Why a recession is 'not the situation we have today,' according to a strategist

Yaseen Shah

Thu, July 14, 2022 

With recession fears rattling markets, BNP Paribas Chief Market Strategist Daniel Morris still thinks it is too early for investors to reposition their portfolios.

“When we think of a recession, it’s really a collapse in demand and that’s absolutely not the situation we have today,” Morris told Yahoo Finance Live. “Consumer demand is still strong, business investments still pretty good, and unemployment very low,”

Even with inflation soaring 9.1% year-over-year (YoY) in June 2022, American consumers are spending. A Bank of America (BofA) Institute report released Thursday finds that credit and debit card spending was up 11% YoY in last month. BofA internal data also confirms that consumers are spending and saving more than in pre-pandemic levels.

The labor market is also exhibiting strength amid tightened financial conditions. The U.S. Bureau of Labor Statistics recorded the addition of 372,000 jobs in June 2022, which was 104,000 jobs higher than estimates. The unemployment rate also stayed at 3.6% for the fourth month in a row.

The National Bureau of Economic Research (NBER) defines a recession as a “significant decline in activity that is spread across the economy and that lasts more than a few months.” That does not mean that an economy is in a recession after two consecutive quarters of negative gross domestic product (GDP) growth, according to Morris.

“If you look at the recession that occurred after the dot-com bust in 2000, you did not have two quarters of negative GDP growth, but it was still classified as a recession,” Morris explained.

Morris points out 2 indicators from the dot-com recession investors should look out for in the future: the labor market and the Fed.

“What happened in the labor market and whether or not the Fed responds to the slowdown … kind of really that combination signals this was a recession,” Morris said.

The Fed is prepared to be more hawkish if it needs to. Meeting minutes from last month’s meeting suggest the Fed will take a more “restrictive stance” if inflation does not fall, and Chairman Jerome Powell announced a 50 or 75 basis point hike for July 2022 at last month’s press conference.

However, after June's CPI report release, investors are looking to the possibility of the Fed raising interest rates by 1%. CME Group’s FedWatch data, as of Wednesday, forecasts a 44% probability of a 100 basis point hike at July’s FOMC meeting.

All things considered, Morris and his team think the risk of a recession is not in the near term.

“We don’t really see [a recession] happening until next year, and that means the markets aren’t going to be pricing in that potential outcome for a while yet,” Morris said.

Energy use from US cryptomining firms is contributing to rising utility bills

Dani Anguiano in Los Angeles

Sat, July 16, 2022 

Photograph: Stephen Shaver/REX/Shutterstock

The largest US cryptomining companies have the capacity to use as much electricity as nearly every home in Houston, Texas; energy use that is contributing to rising utility bills, according to an investigation by Democratic lawmakers.

Cryptomining is a highly energy intensive process involving the use of specialized computers running constantly to solve complex math problems in order to create new virtual coins.

Related: Trillion-dollar crypto collapse sparks flurry of US lawsuits – who’s to blame?

Energy use in the industry is greater than that of entire countries. The US has become the center of cryptomining after it was banned in China. More than a third of the global computing power dedicated to mining bitcoin, the largest cryptocurrency, comes from the US, Senator Elizabeth Warren and five other Democrats reported in a letter to the Environmental Protection Agency.

“The results of our investigation … are disturbing … revealing that cryptominers are large energy users that account for a significant – and rapidly growing – amount of carbon emissions,” the letter states. “It is imperative that your agencies work together to address the lack of information about cryptomining’s energy use and environmental impacts.”

The congressional Democrats have asked the EPA and the Department of Energy to require cryptominers to disclose emissions and energy use, noting that regulators know little about the full environmental impact of the industry.

The lawmakers solicited information from seven of the largest US cryptomining companies, including Stronghold, Greenidge, Bit Digital, Bitfury, Riot, BitDeer and Marathon, about their energy sources and consumption and the climate impacts of their operations. The data revealed that the industry is using a substantial amount of electricity, ramping up production and creating significant carbon emissions at a time when the US needs to drastically reduce emissions to combat the climate crisis.

Riot Blockchain's bitcoin mining facility in Rockdale, Texas. An investigation revealed the industry is creating significant carbon emissions. Photograph: Tannen Maury/EPA

Emissions data from three companies, Bit Digital, Greenidge and Stronghold, indicated their operations create 1.6m tons of CO2 annually, an amount produced by nearly 360,000 cars. Their environmental impact is significant despite industry claims about clean energy use and climate commitments, the lawmakers wrote.

“Bitcoin miners are using huge quantities of electricity that could be used for other priority end uses that contribute to our electrification and climate goals, such as replacing home furnaces with heat pumps,” the letter states.

“The current energy use of cryptomining is resulting in large amounts of carbon emissions and other adverse air quality impacts, as well as impacts to the electric grid.”

The power demands of the industry are also coming at a cost to consumers, the letter states, citing a study that found cryptomining operations in upstate New York led to a rise in electric bills by roughly $165m for small businesses and $79m for individuals.

In Texas, which has become a cryptomining hub, the industry is expected to continue to expand significantly in the coming years, increasing the amount of electrical load to nearly a third of the grid’s current maximum capacity over the next four years and straining the system, according to a report from the Verge.

“The more crypto mining that comes into the state, the higher the residents should expect the electricity prices to become,” ​​Eric Hittinger, a professor at Rochester Institute of Technology, told the outlet.

The cryptocurrency market has crashed in recent months, dropping in value from more than $3tn in November 2021 to less than $1tn.

Cryptominers defend gigawatt-scale energy usage called out by Congress



Harri Weber
Fri, July 15, 2022 

Citing "disturbing" levels of power used by cryptocurrency miners, a group of Democrats led by Sen. Elizabeth Warren is urging the Environmental Protection Agency and the Department of Energy to crack down on the controversial industry.

The letter, signed by four senators and two representatives, calls on regulators to compel cryptominers to disclose their carbon emissions and energy use. Environmentalists have long raised concerns about Bitcoin and other power-hungry, proof-of-stake tokens — and globally, cryptocurrencies are estimated to consume more energy than entire countries, such as Venezuela and Finland.

