FROM THE USA

New 'ultra-transmissible' Covid 'Kraken' variant sparks warning from WHO

Kieran Doody
Thu, 5 January 2023 

 (Image: PA)

Health experts have issued a warning over a new “ultra-transmissible” Covid strain spreading across the UK.

The new Covid XBB.1.5 variant dubbed “The Kraken” currently surging across the US has already been spotted in parts of the UK.

The World Health Organisation’s (WHO) technical lead for Covid Dr. Maria Van Kerkhove expressed her concern about the growth of the new variant.

Speaking at a press conference, she said: "We are concerned about its growth advantage in particular in some countries in Europe and in the US... particularly the Northeast part of the United States, where XBB.1.5 has rapidly replaced other circulating variants.

"Our concern is how transmissible it is… and the more this virus circulates, the more opportunities it will have to change.”

Covid XBB.1.5 should be 'wake-up call' to UK

Professor Lawrence Young from Warwick University told the Mail Online that the new variant should be a “wake-up call” to the UK.

He said: “The XBB.1.5 variant is highly infectious and is driving increased hospital admissions in New York, particularly among the elderly. Waning immunity, more indoor mixing because of the cold weather and lack of other mitigations, such as wearing facemasks, are also contributing to this surge of infection in the US.

“This is a wake-up call - a sharp reminder that we can't be complacent about Covid. The threat of XBB.1.5 and other Covid variants further exacerbates the current NHS crisis and stresses the need for us to remain vigilant.”

He added: “We need to continue to monitor levels of infection with different variants in the UK, encourage those who are eligible to get their boosters shots - why not extend this to the under 50s - and promote the value of other mitigation measures.”

XBB.1.5: ‘Most Transmissible’ Strain Could Drive New COVID-19 Surge In US

Jan 4, 2023 By Luigi Caler 

There are concerns that a new COVID-19 surge in the United States could unfold in the wake of the new omicron subvariant’s emergence. 

XBB.1.5 is the new member of the omicron sublineage that sparked concerns among health experts this week after data showed how quickly it spread.

Dr. Ashish Jha, the White House COVID-19 response coordinator, noted on Twitter Wednesday that there’s been a “stunning increase” in the cases caused by XBB.1.5 in the country over December. 

“Over the holidays, you may have heard about omicron XBB.1.5. It went from 4% of sequences to 40% in just a few weeks. That’s a stunning increase,” he tweeted. 

Epidemiologist and the World Health Organization’s (WHO) technical lead on COVID-19 Maria Van Kerkhove echoed the same sentiments, saying they are “concerned about its growth advantage.”

Van Kerkove pointed out via CNN that the new strain, first detected in the U.S., is the “most transmissible form of omicron to date.” It has already spread to at least 29 countries thus far. 

Despite the threat of XBB.1.5 starting new waves of infections in different parts of the world, Van Kerkhove was optimistic that there wouldn’t be serious effects when proper countermeasures remained in place. 

“We do expect further waves of infection around the world, but that doesn’t have to translate into further waves of death because our countermeasures continue to work,” she explained. 

Jha said in a separate tweet that XBB.1.5 “binds more tightly to the human ACE receptor,” so it could be more contagious than the other omicron subvariants. 

He added that the best protection tool against XBB.1.5 is the new bivalent COVID-19 vaccine. The bivalent shots from Moderna and Pfizer can help protect against infection and serious illness caused by the new strain, according to the expert. 

“We can work together to manage the virus. And if we all do our part, we can reduce the impact it will have on our lives,” he concluded his Twitter thread. 

Meanwhile, Van Kerkhove said the WHO is working on a risk assessment for the new strain by looking at real-world data on hospitalizations and their severity. The report will be released in the next few days.

New COVID-19 Variant Mutation Has

'Alarming' Immunity Evasion; Could 

Cause US Surge

Jan 4, 2023By Danielle Ong 

A new offshoot strain, XBB.1.5, of the COVID-19 Omicron variant has been found to have "alarming" immunity evasion, which could cause another surge of cases in the United States, according to experts.

Dr. David Ho, professor of microbiology and immunology at Columbia University, said the XBB.1 offshoot variant is 63 times less likely to be neutralized by the antibodies in people who have either been infected by COVID-19 or have been vaccinated against the virus when compared to the BA.2 variant. The same is the case with the XBB.1.5 strain.

"It is alarming that these newly emerged subvariants could further compromise the efficacy of current COVID-19 vaccines and result in a surge of breakthrough infections as well as re-infections," Dr. Ho wrote in his findings, which were recently published in the journal Cell.

In addition to its high immune evasion, the XBB.1.5. also has a key mutation at site 486, allowing it to bind better to ACE2, which is the door the virus uses to enter human cells. This mutation means the offshoot variant is more infectious.

