nearly a year.

After spiking above $5 a gallon for the first time ever in June, gas prices have plunged. The national average for regular gasoline recently dropped to $3.10 a gallon, an 18-month low, though it has crept higher in recent days to about $3.22 a gallon.