In the U.S., just seven firms have built more than 1.045 gigawatts of capacity for cryptomining purposes, the report states. "This is enough capacity to power all the residences in Houston, Texas." The mining farms highlighted in the report are run by Stronghold, Greenidge, Bit Digital, Bitfury, Bitdeer, Marathon and Riot.

Though the crypto winter of 2022 might incentivize some miners to scale back operations, the lawmakers argue the industry at large is poised to grow rapidly and "is likely to be problematic for energy and emissions." Still, they caution that "little is known about the full scope of cryptomining activity." Hence their call for more data.

In response to the lawmakers, the companies downplayed the industry as a source of planet-cooking emissions. Nevertheless, they highlighted their individual efforts to curtail emissions and tap into renewable sources.

Marathon pointed to its work "with energy companies to build clean, green, renewable energy resources (e.g., solar and wind) that might not otherwise be built." However, most of the energy tapped by Marathon currently comes from a coal-burning plant in Hardin, Montana.

Along similar lines, Riot argued that "Bitcoin mining drives more demand for renewable energy than the typical U.S. energy consumer" and spotlighted its use of hydroelectricity in upstate New York. Riot's operations in Rockdale, Texas, however, feature nearly seven times the capacity and draw power from the state grid. Texas generated most of its energy from nonrenewable sources last year (51% from natural gas and 13.4% from coal).

Speaking of coal, Stronghold told lawmakers that it is "actively working to remediate coal refuse piles and converting coal refuse into energy." Coal mining waste is an environmental nightmare, and cleaning it up is a good idea. Burning coal waste, on the other hand, still yields harmful emissions, though scrubbers can lessen the worst effects.

Blockfusion and Bitdeer, meanwhile, pointed to their use of software to minimize strain on energy grids.

Though the letter casts a critical eye on crypto, the majority of near-term emissions cuts in the U.S. need to come from the power and transportation sectors in order for the U.S. to reach its 2030 net emissions goal, according to researchers at the Electric Power Research Institute. In April last year, the White House said it aimed to halve U.S. greenhouse gas emissions by 2030.

D.C. remains virtually deadlocked on climate legislation, yet Democratic lawmakers (those not named, Sen. Joe Manchin) have sought to curtail emissions via tax credits, which could juice both renewable energy generation and electric car sales. In a June interview with TechCrunch, Energy Secretary Jennifer Granholm said passing clean-energy tax credits this summer was "the most certain path" for the U.S. to follow.

As Coinbase falters, Binance.US is waiting in the wings



Anita Ramaswamy
Thu, July 14, 2022 

As the largest publicly traded crypto exchange in the United States, Coinbase has become something of a household name. But as the going gets tough in the crypto markets, the company seems to be fumbling the bag, leaving it vulnerable to competition.

Coinbase's stock price is down nearly 80% from where it started the year and it recently made headlines for laying off one-fifth of its staff. The company posted a $430 million loss in the first quarter of 2022, underperforming Wall Street analysts’ expectations. Its trading volumes and number of monthly transacting users were both down from Q4 last year — bad news for a company that depends heavily on transaction fees for its revenue.

The exchange got over its skis quicker than even Coinbase itself probably imagined, a point evidenced by its decision to rescind job offers last month from candidates who had already accepted them. Its competitors, though, have been lying in wait for their moment to close in on the U.S. market. Now, sensing Coinbase's moment of weakness, the two largest crypto exchanges in the world by volume (Coinbase is third globally) -- Binance and FTX -- are hoping to seize their opportunity stateside.

The three crypto giants all have different established customer bases and are trying to steal each other’s market share. Retail investors comprise around 95% of Coinbase’s transaction revenue, although institutions account for most of its trading volume, according to its latest quarterly filing.

FTX is best-known for catering to more sophisticated traders through its derivatives offering, which makes up the majority of its volume -- a natural fit for the exchange given its founder and chief executive Sam Bankman-Fried’s background working at a quant hedge fund. Coinbase entered the derivatives business for the first time last month, while FTX launched an institutional trading platform in March this year.

SBF, as he’s known in the crypto world, has been pulling out all the stops to broaden its appeal to the average retail investor, including introducing zero-fee U.S. stock trading in May, to try to turn FTX into a one-stop shop for its customers' needs. After all, if Coinbase ascended to its current level of success in large part because of U.S. retail investors, its decline presents a valuable opportunity for global exchanges to poach its users and boost their own revenues.

It makes sense, then, that Binance has its sights set on luring more retail investors, but the largest global exchange is still a bit of a dark horse in the race for the U.S. market as it battles against FTX for customers. Its Binance.US division saw spot trading volumes below $300 million as of July 12. That’s a drop in the bucket compared to its global business, which saw volumes of $10 billion for the same period — about seven times higher than volumes at both FTX and Coinbase.

Today, 70% of trading volume on Binance.US, the American offshoot of the global exchange, comes from institutional customers, its CEO Brian Shroder told TechCrunch in an interview. Still, retail investors bring in more revenue overall, in part because of the steep discounts Binance.US offers to its highest-volume customers, he added.

Binance is also taking a markedly different approach from FTX in luring U.S. retail investors, focusing on its core competency in crypto.

"Some exchanges want to go back to stock trading and target that market. That's, again, not a wrong or right approach. We are a pure web3 company. We're not going back; we're moving forward. We want to build more web3 tools," Binance founder Changpeng Zhao told Decrypt in an interview this week.

The exchange is also taking a less flashy tack when marketing in the U.S. While other competitors including Coinbase, FTX and Crypto.com were spending millions of dollars on Super Bowl ads during the crypto bull run, Binance.US stayed relatively quiet.

Under Shroder's tenure, Binance.US seems to be reversing its reputation, once marred by rapid management turnover and ongoing regulatory battles, and pulling ahead in the fight to win over the U.S. retail investor. From a customer perspective, its strategy is undeniably appealing — undercut competitors by offering lower fees.

Coinbase’s fees are notoriously high at up to 3.99% for certain spot trades compared to FTX.US, which charges up to 0.20%. Binance.US, meanwhile, reaffirmed its commitment to keeping costs low for its customers last month when it launched fee-free bitcoin spot trading for all users, saying it is the first U.S. crypto exchange to have done so, though it's worth noting that exchanges still make money from the spread on trades even if they don't charge an upfront fee. It also rolled out a staking product last month that it claims provides some of the highest APY rates compared to its competitors and said it plans to add fee-free trading for more currencies in the future.