"The mutation is clearly letting XBB.1.5 spread better," Jesse Bloom, a computational virologist at the Fred Hutchinson Cancer Center, wrote in an email to CNN.

Experts are now warning that the strain's features could give it the ability to cause another surge of COVID-19 cases in the U.S.

As of Friday last week, the U.S. Disease Control and Prevention (CDC) estimated that the XBB.1.5 variant accounted for 41% of new COVID-19 infections throughout December.

In northeastern states, the CDC said the offshoot variant is causing about 75.3% of all new cases. Those states include Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.

In New York and New Jersey, the XBB.1.5 strain caused 72.2% of cases during the last week of December.

As of Tuesday, the U.S. reported a total of 100,845,043 COVID-19 cases since the pandemic began in 2020. Among those, 1,093,971 have died of the virus, according to data from Johns Hopkins University.

Ireland's Amazon workers may escape worst of job cuts announcement

Many of the 5,000 staff at Amazon’s operations in Ireland include software and network engineers in addition to warehouse workers in the company’s fulfilment centre in Dublin.

Amazon is preparing to cut 18,000 jobs in response to the economic downturn.

THU, 05 JAN, 2023 - 
CÁIT CADEN

Amazon’s workforce in Ireland is likely to escape the full effect of the multinational’s latest job cuts announcement, which will largely impact those with retail roles.

Amazon’s CEO Andy Jassy said in a blog post that the company plans to increase the number of planned job cuts from 10,000, announced in November, to 18,000 due to the “uncertain economy”.


“Several teams are impacted, however, the majority of role eliminations are in our Amazon stores and people, experience, and technology (PXT) organisations,” said Mr Jassy.

Many of the 5,000 staff at Amazon’s operations in Ireland include software and network engineers in addition to warehouse workers in the company’s fulfillment centre in Dublin.

Minister for Enterprise, Trade, and Employment Simon Coveney said: “My department has been speaking directly to Amazon and will stay in close contact with the company, as of course will the IDA."

"We'll do everything we can to make sure that the conditions here in Ireland are as competitive as they possibly can be to make sure that companies are announcing new jobs as opposed to job losses," he added.

Amazon did not provide any further detail about the planned job cuts to the Irish Examiner.

Job losses

It is unclear how many people have been laid off so far by Amazon since it announced plans to cut jobs last year. Now that the number of planned layoffs has increased by 8,000, Amazon said it will start contacting impacted employees on January 18.

The company did say there would be some job cuts in Europe, but it remains unclear what countries will be affected. The global retail and delivery giant operates stores in nine European countries but has yet to enter the Irish physical retail space.

Reports last year signalled that the company’s bricks and mortar shops have been struggling as it confirmed plans to close 68 stores across the US and the UK.

Blog post

Mr Jassy was prompted to publish his blog post after one of the 1.5m people that work at Amazon leaked the news that more employees are expected to be cut from the company this year.

In his blog post, Mr Jassy also said that when they were preparing to cut jobs last year, he “expected there would be more role reductions in early 2023”.

“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” said Mr Jassy.

Amazon investors gave a positive reaction to the latest belt-tightening efforts, betting it may bolster profits at the e-commerce company. The shares climbed nearly 2% in late trading after the plan was first reported.

Amazon is not alone in slimming down its workforce. The tech slowdown, spurred on by rising interest rates, increasing regulatory requirements, and soaring inflation has led to job cuts announcements by other tech giants like Stripe, Twitter, Meta, Intel, and most recently Salesforce.

Salesforce said it will cut 10% of its global workforce, further fuelling fears for the tech industry in Ireland and abroad.

The department of Enterprise, Trade, and Employment has not received a collective redundancy notification in relation to potential redundancies at Salesforce yet.

Additional reporting by Bloomberg

CES gadget gala looks to shake off economic gloom

by Glenn CHAPMAN

The premier CES consumer electronics show in Las Vegas is expecting more

 than 100,000 people as it strives to regain momentum after two years of the 

pandemic vexing real-world gatherings.

The annual CES consumer electronics extravaganza throws open its doors in Las Vegas on Thursday as the industry looks to the latest innovations to help cure the pain from an ailing global economy.

High inflation, lingering supply chain troubles and tech company layoffs provide a dark backdrop for technology's premier trade show where more than 100,000 attendees are expected from around the world until Sunday.

Consumer Technology Association research director Steve Koenig reminded CES-goers of previous innovations from smartphones to high-speed internet that soared to success after the "last big economic downturn" more than a decade ago.

"This time, I think the powerful new waves of technological change that will really remedy inflation and restore global GDP growth will come from the enterprise side," Koenig said during a presentation by the CTA, which runs CES.

These will include robotics to make workplaces more efficient, on-the-job virtual reality, and automated vehicles such as tractors that tend to farmland without drivers on board, according to Koenig.

Technology, thanks to increased productivity, "is a deflationary force in the global economy," underlined Gary Shapiro, president and CEO of CTA.