“On the cost side, it is unquestionable that we are the lowest-cost provider in this space,” Shroder said.

When asked about how Binance.US is able to provide above-market yields from its staking product, Shroder’s response was: “My guess is that when you look at the other firms having much lower APYs, it's just that they are taking that themselves, and we are passing it on to the customer."

Naturally, investors gravitate toward lower fees and higher returns, giving the deep-pocketed Binance a potential advantage over Coinbase in that it can afford to sacrifice profits in the U.S. to attract users as long as it makes them elsewhere. The same goes for FTX, which is able to offer no-fee equity trading only because it’s making money in other parts of its business.

Customers have shown enthusiasm for Binance.US, although investors, at times, have seemed more hesitant. Still, this April, the company was able to raise its first external funding from investors in a $200 million round valuing it at $4.5 billion. The fundraise marked a crucial first step on its path to an IPO -- a milestone Shroder told TechCrunch he sees happening in the next two to three years.

Armed with the new cash and an extension to the round that Shroder says is coming soon, the company seems well positioned to weather a choppy market. It is actively hiring for 80+ new roles to add to its current employee base of ~400, TechCrunch reported last month.

Binance.US CEO tells employees the company is ‘growing faster than ever’

"What I experienced at Uber, I'm living through again"

Despite Binance’s recent efforts in the U.S. market, its messy history with local regulators makes it easy to underestimate. The company is currently under investigation by the U.S. Commodities and Futures Trading Commission for allegations that it engaged in market manipulation. The U.S. Justice Department and IRS are also reportedly examining whether the exchange engaged in money laundering and tax evasion.

For context, Binance.US launched in 2019 as a standalone entity that licenses its branding and core technology from Binance itself. Zhao is said to have spun off the division in a bid to appeal to U.S. regulators who refused to greenlight the global exchange.

Zhao still wields significant influence over the U.S. exchange today as a major shareholder, although he told Decrypt this week that Binance "is no longer top-down driven" by him. The New York Times reported last August that Zhao held 90% of Binance.US shares.

Zhao’s ownership stake, according to the Times, became a sticking point with outside investors when former Binance.US CEO Brian Brooks tried to raise a venture round for the company as a step to an eventual IPO. Brooks ended up leaving the company just three months after taking over the top job, perhaps in part because the deal fell through.

Brooks isn’t the only top exec at Binance.US who has left unexpectedly. The company’s founding CEO, Catherine Coley, left the company so quietly last May that numerous unconfirmed rumors began swirling regarding her whereabouts. Last October, when Shroder took over the company as its next permanent CEO after Coley, Binance.US’s founding CFO Joshua Sroge made his exit. Last week, after nine months of searching, the company finally filled Sroge’s role, appointing former Acorns exec Jasmine Lee as its new permanent CFO.

In addition to its troubles in the U.S., Binance has also faced heavy regulatory scrutiny in Japan, the EU, Germany, Thailand and other regions. Shroder, who previously led Uber's Asia-Pacific strategy, likened the exchange to the controversial ride-share startup.

"What I experienced at Uber, I'm living through again," Shroder said. "When I was at Uber, we were bad boy No. 1, you know? We were the big bad guys picking on the taxi industry and hurting the taxi employees and things like that.”

“What was true about Uber is also true about Binance, globally, and then Binance in the U.S., which is that basically there was an entrepreneur who had an innovative approach to expanding technology that has never been contemplated by regulators,” he continued. “To support that, the regulators had to play catch-up to the technology, and I think that's exactly what we're experiencing now in the crypto space."

Shroder is determined to shepherd Binance.US to its longstanding goal of going public, a milestone he believes it will achieve in the next two to three years. He said Binance.US is strong enough to continue growing even amid tough market conditions, citing the firm’s plans to hire some employees who were let go by Coinbase and competing crypto exchange Gemini as evidence that his company is better positioned for the challenges ahead.

“Coinbase and Gemini have multiple products and services, and they have them out there; they've been out there for a while. We historically have only had spot [trading] up until really this [quarter]. So as we add more products and services, which we have a very aggressive roadmap to do, we require more products and tech talent; we require more operations people to actually run those new business units. With the infusion of capital that we just got from our very first seed round, we're taking all the funding, and we're plowing it back into growth,” Shroder said.

Only time will tell if Shroder’s ambitious plan will work, but he is determined to reshape the narrative surrounding Binance.US in the public eye. One of the biggest misperceptions the public has about Binance.US, he said, is around its "desire to be a fully compliant and regulated entity," a goal Shroder said has been central to the company since its founding.

"In the vacuum of you telling your own story, your story is being told by your competitors, or your story is being told based on your click rate. And to the extent that negative headlines drive views more than positive ones, I think that that just creates a misperception in the market that is not based on reality," Shroder said.

Note: This article has been updated post-publication to clarify details of FTX and Coinbase's trading volumes by customer type.

Crypto lender Celsius Network reveals $1.19 billion hole in bankruptcy filing

Hannah Lang
Thu, July 14, 2022

(Reuters) -Celsius Network listed a $1.19 billion deficit on its balance sheet in a bankruptcy court filing on Thursday, a day after the cryptocurrency lender filed for Chapter 11.

New Jersey-based Celsius froze withdrawals last month, citing "extreme" market conditions, cutting off access to savings for individual investors and sending tremors through the crypto market.

In the filing at the U.S. Bankruptcy Court for Southern District of New York on Thursday, Celsius also said it had $40 million in claims against Singapore-based Three Arrows Capital, a crypto hedge fund that filed for bankruptcy earlier this month.

As of July 13, Crypto had about 23,000 outstanding loans to retail borrowers totaling $411 million backed by collateral with a market value of $765.5 million in digital assets, it added.

Crypto lenders boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. They lent out tokens to mostly institutional investors, making a profit from the difference.

But the lenders' business model came under scrutiny after a sharp crypto market sell-off spurred by the collapse of major tokens terraUSD and luna in May.

Another U.S. crypto lender, Voyager Digital Ltd, filed for bankruptcy this month after suspending withdrawals and deposits. Singapore's Vauld, a smaller lender, also froze withdrawals this month.

(Reporting by Hannah Lang in Washington; Editing by Chris Reese and Richard Chang)

Celsius becomes third major crypto firm in two weeks to file for bankruptcy

David Hollerith
·Senior Reporter
Thu, July 14, 2022

Crypto lender Celsius Network has initiated bankruptcy proceedings, the company said Wednesday night, marking the third high-profile crypto firm to do so in the last two weeks.

The New Jersey-based firm filed bankruptcy under Chapter 11 with the Southern District of New York, stating it has $167 million in assets on hand to fund operations during restructuring.

“I am confident that when we look back at the history of Celsius, we will see this as a defining moment,” Alex Mashinsky, Celsius' co-founder and CEO, said in a release.

After the collapse of Terra’s algorithmic stablecoin UST, crypto lending and brokerage firms have faced solvency issues with common failings coming from directly investing in Terra coins (LUNA, UST), lending money to firms who did - such as now bankrupt hedge fund Three Arrows Capital - or simply losing out from other risky positions involving leverage.

The firm joins Three Arrows Capital as well as another lender, Voyager Digital, in the list of major crypto firms filing for bankruptcy protection.

Celsius, whose mantra has been “Unbank Yourself,” offered both retail and institutional customers high-yield interest savings accounts. The firm earned yield for customers by lending its assets out to hedge funds or depositing them in higher risk decentralized finance trades that relied on additional leverage.

Celsius logo and representation of cryptocurrencies are seen in this illustration taken, July 7, 2022. REUTERS/Dado Ruvic/Illustrations

On June 12, Celsius showed the first signs stress, freezing customer accounts on its platform, which in some cases caused customers to lose their funds by preventing them from paying down crypto loans on the platform as market conditions collapsed.

Between freezing customers' accounts and filing for bankruptcy, the firm has remained largely silent.

Celsius hired restructuring lawyers, laid off 150 employees, and unwound a number of decentralized finance positions over the last month, paying down at least $900 million in debt according to Yahoo Finance’s tally.

On a consolidated basis, the firm stated in the petition it holds between $1 and $10 billion assets and matching liabilities on its balance sheet, and has more than 100,000 customers who, in a bankruptcy scenario, are now deemed unsecured creditors.

Celsius' largest unsecured creditor according to the petition is one Pharos USD FUND, which it owes $81 million. Notably, it also owes $12.7 million to trading firm Alameda Research.

Based on a recent report by blockchain analytics firm Arkham Intelligence, Celsius entrusted $530 million in corporate funds to crypto asset manager KeyFi so it could engage in higher risk decentralized finance trading strategies.

KeyFi founder Jason Stone, who recently filed a lawsuit against Celsius, said the transaction yielded $350 million in losses for the company. In the complaint, legal representatives for Stone accused Celsius of being a “fraud” and “Ponzi scheme.”

The celsius token (CEL) has fallen more than 32% following its bankruptcy announcement to trade at 46 cents per coin. At the start of May, it changed hands above $2 per coin.

‘I just wake up and cry’: Voyager and Celsius bankruptcies have destroyed some crypto investors’ confidence in centralized platforms

Frances Yue - 

© Courtesy of Yotsy Ruiz

THE HUMAN COST

Yotsy Ruiz recently bought his first ever crypto hardware wallet — a Nano X from Ledger. He is transferring all his crypto holdings that he can still move to the small physical device which looks like a USB flash drive, and away from large centralized exchanges such as Binance and Coinbase

How are VCs response to the collapse of several crypto compani

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The 40-year old resident of Frederick, Md., who owns a home remodeling business, hastily made the move after crypto broker Voyager Digital, which he trusted with some of his savings, froze all user withdrawals at the start of July and filed for bankruptcy protection.

In November, Ruiz invested about $33,000 of crypto on the Voyager platform. His holdings, including more than 11,110 Cardano and 360,000 Terra Luna Classic among others, are today worth about $5,000 as crypto prices have plunged. Now, it’s unclear if Ruiz will ever even get his coins back.

“Sometimes you want to buy coins like Shiba Inu you want to buy Dogecoin people tell you, ‘no, no, don’t buy that, those are bad products and you can lose the money.’ But then you trusted these exchanges. You lost not only one coin, but all the money there,” Ruiz said in an interview with MarketWatch.

Voyager said it had signed up more than 3.5 million users as of March 31, by offering high interest rates that reached up to 12% on their crypto deposits and connecting customers to crypto exchanges and market makers for trading. It also partnered with Mastercard on a debit card backed by stablecoin USDC that granted rewards of up to 9% annually. But the crypto broker sank into the swamp after it said Three Arrows Capital, a Singapore-based digital asset hedge fund that was recently ordered to liquidate by a court in the British Virgin Islands, defaulted on over $650 million of loans to the company.

With the crash of cryptocurrencies, several companies, like Voyager and Celsius Network, that emerged during the go-go years to offer digital currency investors lightly regulated financial and banking services have collapsed. As bitcoin has traded 70% lower from its all-time high, and smaller coins have tumbled even more, crypto lender Celsius, which said it had more than 1.7 million customers, stopped all customer withdrawals in June and filed for bankruptcy protection on Wednesday. Now, Celsius customers are faced with being unsecured creditors in federal bankruptcy court in New York. Digital asset exchange CoinFlex has also paused customer withdrawals. These failures have shaken investor confidence in many firms that underpin a nascent industry that has attracted huge capital inflows.

Hear from: Mike Novogratz at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The Galaxy Digital CEO has ideas about navigating the crypto winter.

Ruiz, who also invested in Terra’s Luna Classic, previously known as Luna, felt more devastated with Voyager’s bankruptcy recently than in May, when he saw Luna plunge to close to zero from more than $80 in a week. Terra’s collapse was a huge blow, but “not everything was lost, and I knew I had to assume the risk,” Ruiz said. “I got other solid projects for the long term.” Ruiz, who says his portfolio is split between stocks and crypto, believes prices of some digital currencies will eventually go up.