Homes and cars

Spreading out from the Las Vegas convention center to ballrooms in an array of hotels on the famous Sin City strip, CES will have televisions, electric roller skates, self-piloting baby strollers and more aimed at wowing showgoers.

While major TV makers including LG, Samsung and TCL will have stunning displays, "gone are the days" when CES was first and foremost about TVs, laptops and gadgets, according to Forrester principal analyst Thomas Husson.

"Now that technology innovation and software is embedded everywhere, expect many brands to showcase innovation around electric vehicles, robotics, and embedded artificial intelligence," Husson said.

Samsung Electronics company's Bespoke Home appliances introduced at CES 

in Las Vegas are part of a trend toward home devices being designed to work 

more collaboratively and independently to make lives easier.

FIFTIES HOME OF THE FUTURE

"Don't get me wrong, there is no doubt we will continue to see a ton of robotic toys and gadgets."

CES has, however, increasingly become a place for showing off electric cars (EVs) that are becoming internet-linked computers on wheels, analysts insisted.

"Beyond EVs, the recent US laws like the Inflation Reduction Act (IRA) will spark more interest in sustainability innovation," Husson said.

This was a reference to the US government's recently passed IRA that is expected to pour hundreds of billions of dollars into green technology and other climate friendly projects.

"That's definitely the area to expect the most disruptive innovation—even though I fear too little will be announced (at CES)."

SIXTIES HOME OF THE FUTURE

Lingering COVID

While CES organizers say show attendance is taking "another step toward a return to normal, pre-pandemic levels," there is a lingering COVID effect.

CES, like many other trade shows, went completely virtual in 2021, and last year mixed real-world with online events drawing a light crowd to Las Vegas.

TV and appliance makers as well as startups at the forefront of artificial intelligence have returned to CES this go-around, with Meta letting people try its latest virtual reality gear and Google showing off its own smart home offerings.

South Korean giant Samsung unveiled a new line-up of televisions, along with kitchen appliances infused with artificial intelligence to work with other connected devices and online platforms.

A big-screen television boasting completely wireless connections was part of a

 line-up shown off by South Korea-based LG at the CES consuer electronics 

show in Las Vegas.

LG Electronics unveiled an OLED television it touted as the first wire-free and voice commanded TV for the consumer market.

"The M3 comes with a separate Zero Connect box that sends video and audio signals wirelessly to LG's cinematic, 97-inch screen," the company said.

Tight budgets

Amid the economic gloom, companies at CES looking to woo consumers will need to make sure prices appeal to people struggling with inflation and, perhaps, a bit weary of living online during the pandemic.

The CTA estimates that spending on consumer electronics and services in the United States this year will fall to $485 billion, lower than the record $512 billion in 2021.

Still, while "looming recession and inflation will weigh on household budgets," tech industry revenues are expected to remain higher than pre-pandemic figures, according to the association.

Many tech firms flourished during the pandemic, hiring in droves. As lifestyles began easing back to normal, those firms began laying off employees and tightening budgets.

On Wednesday online retail giant Amazon announced it would axe more than 18,000 jobs—the largest staff cuts in its history. It too had hired at pace during the pandemic.

Koenig said the economic conditions masked a continued lack of qualified workers.

© 2023 AFP

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Explore further

AI infused everything on show at CES gadget extravaganza

Hong Kong lifts its controversial hamster ban that made the furry animals a public enemy due to COVID

BYSHIRLEY ZHAO AND BLOOMBERG
January 4, 2023

Hong Kong plans to lift its ban on importing hamsters.
BERTHA WANG/AFP VIA GETTY IMAGES

Hong Kong will lift a ban on importing hamsters for sale around the middle of this month, a year after the city ordered a culling of the furry mammals and shut down all pet shops selling them to eliminate the Covid-19 virus.

Imported hamsters will still need to test negative for Covid before they are made available for sale, because studies found that they are susceptible to the virus and could easily spread to humans, a spokesman for the city’s Agriculture, Fisheries and Conservation Department said in an emailed statement.

The city banned the importation of all small mammals for commercial purposes in January last year after nearly a dozen hamsters imported from the Netherlands and sold at a local pet store were found to be infected with delta, a virulent Covid-19 variant that hadn’t been detected in the city for months until a worker there tested positive. Officials ordered a culling of thousands of the pets. By May, the government had resumed importation of all small mammals other than hamsters given the risks.

Hong Kong has been dismantling its Covid Zero policies for months, including scrapping hotel quarantine, lifting restrictions on new arrivals going to bars or restaurants, and removing PCR tests for travelers after they arrive in the city. The financial hub has said it plans to keep its mask mandate, citing concerns about the strain being put on health-care system from both Covid and influenza.

In recent weeks, China has also been rapidly shifting away from its zero tolerance to the virus after three years of isolation from the rest of the world. The country will reopen to the world and scrap quarantine for arrivals from Jan. 8 as it seeks to boost its flagging economy. Hong Kong, whose border with mainland China has been effectively shut since early 2020, is also pursuing a resumption of quarantine-free travel with the mainland on Jan. 8.

A MORNING JOE REGULAR

GLAAD Denounces NYT's Hiring of Anti-LGBTQ+ Columnist David French

BY TRUDY RING

JANUARY 04 2023 

The New York Times has brought on an anti-LGBTQ+ columnist, David French, a former National Review editor who was once an attorney with the Alliance Defending Freedom.

The Times announced French’s hiring Tuesday, calling him “an expert on the law, faith and politics.” But GLAAD is pointing to his “deep history of anti-LGBTQ activism.” GLAAD also notes that he joins the Times after the paper ended its relationship with acclaimed trans writer Jenny Boylan last year and brought on another anti-LGBTQ+ columnist, Pamela Paul.

“It is appalling that The New York Times hired and is now boasting about bringing on David French, a writer and attorney with a deep history of anti-LGBTQ activism,” GLAAD President and CEO Sarah Kate Ellis said in a press release. “After more than a year of inaccurate, misleading LGBTQ coverage in the Times opinion and news pages, the Times started 2023 by announcing a second anti-transgender opinion columnist, without a single known trans voice represented on staff. A cursory search for French turns up numerous anti-LGBTQ articles and his record as an attorney for the Alliance Defending Freedom, an organization that the Southern Poverty Law Center designated an anti-LGBTQ hate group that actively spreads misinformation about LGBTQ people and pushes baseless legislation and lawsuits to legalize discrimination, including just last month at the Supreme Court. The Times left out these facts in its glowing announcement of French’s hiring, and also forgot to mention his work as a co-signer on the 2017 Nashville Statement, which erased LGBTQ voices of faith and falsely stated ‘that it is sinful to approve of homosexual immorality or transgenderism.’ The Times had the gall to claim French as a ‘faith’ expert despite this known history.

“The Times’ opinion section continues to platform non-LGBTQ voices speaking up inaccurately and harmfully about LGBTQ people and issues. This is damaging to the paper’s credibility. The Times opinion section editors’ love letter to French yesterday shows a willful disregard of LGBTQ community voices and the concerns so many have shared about their inaccurate, exclusionary, often ridiculous pieces. Last year, the Times ended popular trans writer Jenny Boylan’s column, leaving the opinion section with no trans columnists and a known lack of transgender representation on its overall staff. Who was brought on after Boylan? Pamela Paul, who has devoted columns to anti-transgender and anti-LGBTQ disinformation, and David French. This reflects a growing trend on the news and opinion pages of misguided, inaccurate, and disingenuous ‘both sides’ fearmongering and bad faith ‘just asking questions’ coverage. The Times started 2023 by bragging about hiring another anti-trans writer, so LGBTQ leaders, organizations, and allies should make a 2023 resolution not to stay silent as the Times platforms lies, bias, fringe theories, and dangerous inaccuracies.”

In the past few years, French has written columns with anti-LGBTQ+ and, often, specifically anti-trans opinions. “The sexual revolutionaries are moving on from the cause of gay marriage to recasting and rethinking law, culture, religion, and biology for the sake of indulging the troubled fantasies of a tiny, disturbed population of transgendered, or ‘genderqueer,’ Americans,” he wrote in 2015 in National Review. (Being transgender and being genderqueer are not the same thing.)

The Nashville Statement, issued in 2017, was drafted in that city by a coalition of conservative Christian leaders called the Council on Biblical Manhood and Womanhood, whose website says it “exists to equip the church on the meaning of biblical sexuality.” Part of the statement reads, “We affirm that it is sinful to approve of homosexual immorality or transgenderism and that such approval constitutes an essential departure from Christian faithfulness and witness.”

Last year, French actually praised the Respect for Marriage Act, which wrote marriage equality into federal law while assuring that it won’t interfere with religious liberty. The act “doesn’t solve every issue in America’s culture war (much less every issue related to marriage), but it’s a bipartisan step in the right direction,” he wrote in The Atlantic. But in the same article, he noted that he filed a friend-of-the-court brief in a case recently heard by the Supreme Court involving a web designer arguing that she has the right to refuse service to same-sex couples; he sided with the designer. And GLAAD points out that he has never repudiated the Alliance Defending Freedom, which is representing the designer, one of its many anti-LGBTQ+ clients over the years.

Paul became a Times columnist in 2022. Her contributions so far include one objecting to the use of “LGBTQ” rather than “gay” or “lesbian” and another asserting that trans-inclusive language around pregnancy and birth erases women.