It is one thing to face losses from one token, but another to see a centralized platform restrict access to all his crypto that is on it, Ruiz said. In the Voyager case, “I didn’t even know how to tell my wife,” Ruiz said. “She still doesn’t know.”

Ruiz has now lost faith in many cryptocurrency institutions. “I’m not planning to use exchanges anymore,” Ruiz said. “If I do, I’ll just buy say $1,000 or so bitcoin and then right away try to transfer back into another wallet that I want to keep my money there.”

In Orlando, Fla., another 40-year-old Voyager customer has reached a similar conclusion. The investor, who works in information security, told MarketWatch he hopes to transfer all his crypto to an offline storage vehicle, or cold wallet, if he ever manages to retrieve his funds locked on the Voyager platform. The investor asked to remain anonymous because he is concerned about repercussions, saying that Voyager “is a company that I no longer trust. I don’t know what they’d do.”

The investor has more than $114,000 worth of bitcoin ether and stablecoin USDC deposited at Voyager, roughly 80% of his family’s life savings. On July 1, when he received an email from Voyager that the company had halted user withdrawals, “my heart sank.”

“ I felt like a pain went through my body. I didn’t know what to say. I mean, thinking about it, it was the worst thing that ever happened,” the investor said. “Quite candidly, at times at night, I just wake up and cry. Because it’s such a disbelief to me. Like it’s one thing that you buy an asset and the asset goes down. It might pick up one day, and we still have access to it, right?”

In fact, back in March 2021, choosing to invest with Voyager was a “very careful” decision, according to the investor, after he compared several different platforms and did research about their management teams. Voyager was a publicly traded company listed on the Toronto Stock Exchange and the investor was able to find a lot of its financial information by reading its securities filings. “They were way solvent,” he thought. “Ratios were good. They had a good operating business. I also looked at their business model and the growth of the customer base,” the investor said. Meanwhile, the platform was “very intuitive, very easy” to use. It also marketed that all the U.S. dollar deposits were insured by the Federal Deposit Insurance Corporation, the U.S. government agency that backs depositors in American banks, which was a major appeal. Voyager had a partnership with Metropolitan Commercial Bank, a New York community bank.




Voyager recently assured investors that their U.S. dollar deposits will be returned in full, upon completion of a “reconciliation and fraud prevention process.” However, users who have crypto assets on the platform will instead receive a combination of some of their crypto, proceeds from any Three Arrows recovery, common shares in the newly reorganized company and Voyager’s own tokens VGX, according to the company’s restructuring plan, which is subject to change and requires court approval.

Still, “who would want those utility token for the company that has lost all trust?” asked the investor. “If they ever come back up…who’s gonna come and do business with these people?” The company’s shares was equally unappealing for him. “I just want my principal back. I’m willing to forgo every interest that they give me.”

Representatives at Voyager did not respond to requests seeking comment.

At many, if not most crypto exchanges, customer funds are pooled together and not segregated, according to Daniel Saval, a partner at law firm Kobre & Kim. In the case of a bankruptcy filing, the issue becomes important to determine whether customers will be treated as unsecured creditors. If a customer is “unable to show that they have control over their accounts that they’re able to actually identify or trace their specific crypto assets, then most likely those assets are going to be considered property of the bankruptcy estate,” according to Saval. It means that the customers will share with all other creditors the pool of assets, instead of claiming what was in their accounts, Saval said.

In May, Coinbase COIN, the largest U.S.-based crypto exchange, added language to its securities filings that said in a bankruptcy situation “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.” The bankruptcy filing of Celsius Network on Wednesday in federal court in New York means that its customers are faced with becoming unsecured creditors in that case, with limited claims only to the general bankruptcy estate and not their specific accounts.

Maxwell McIntyre, a 39-year-old who works for the U.S. Department of Defense in Japan, has about $14,000 with Voyager. Most of the funds are in U.S. dollars, thanks to his decision to convert most of his USDC on the platform to dollars on June 20, a few weeks after Celsius stopped withdrawals.

McIntyre believes he will get the U.S. dollar deposits back, but as far as crypto, “I’m pretty much just expecting that to be lost at this point,” McIntyre said.

Overall, he feels that “we’ve been lied to quite a bit about all this.”

“Just a few weeks ago, we were being told that all our capital is great. They have plenty of capital and they don’t lend to any risky decentralized finance lenders,” McIntyre said. He also felt bad that he once recommended Voyager to his mother, his wife, and his children. He even helped his wife to set up an account, which is slated to be given to their kids — it has about $4,360 in it.

Nevertheless, McIntyre said his view on cryptocurrencies “hasn’t changed one bit.” He believes that crypto could be a “very powerful financial tool” with the potential to solve some world problems.

But he no longer has the same trust for centralized platforms. “I am definitely not going to keep it on an exchange just to earn the extra little bit of interest when that’s very possible I could lose it,” McIntyre said.

Things Are Going to Break’: Texas Power Plants Are Running Nonstop





Will Wade, Mark Chediak and Naureen Malik
Fri, July 15, 2022

(Bloomberg) -- As searing Texas heat drives power demand to record highs, the state’s grid operator is ordering plants to run at a historic pace, often forcing them to put off maintenance to keep cranking out electricity. That’s helped keep the lights on, for now, but the short-term focus is putting even more stress on a system that’s already stretched near the limit.

Twice in the past week, officials have called on Texans to limit electricity use during scorching afternoons as demand inched perilously close to overwhelming supply. Now, there are growing concerns over how long power plants can maintain the grueling pace as they run nonstop, according to Michele Richmond, executive director of Texas Competitive Power Advocates, a generator industry group.

“Things are going to break,” she said. “We have an aging fleet that’s being run harder than it’s ever been run.”

To meet the surge in power demand, Ercot, the grid operator, is leaning heavily on a mechanism called reliability unit commitments to ensure there’s enough supply. Plants are being regularly ordered to go into service, or remain in operation, and skip any scheduled maintenance. The measure also overrides shutdowns for economic factors or any other issues. And Ercot is using the rule more than ever before as the state battles bout after bout of extreme weather.

The Electric Reliability Council of Texas, as the operator is formally known, called for 2,890 hours of RUCs system-wide in the first half of this year. That’s more than triple the 801 hours in the first half of 2021, according to data from Ercot’s independent market monitor provided by Richmond. For all of 2020, there were 224 RUC hours.

The problem is that deferring repairs now will likely come back to haunt power-plant owners, Richmond said.

“If you put off preventative maintenance because it’s needed for reliability, it increases the chances you’ll need a more comprehensive outage” later on as plants start to malfunction, she said.

Growing Population, Crypto

The situation underscores that the Texas grid is relying on short-term solutions for what’s poised to be a long-term problem. The state is contending with a population boom that’s driven demand higher. Crypto mining has also taken off in the past year, bringing with it the industry’s power-intensive operations. Meanwhile climate change has made extreme weather events that drive up electricity use more likely to occur and more severe — creating situations like a deadly February 2021 freeze that caused blackouts across the state.

Brad Jones, Ercot’s interim chief executive officer, is aware he’s walking a fine line. On one hand, there have been six times in the past year that using RUCs have enabled the operator to avoid declaring grid emergencies. Or as Peter Lake, chairman of the Public Utility Commission of Texas, said at a June 22 hearing: Six times when the grid otherwise would’ve been “on the brink of rolling blackouts.”

However, Jones says he knows that forcing plants to stay in service is raising the risk of breakdowns. For example, a key concern at this time of year is boiler-tube leaks, especially at older plants. These leaks don’t always mean a plant must shut down immediately, but if they’re not closely monitored they can lead to bigger, more costly repairs.

“Typically, a generator can run for a while with the water leaking,” Jones said in an interview. “The question is, how long is that.”

The grid operator is in constant contact with generators and works to give them time to make needed repairs when conditions allow, Jones said. Ultimately, the state needs more power plants, and regulators are working on ways to make that happen, he said.

Ercot and other operators are facing dual challenges, said Michael Webber, an energy-resources professor at the University of Texas at Austin. Most companies schedule maintenance during the spring and fall, when the weather is mild and power use is typically lower.

But climate change means these windows of temperate weather are getting shorter. This year, for instance, an early May heat wave forced some generators to skip tune-ups. And periods of high heat are also lasting longer, putting more stress on power plants that are running all-out for weeks at a time.

Maintenance for power plants — especially older ones — can be time consuming and complicated, said Webber, who also serves as chief technology officer of Energy Impact Partners, a clean tech venture fund

“You kind of have to dismantle the plant,” he said. “It’s not something you can do in a couple of hours.”

All of this is exacerbated by the state’s aging fleet. The average age of coal-powered plants in Texas is about 50 years, and natural-gas plants average about 30 years.

“It’s kind of like humans — we need to rest and recover,” Webber said. “If we run full speed for a long time, we can collapse.”

CRIMINAL CAPPLETALISM

Taiwan accuses Chinese Apple supplier of stealing secrets, charges 14


New Apple products go on sale at flagship Apple Store in New York

Fri, July 15, 2022 

TAIPEI (Reuters) - Taiwanese prosecutors on Friday accused a Chinese Apple Inc supplier of stealing commercial secrets from a Taiwanese supplier and poaching its workforce to win orders from the U.S. company, saying it had charged 14 people.

Taiwan has been stepping up efforts to stop what it views as underhand and illegal activities by Chinese firms to steal know-how and poach away talent in what Taipei's government views as a threat to the island's tech prowess.

Prosecutors in New Taipei said after a year-and-a-half investigation they had found that China's Luxshare Precision Industry Co Ltd had targeted Taiwanese competitor Catcher Technology Co Ltd "in order to quickly enter the Apple production chain to win orders".

Luxshare "lured" Catcher's China based research and development team with promises of high salaries and stole business secrets from the Taiwanese firm, causing them big losses, the prosecutors said in a statement.

Luxshare was doing this in order to be able to "quickly build factories and mass produce cases for iPhones, iPads and other products", the statement said.

Luxshare did not immediately respond to a request for comment, and neither did Apple.

New Taipei prosecutors have now charged 14 people in connection with the case for breach of trust and taking commercial secrets for use overseas, they added.

"The department will do its best to investigate such cases to maintain the sound development of our country's enterprises and ensure the competitiveness of national industries."

Catcher, which makes iPhone and iPad cases, said in a statement it continues to implement and optimise the protection of trade secrets and intellectual property rights, and will investigate anything that infringes on its rights and interests.

The company is cooperating with the probe, it added.

In May, Taiwanese authorities raided 10 companies or their R&D centres operating in Taiwan without approval suspected of illegally poaching chip engineers and other tech talent.

(Reporting by Ben Blanchard; Editing by Tomasz Janowski)

A Mile-Long Procession Of Buses Carried Items From School Shooting Victims To Ted Cruz’s House




Steffi Cao
Thu, July 14, 2022

A fleet of 52 yellow school buses formed a mile-long procession to Sen. Ted Cruz’s house in Houston on Thursday morning — 4,368 empty seats to honor the number of children killed by gun violence since 2020.

The first bus carried items from school shooting victims, including a pair of worn-out checkered Vans from 15-year-old Gracie Muehlberger, killed at her Santa Clarita high school in 2019; a kindergarten graduation card with a smiling teddy bear on it, awarded to Sandy Hook victim Chase Kowalski; and a ​​LeBron James Miami Heat jersey adored by Joaquin Oliver, who died in the Parkland school shooting in 2018.

Named “The NRA Children’s Museum,” this project is the latest by artist Manuel Oliver, father of Joaquin.

“It’s partially with the intention that some people will think this is truly an NRA museum,” Oliver told BuzzFeed News.

Since his son's death, Oliver has channeled his advocacy for gun control into works of public art and activism. On Monday, he interrupted President Joe Biden during a Rose Garden speech, calling on the White House to open an office specifically for gun violence. Last year, he orchestrated a fake graduation where a former National Rifle Association president spoke to over 3,000 empty seats, representing the teen victims of gun violence. Now he wants people to look at which government officials accept NRA donations.

“We’re going after the money,” Oliver said. “These leaders are not loyal to the Second Amendment. They’re loyal to the gun industry and manufacturers, who protect them. And there’s lots of messages that supporting gun control is not patriotic. It’s corrupt, and I wanted to find a graphic way of showing them what the impact really is.”