CRIMINAL CRYPTO CAPITALI$M
US to seize $624m of Robinhood shares tied to FTX founder Bankman-Fried

JANUARY 04, 2023

Sam Bankman-Fried purchased about 7.42 per cent of Robinhood’s stock through Emergent Fidelity Technologies.

WILMINGTON, Delaware — United States prosecutors are in the process of seizing shares of Robinhood Markets tied to Sam Bankman-Fried, who has been charged with fraud in the collapse of the FTX cryptocurrency exchange, a US attorney told a judge on Wednesday (Jan 4).

The Department of Justice did not believe the 56 million shares of Robinhood, worth about US$465 million (S$624 million), were property of a bankruptcy estate, US attorney Seth Shapiro told US bankruptcy judge John Dorsey, who is overseeing the FTX bankruptcy.

Mr Shapiro said that competing claims to shares of the stock-trading app could be worked out in a forfeiture proceeding.

Bankrupt crypto firm BlockFi, FTX and liquidators in Antigua have all laid claim to the Robinhood stock, along with Bankman-Fried.

FTX, along with Bankman-Fried, has laid claim to the Robinhood stock.

Prosecutors have accused Bankman-Fried of engaging in a years-long “fraud of epic proportions” that cost investors, customers and lenders potentially billions of dollars by using customer deposits to support his Alameda Research hedge fund.

Read AlsoBankman-Fried's parents have received physical threats since FTX collapsed

He pleaded not guilty to counts of wire fraud and conspiracy. He has acknowledged risk management failures at FTX, but has said he did not believe he was criminally liable.

Bankman-Fried purchased about 7.42 per cent of Robinhood’s stock through Emergent Fidelity Technologies, using funds borrowed from Alameda Research, according to an affidavit he filed in December in an Antigua court.

Bankman-Fried said he owned 90 per cent of Emergent and Gary Wang, another former FTX executive, owned 10 per cent. Wang has pleaded guilty to fraud charges from the FTX collapse and is cooperating with prosecutors.

Mr Shapiro also said prosecutors had seized US bank accounts affiliated with FTX’s Bahamas-based business, known as FTX Digital Markets. Court records showed that the accounts at Silvergate Bank and Farmington State Bank, which does business as Moonstone Bank, held about US$143 million.

Mr James Bromley, an attorney for FTX, told Judge Dorsey that none of the assets targeted for seizure were currently in the direct control of any of FTX entities in Chapter 11.

He said the Robinhood shares were subject to litigation and it was an “open question” about who owns them.

The Robinhood stock, which closed on Wednesday at US$8.36 per share, is also being claimed by BlockFi, another bankrupt crypto firm, as well as liquidators of Emergent, which is in insolvency proceedings in Antigua, where it is incorporated.

BlockFi is suing Emergent in a bid to seize the stock, which was pledged by Alameda as collateral to guarantee repayment of a loan made by BlockFi. Two days after the pledge, Alameda filed for bankruptcy along with FTX.

FTX’s former top lawyer aided U.S. authorities in Bankman-Fried case

ANGUS BERWICK
REUTERS

FTX’s former top lawyer Daniel Friedberg has co-operated with U.S. prosecutors as they investigate the crypto firm’s collapse, a source familiar with the matter said, adding pressure on founder Sam Bankman-Fried who was arrested on criminal fraud charges last month.

Friedberg gave details about FTX in a Nov. 22 meeting with two dozen investigators, the person said. The meeting, held at the U.S. Attorney for the Southern District of New York’s office included officials from the Justice Department, Federal Bureau of Investigation, and the U.S. Securities and Exchange Commission, the source said. Emails between attendees scheduling the meeting with those agencies were seen by Reuters.

At the meeting, he told prosecutors what he knew of Bankman-Fried’s use of customer funds to finance his business empire, the source said. Friedberg recounted conversations he had with other top executives on the subject and provided details of how Bankman-Fried’s hedge fund Alameda Research functioned, the source said.

Friedberg’s co-operation has not been previously reported. He has not been charged and has not been told he is under criminal investigation, the source said. Instead, he expects to be called as a government witness in Bankman-Fried’s October trial, the person said.

Friedberg’s lawyer, Telemachus Kasulis, the FBI and FTX did not respond to requests for comment on his co-operation. The SEC, the Department of Justice and Bankman-Fried’s spokesman declined to comment.

Bankman-Fried is accused of diverting billions of dollars in FTX client funds to Alameda to bankroll venture investments, luxury real estate purchases, and political donations. On Tuesday, he pleaded not guilty in Manhattan federal court.

Manhattan U.S. Attorney Damian Williams, who is leading the criminal case against now bankrupt FTX, said last month: “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it.”

Two of Bankman-Fried’s closest associates, Caroline Ellison, Alameda’s former chief executive, and Gary Wang, FTX’s former chief technology officer, pleaded guilty to fraud and agreed to co-operate. A lawyer for Ellison didn’t respond to a request for comment. Wang’s lawyer declined to comment.

FTX filed for bankruptcy protection on Nov. 11. A few days later, on Nov. 14, Friedberg received a call from two FBI agents based in New York. He told them he was willing to share information but needed to ask FTX to waive his attorney-client privilege, according to a person familiar with the matter and emails viewed by Reuters.

Friedberg wrote to FTX the next day asking the company to waive his privilege so he could co-operate with prosecutors, according to the email seen by Reuters. FTX did not do so, but agreed with Friedberg on the points he could disclose to investigators, the person said.

Friedberg then wrote back to the two FBI agents, telling them in an e-mail reviewed by Reuters: “I want to co-operate in all respects.”

The U.S. Attorney’s Office set up a meeting where Friedberg signed so-called proffer letters prepared for him by the SEC and other agencies, according to the source and an e-mail exchanged by participants. Proffer letters typically describe a potential agreement between authorities and individuals who are witnesses or subjects of an investigation.

Prior to his work advising FTX, Friedberg advised a mix of banking, fintech, and online gaming companies.

One of his previous employers, a Canadian online gaming firm named Excapsa Software, where he was general counsel, also drew controversy due to a cheating scandal involving a poker site it operated called Ultimate Bet. A Canadian gaming commission in 2008 fined Ultimate Bet $1.5 million for failing to enforce measures to prevent fraudulent activities. Excapsa has since dissolved.

According to an audio recording available on the website PokerNews, Friedberg and some other Ultimate Bet associates privately discussed that year how to handle the scandal and minimize the amount of refunds owed to players. Friedberg previously told NBC News that the audio was illegally recorded but NBC’s article did not say that Friedberg challenged its authenticity.

Friedberg first represented Bankman-Fried in 2017 as outside counsel while at U.S. law firm Fenwick & West, where he chaired its payment systems group, the source familiar with the matter said. At the time, the source said Friedberg advised Bankman-Fried on running Alameda, which he founded that year.

In 2020, when Bankman-Fried launched a separate exchange for U.S. customers called FTX.US, Friedberg moved in-house as FTX’s chief regulatory officer.

In a now-deleted blog post published that year on FTX’s website, Bankman-Fried wrote that Friedberg was FTX’s legal adviser “from the very beginning,” noting he had been “with us through thick and thin.”

Friedberg resigned from his position on Nov. 8, a day after Bankman-Fried disclosed to top executives that FTX was almost out of money, according to the source and three other people briefed on the talks, along with text messages his legal team exchanged at the time.

Will Crypto Ever Be a Safe Investment?

Analysis by Andy Mukherjee | Bloomberg
January 4, 2023 at 11:32 p.m. EST

The Bitcoin logo on souvenirs during the listing ceremony for the CSOP Bitcoin Futures and CSOP Ether Futures exchange-traded funds (ETFs) at the Hong Kong Stock Exchange in Hong Kong, China, on Friday, Dec. 16, 2022. A pair of Hong Kong ETFs investing in Bitcoin and Ether futures raised $79 million as the city pushes ahead with a plan to become a crypto hub even as the sector globally reels from the FTX collapse. (Bloomberg)

In the annals of cryptocurrencies, 2022 will go down as the year when the industry nearly died. But then December saw the birth of a pair of exchange-traded funds in Hong Kong, offering new hope to both retail and professional investors.

Asia’s first futures ETFs for Bitcoin and Ether join a growing list of initiatives that will go some way toward ameliorating the current crisis of legitimacy facing virtual assets. A big dampener is the confusion surrounding safe custody of crypto holdings. Sam Bankman-Fried’s FTX, the most spectacular of last year’s string of crypto debacles, has brought the hapless customers of the failed Bahamas-based exchange in front of a bankruptcy judge in Delaware who’ll determine if they’re entitled to their funds ahead of other creditors.

But FTX is not the only test for crypto custody. Last month, a US bankruptcy judge ordered the insolvent Celsius Network LLC to return the roughly $50 million that had never earned any interest. However, the fate of billions of dollars of users’ funds stuck in interest-bearing accounts is still in question: Does the money belong to the debtor’s estate or the customers?

This anxiety-inducing uncertainty should ease with more crypto investments moving to normal bourses as regular securities, no different from stocks and bonds. That will bring customer assets under the umbrella of standard safeguards, precluding the need for costly legal maneuverings to recover one’s money. For instance, the newly launched CSOP Bitcoin Futures ETF will entrust custody of customer funds to HSBC Holdings Plc’s licensed Hong Kong trust company that, as Bloomberg Intelligence notes, undergoes regular bank examinations and audits.

This is what fund managers have been waiting for. Adults getting into the crypto playpen will bring grown-up rules with them. Nobody knows if any of today’s digital assets will amount to anything more than vehicles for speculation. But tokens of the future might represent meaningful economic value. On that premise alone, it may be worthwhile to create a safe and secure setup now for capital to flow toward them.