Oliver hand-delivered a letter from his late son Thursday to the home of Cruz, who has received a total of $749,000 from the pro-gun group. The note, which had been written by a 12-year-old Joaquin, spoke to gun owners about his thoughts on gun control in the country. When the buses arrived, a security guard came out and accepted the letter. Oliver did not receive an immediate response from Cruz. The procession left shortly after due to encircling police presence.

Speaking to BuzzFeed News from Cruz’s offices on Thursday, Oliver said he was asked to leave the senator’s property by security, where he asked them a few questions from the sidewalk. “I asked if they wanted to know who I am, if they were a little curious,” he said. “I left the letter, and [the guard] took some pictures and made some calls. I don’t know who he called.”

Oliver said that his wife Patricia found the letter a month after Joaquin was killed. “It was from a school project,” he said. “He was a kid writing this letter. I was really impressed when I read it. We’ve been keeping it, our little letter to remind us about what we’re fighting for. My son knew, at 12 years old, what to do better than Ted Cruz. I want [Cruz] to read that with his own eyes.”

“I am writing this letter to talk to you about how were going to solve this gun law movement,” Joaquin said in the note, written five years before his death. “Most of you have a problem with the idea of universal back round check. Why are you mad that there’s a back round check it’s for your own good maybe you are fond of having crazy people with death machines. You shouldn’t have anything against back round checks if you’re innocent.”

Oliver said that he was hoping Cruz would be at his offices, but he instead met someone who identified themself as one of the senator's staff advisers, who told him that the lawmaker was currently at the Capitol.

Recently the nation has seen a renewed surge of mass shootings throughout the country, from the horrifying elementary school shooting in Uvalde to the recent 4th of July shooting in Highland Park, Illinois. Part of Oliver’s goal was to put pressure on officials like Cruz and Marco Rubio to renounce funding from the NRA and to enact legislation for universal background checks.

“It’s a shame on us as a nation,” Oliver said. “We are at a point where any option is a miracle. The latest gun measures, we all know it was not enough. The guys that wrote it knew it was not enough. We think of ourselves as the most powerful nation in the world — and I hate that we’re OK with solutions that are clearly not enough.”

Gun violence is the leading cause of death for American children; there have already been over 300 mass shootings this year alone. The bus fleet, which traveled to Cruz’s home and Houston office today, hopes to highlight the scale of loss, and the emphasis on how young and innocent their lives were.

“I believe young people will make sure gun violence will not be part of their futures,” Oliver said. “But we need to help them build a foundation to get there.”

Speaking to the press outside of Cruz’s offices, Oliver revealed that this will be the first of many stops at various pro-gun government leaders’ spaces. “If you’re a senator and you believe the things that are happening are OK, look out for a yellow school bus that will be outside your office,” he said. ●

Jul. 14, 2022, at 17:51 PM

Dalai Lama travels to remote Ladakh region bordering China


FILE- Tibetan spiritual leader the Dalai Lama gestures to indicate that he is in good health during a religious talk at the Tsuglakhang temple in Dharmsala, India, Friday, March 18, 2022. The Dalai Lama on Friday, July 15, 2022, arrived in the remote Ladakh region bordering China where he received a rousing reception. He will stay in Ladakh for about 45 days. 

(AP Photo/Ashwini Bhatia, File) (ASSOCIATED PRESS)

AIJAZ HUSSAIN
Fri, July 15, 2022 


SRINAGAR, India (AP) — The exiled Tibetan Buddhist spiritual leader the Dalai Lama on Friday arrived in India's remote Ladakh region bordering China where he received a rousing reception.

Thousands of people lined both sides of the road outside the airport in the cold desert region’s Leh town to welcome the Dalai Lama, who is touring outside his base in the northern Indian city of Dharmsala for the first time since the outbreak of the coronavirus pandemic in 2020. He will stay in Ladakh for about 45 days.

The Dalai Lama has made Dharmsala his headquarters since fleeing from Tibet after a failed uprising against Chinese rule in 1959. India considers Tibet to be part of China, though it hosts Tibetan exiles.

Officials said at least 20,000 people gathered all along the road to the Dalai Lama's summer palace, some 10 kilometers (6 miles) from the airport. The ride took the spiritual leader about 90 minutes, since the entire stretch was filled with people jostling and some dancing in traditional attire.

They welcomed the spiritual leader by waving religious flags and Tibetan flags and showering the road with flower petals. At least 7,000 Tibetans live in Ladakh.

“Happy. Once more (I have) come (to) Ladakh,” the Dalai Lama said in tangled English as he entered his palace. “These people showing from heart this.”

The visit is also his first since India split the high-altitude region from disputed Kashmir and took direct control of it in 2019 while revoking the entire territory's semiautonomous status. A year after that change, Indian and Chinese troops came close to war in Ladakh and ever since they have been locked in a military standoff along their disputed border.

China criticized India’s Prime Minister Narendra Modi for greeting the Dalai Lama on his 87th birthday earlier this month, saying New Delhi should stop using Tibet-related issues to interfere in China’s “internal affairs.”

India’s Foreign Ministry hit back and said: “It has been a consistent policy of our government to treat him as a guest in India and as a respected religious leader who enjoys a large following in India.”

Before his last visit in 2018, the Dalai Lama would frequently travel to Ladakh and deliver religious sermons in the region, which is famous for its Buddhist monks in mountaintop monasteries, sparsely populated and stunning landscapes and elusive snow leopards prowling rugged terrain.

China doesn’t recognize the Tibetan government-in-exile and hasn’t held any dialogue with the representatives of the Dalai Lama since 2010.

China says Tibet has historically been part of its territory since the mid-13th century, and the Communist Party has governed the Himalayan region since 1951. But many Tibetans say they were effectively independent for most of their history, and that the Chinese government wants to exploit their resource-rich region while crushing their cultural identity.

The Dalai Lama denies being a separatist and says he only advocates substantial autonomy and protection of Tibet’s native Buddhist culture.

‘You do not have to settle anymore’: Record-high inflation keeps the Great Resignation rolling


Serah Louis
Fri, July 15, 2022 


It’s been over a year since the American workplace turned upside down, with employees quitting en masse in search of more fulfilling jobs and flexible work arrangements.