The Hong Kong crypto ETF is just one of several recent examples of the financial industry trying to provide protection in a legal vacuum. Bank of New York Mellon Corp., the custodian of $43 trillion in customer assets, recently opened its vaults to receive some institutional clients’ cryptocurrencies. BlackRock Inc. has also entered the fray by adding crypto to its Aladdin platform, used by pension funds and other large investors to oversee their portfolios. Fidelity Investments, the brokerage unit of the asset management behemoth, has been offering custody services to hedge funds since 2018. It’s now launching a zero-commission Bitcoin and Ether trading service for retail clients.

Olivier Fines, the London-based head of advocacy for Europe, Middle East and Africa at CFA Institute, cautions against reading too much into private, industry-level efforts. “The de facto insurance offered by a BNY Mellon, a Fidelity or an HSBC is very much a product of their size and scale; it’s not something smaller institutions can easily replicate. For there to be a competitive market in custodial services for crypto, new laws must fill the existing legal holes,” Fines said.

One such gap is in the US Securities and Exchange Commission’s Customer Protection Rule. Under it, broker-dealers are required to segregate customers’ cash and securities from their own. This is an important assurance to clients parting with their money. They would be loath to stand in line alongside general creditors to recoup pennies on the dollar in the event of the bankruptcy of an intermediary.

But is an exchange token — such as FTX’s cryptocurrency FTT or Binance’s BNB — a security or a utility? In its complaint against FTX co-founder Gary Wang and former Alameda Research Chief Executive Officer Caroline Ellison, the SEC is claiming that FTT is a security. So far though, “custodial protections, like other investor protections for digital assets, remain largely untested in court,” Fines and his Washington-based colleague Stephen Deane wrote in a new report that summarizes the investment management industry’s current views on putting crypto on their menu.

“Revolutionary or not, technology alone cannot offer protection from age-old financial misdeeds, ranging from market manipulation and front-running to fraudulent disclosures and Ponzi schemes,” says the CFA Institute report. “The crypto ecosystem urgently needs a strong, clearly defined regulatory framework.”

For too long, the focus of crypto supervision has been on preventing money-laundering. Customer protection wasn’t the priority. Now the pendulum is beginning to swing, though, perhaps a bit too much in the other direction. In March, the SEC came up with new accounting guidance for financial companies that have an obligation to safeguard customers’ crypto assets: They need to explicitly record a liability and a matching asset. But this requirement may backfire if it’s perceived to be too onerous. A bloated balance sheet will push up banks’ capital requirements, making them reluctant to offer custodial services to clients.

This regulatory tug of war will ultimately settle down, hopefully with investors feeling better protected than now and intermediaries not shying away from the field. The techno-anarchist founders of trustless blockchains won’t be pleased that the same large middlemen they wanted to banish are trying to hijack their creation. But with some luck, future historians of the industry would conclude that crypto’s worst vulnerabilities crawled out of the woodwork in 2022. After that, things progressively got better. Digital assets continued to remain unsuitable for the majority of risk-averse small investors, but at least they became a safer bet for those who didn’t mind the volatility.

Silvergate Capital shares plunge nearly 50% amid crypto-related negativity

By: Benson Toti
on Jan 5, 2023

Silvergate shares fell sharply after report investor deposits fell $8 billion after FTX collapse.

The crypto-friendly bank is also cutting its workforce by 40% amid crypto market downturn.

The company's shares fell nearly 50%, dropping to lows of $11.52 on Thursday.

Silvergate Capital Corp (NYSE: SI) shares dropped sharply on Thursday, with intraday declines as of midday more than 47% to see the crypto-focused bank’s stock trade around $11.52.
Silvergate shares fall as investors withdraw $8 billion in deposits

Losses for crypto-friendly bank’s shares followed the company’s fourth-quarter report before markets opened. Per the update, Silvergate customers, most probably concerned by the shocking collapse of crypto exchange FTX, moved to make massive withdrawals. In total, investor deposits fell from $11.9 billion to $3.8 billion. Crypto-related deposits fell more than $8.1 billlion during the quarter.

The company also recorded a huge decline in average customer deposits across board, which dropped by $4.7 billion to $7.3 billion.

Silvergate to cut workforce by 40%

Shares were also down as Silvergate management announced plans to cut its workforce.

According to the bank’s announcement, the move to lay off 40% of the workforce – about 200 employees – are part of the measures being taken to reduce costs as the broader crypto industry continues to battle with the effects of the brutal 2022 bear market.

According to Silvergate CEO Alan Lane, the measures taken have been in response to the crypto market’s outlook and events as the year drew to a close. He noted in a statement:

“In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset related deposits.”

The reaction in the market saw the company’s shares plummet more than 47%, with prices moving from around $22 to the aforementioned lows of $11.52.

Silvergate shares have declined more than 69% since FTX’s implosion. Indeed, with broader crypto sentiment down, the crypto-friendly bank’s stock has dipped even further after US prosecutors announced they had seized FTX-related bank accounts at Silvergate.

Want to Succeed on Wall Street? Learn Poker, Not Economics

Analysis by Aaron Brown | Bloomberg

January 4, 2023 

Perhaps the most famous trading experiment ever conducted was when commodities investor Richard Dennis bet his partner William Eckhardt in 1983 that he could train a group of amateurs – dubbed “the Turtles” -- to be successful futures traders. The bet was to be settled by giving the Turtles real money to trade. In the end, the Turtles compiled an impressive record, handing Dennis the win.

Although the experiment settled the issue in popular imagination, it lacked the transparency, controls and statistical rigor demanded by academics. So ever since, researchers have strived to understand trading success through various studies – efforts that have not escaped notice of firms that are in the business of trading financial assets.

The latest entry in this quest comes from the Federal Reserve Bank of New York in conjunction with researchers at the University of Southern California and University College London. For a paper titled “Strategic Sophistication and Trading Profits: An Experiment with Professional Traders,” the authors recruited 56 professional traders, plus an equal-size sample of students for controls, and evaluated their performance in a computer-simulated trading game. They then tested their subjects on a wide range of specific skills to see which skills were correlated to trading success.

The main finding was that among students the only useful predictor of trading success was general intelligence. Among professional traders, though, neither intelligence nor other personality traits and cognitive skills mattered much. Success did not depend on any fundamental insight about value. 

What mattered was strategic sophistication in the sense of taking analysis of other people’s behavior to high levels.

This calls to mind the folk wisdom found in poker, which is that “beginners think about their cards.

 With a little experience, they start thinking of the other guy’s cards. Poker begins when you think about what the other guy thinks about your cards.” The Fed paper suggests that professional traders are playing poker, while the students are playing games like chess, backgammon or blackjack that depend on intelligence rather than guessing what other people are thinking.

Most people will file this away as a mildly interesting factoid. It’s not surprising in that we know professional trading organizations use poker and other strategic games — such as Wall Street firm Jane Street’s Figgie -- to select and train traders. 

But the paper’s finding goes well beyond the claim that strategy is valuable for trading. It suggests that other things such as intelligence, risk strategies, personality traits or knowledge of fundamental value do not matter — or at least are so evenly distributed among traders that they can’t be used to predict success

Moreover, the paper, and many previous ones in this area, contradict the result of the Turtle experiment which suggests trading success is a matter of following certain rules, not anything in the trader’s personality or mind. Conventional Wall Street wisdom is that there are prerequisite mental traits for successful trading, but there are many variants, not a single strategic skill. 

Poker players sometimes make good traders, but not always. And chess players, backgammon and all other expert game players can succeed in different ways. Plus, whatever raw talent a person has, success is thought to require extended apprenticeship. In contrast, the Fed paper did not find any advantage to years of education or experience or other indicators of trading.

Who should you believe? The Turtle experiment and Wall Street folk wisdom have one great advantage, in that they are based on real people trading large amounts of money in real financial markets.

 Unfortunately, that makes controlled experimentation prohibitively expensive. Formal studies and other academic work conducted under laboratory conditions make the results much more scientific, but at the cost of being one layer removed from reality. The Fed study uses a particularly sophisticated trading simulation, but it’s still a simulation with relatively small-dollar stakes.

If you are not a trader but want to be one, either for your own account or for an institution, the study suggests you should play poker rather than attending class and take game theory courses over economics. Conventional wisdom says you should develop your comparative advantages, whatever they are, and study successful traders. If your interest is to understand the economic function of trading, the study suggests it is a game that rewards aggregating information from other’s bids and offers and using that information to provide liquidity.

 Conventional wisdom suggests trading is a broader skill that combines fundamental and technical information to produce an equilibrium, with many different types of traders performing different functions.

Of course, this is only one study that will not tip the balance in any direction. And its results only suggest, not prove, broader implications. Still, if you like poker more than class, and game theory more than economics, it’s good news. You may lose in trading competitions with fellow students, but you have a bright future on Wall Street. On the other hand, if you’re counting on traders to assess fundamental economic value, the study is bad news. It suggests they’re focused on outsmarting each other, not on investigating reality.

Whatever you think about the study and possible implications, it’s always good to see a careful, controlled, rigorous analysis in an area where opinions tend to be much stronger than the foundations for those opinions. Hopefully it will cause some deeper thinking about trading — both how to do it better and what its role in the economy is — from people of all opinions.

More from Bloomberg Opinion:

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Aaron Brown is a former managing director and head of financial market research at AQR Capital Management. He is author of “The Poker Face of Wall Street.” He may have a stake in the areas he writes about.

More stories like this are available on bloomberg.com/opinion

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