But as inflation hits a new 40-year high, stragglers have found yet another convincing reason to jump ship.

“It’s a worker’s market,” says Andrew Flowers, labor economist at job advertisement firm Appcast. “And this bargaining power, it means that, with high inflation, this is the time to either ask for a raise or to potentially find a better offer elsewhere.”

Another 4.3 million Americans quit their jobs in May, the latest numbers show, nearly unchanged from the month before and still among the highest levels in decades.


While job vacancies decreased, there remain almost two jobs available for every worker who’s looking.

With the rising cost of food, gas and everything else giving all Americans a pay cut, workers who haven’t yet made a move have every reason — and every opportunity — to act soon.

The window remains open for now

The consumer price index surged to a spectacular 9.1% in June from a year earlier, putting pressure on workers who would otherwise be happy with the status quo.

Globally, one in five employees is likely to switch jobs in the next year, with most leaving for a better salary, according to a recent survey by accountancy firm PricewaterhouseCoopers.

Over a third are planning to ask for a raise in the next year, though that number is significantly higher in the tech sector (44%) and lower in the public sector (25%).

“Employers know that quit rates are high. They know that job openings are plentiful. And so they know their employees can be choosier,” Flowers says.

The added pressure of rising prices means employers may consider proactively hiking wages to avoid losing employees. Wages and salaries in the private sector increased by 5% for the 12-month period ending in March.

“Employers have a really insatiable appetite at the moment to hire,” Flowers says.

However, he adds, it’s unclear how long the labor market will remain so tight, especially as the Federal Reserve raises interest rates to cool off the economy.
How to go about asking for a raise

Whether or not it’s a good time for you to request a raise can really depend on your industry and whether your organization is thriving, says Chelsea Jay, a career coach based in Lansing, Michigan.

The accommodation and food services and leisure and hospitality sectors have seen the highest quit rates, reports Harvard Business Review, while retail and non-durable manufacturing industries have experienced the most growth in their quit rates. Workers in professional and business services are also leaving in droves.

Flowers says it’s fair to bring up rising prices when asking for a raise, though Jay argues that shouldn’t be the focus of the conversation.

“You can talk about inflation — but more than inflation, I encourage professionals to talk about their skill set and what they have brought to the organization,” says Jay.

She recommends talking to your coworkers about your salaries and doing research within your company, industry, city, state and career level. It’s also a good idea to look into when your company typically gives out raises and bring an estimate to the table at that time.

Nearly half of workers who tried to renegotiate their salary last year were successful, a survey by the job search site FlexJobs found.

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What if you can’t get a raise?

If your request is denied, consider renegotiating your benefits. You can look into a hybrid working arrangement or more paid time off, or ask your employer to pay for a professional development opportunity, like a certification course.

That said, Jay warns against relying on short-term handouts, like retention bonuses.

“It's a Band-Aid to cover up the bigger issue,” she says. “Companies don't give bonuses every single year. So if you are not happy with your salary, either you need to get a raise from them, or you need to move on to a company that is willing to pay you right.”

She adds that everyone’s priorities are different, and you need to determine what’s most important to you if you decide to seek work elsewhere. In your interview with a potential employer, ask about the company culture, leadership, expectations of your role and the benefits and perks you’re interested in.

“Don't settle. You're in a time where you do not have to settle anymore,” she says.
What can employers do to retain talent?

Employers may see higher retention when they promote from within, Flowers emphasizes.

“It's one thing to say, ‘Hey, I'm going to leave this job and get a 10% raise elsewhere.’ But if a worker sees that they have a future and that they can move up the ladder through internal mobility … then maybe they won't just go take the highest offer.”

Jay also advises employers to give quitting employees the space to be transparent about why they’re leaving in their exit interviews.

It’s important that companies actively respond to feedback by implementing new policies and making changes to avoid losing even more workers in the future.

“[The Great Resignation] really shone a light on the issues that corporate America and these companies are having when it comes to the way that they treat their employees and how they show value and how they show respect,” says Jay.

“So if anything, what it did for a lot of companies was made them realize, hey, we're slipping in these areas. We need to step our game up here.”
What to read next


This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Israel sells Haifa Port to India's Adani Ports, Israel's Gadot for $1.2 billion

Thu, July 14, 2022 

By Ari Rabinovitch and Jonathan Saul

JERUSALEM (Reuters) - Israel said on Thursday it will sell Haifa Port, a major trade hub on its Mediterranean coast, to winning bidders Adani Ports of India and local chemicals and logistics group Gadot for 4.1 billion shekels ($1.18 billion).

Gadot and Adani made it to the end of a two-year tender process that Israel hopes will lower import prices and help shorten notoriously long wait times at Israeli harbors.

"The privatization of the port of Haifa will increase competition at the ports and lower the cost of living," Finance Minister Avigdor Lieberman said.

Adani will have a majority 70% stake and Gadot will hold the remaining 30%, according to an industry official.

"Delighted to win the tender ... Immense strategic and historical significance for both nations!" Adani Group Chairman Gautam Adani wrote on Twitter.

Global supply chains have been hit over the past year by lack of staffing at ports, lockdowns and a strain on available ships for hire as vessels get stuck due to congestion in many parts of the world.

About 98% of all goods move in and out of Israel by sea and the government has been upgrading the sector to maintain economic growth.

Haifa, surrounded by the Carmel mountains to the east which limit winds and choppy waters, has operated as a port for centuries. Today, it is Israel's leading deep water port and handled about half the country’s freight volume in 2021.

Warming ties with neighbouring Arab countries are also creating new trade opportunities for Israel and Haifa is well placed to become a regional hub, as well as a link between Asia and Europe.

Adani Ports, which has said it is the largest transport utility in India, is targeting expansion and seeks to become the premier global port group, the company’s chief executive Karan Adani, told an earnings call in May.

The new owners will compete with a private port that opened down the bay last year, which is operated by Shanghai International Port Group (SIPG).

Haifa Port said the new group will operate the port until 2054 and that along with containers it will now be able to focus on handling general cargo and hosting cruises.

($1 = 3.4876 shekels)

(Additional reporting by Sudarshan Varadhan in New Delhi; editing by Jonathan Oatis and Andrew Heavens)