Monday, November 14, 2022

WORKERS CAPITAL

Canada Pension Plan Investment Board sees net assets grow by $6B

Canada Pension Plan Investment Board saw its net assets grow to $529 billion in its second quarter, compared with $523 billion at the end of the previous quarter.

Net assets grew by $6 billion compared with the previous quarter, consisting of $1 billion in net income and $5 billion in net transfers from the Canada Pension Plan (CPP).

CPPIB says its fund, which includes the combination of the base CPP and additional CPP accounts, returned 0.2 per cent for the quarter, outperforming leading global indices and up from a loss of 4.2 per cent last quarter.

For the six-month period ending Sept. 30, the fund saw negative net returns of four per cent.

CPPIB president and CEO John Graham says the portfolio remains resilient despite inflation, increasing interest rates, and the war in Ukraine.

The fund saw five-year and 10-year net returns of 9.5 per cent and 10.1 per cent, respectively.

NO MORE AUSTERITY

Ontario slashes deficit projection 35% on higher tax revenue

Esteban Duarte, Bloomberg News

The Bay Street financial district is shown with the Canadian flag in Toronto on Friday, August 5, 2022. ,

THE CANADIAN PRESS/Nathan Denette

Canada’s largest province says its fiscal deficit will be much smaller than it expected just over six months ago, as inflation provides a boost to individual and corporate tax revenue.

Ontario’s budget shortfall is now expected to be $12.9 billion in the fiscal year ending March 31, 2023, compared to $19.9 billion projected in the April budget, the government said in its fall economic update.

Total revenue is expected to reach $186.8 billion, up from $179.8 billion previously expected, while the forecast for total expenses is little changed at $198.8 billion. The government had already projected a rising trajectory for expenses, including health and education.

Those costs will help push the world’s largest sub-sovereign debt issuer back into a pattern of yearly deficits, despite the tax windfall. Ontario surprised markets with its first surplus in 14 years in fiscal 2021-2022.

The report highlighted several revisions to its economic outlook since the April budget. While nominal GDP growth is expected to be faster in 2022, it will slow in 2023 and 2024. Job creation is expected to be strong this year but that pace will check in 2023 and 2024. Inflation will stay high from this year into 2024, and home sales are expected to remain weak next year.

Ontario now sees nominal gross domestic product growth of 9.2 per cent this year, 2.5 percentage points higher than it expected in April. Salaries are forecast to rise 8.9 per cent, up from 5.6 per cent previously while companies’ operating earnings are expected to grow 4.8 per cent. The province doesn’t see significant changes to programs or financial expenses for the current fiscal year, despite speculation that labor negotiations will lead to robust salary increases.

The province is reducing its long-term borrowing program for current fiscal year by $9.3 billion to $32.2 billion, of which $13.6 billion has still to be raised. The annual borrowing rate is now expected to be 4.2 per cent, up from 3.4 per cent previously projected.

CANADA

Unions say turnover rate high for new security officers as busy holiday season looms

Rosa Saba, The Canadian Press

Unions representing airport security screeners say turnover for new employees is high despite efforts to hire more workers, with as few as one in three recent hires still on the job in some regions.

Major delays and flight cancellations at airports across Canada earlier this year drew scrutiny from passengers and politicians alike. Among other measures to ease the chaos, the government promised to ramp up hiring of security screeners — and did so, with more than 2,000 new screeners hired since April.

Now the pressure is on for airports to have a smooth holiday season, but high turnover and widespread bargaining between security screeners and their employers could throw another wrench into operations.

David Lipton with the United Steelworkers union, which represents about 2,000 airport security screeners at 41 airports, said only about a third of the screeners hired in the past few months have stayed on, with the rest either quitting, leaving during the training period or not showing up to training. Other unions reported similar turnover levels for recent new hires.

For example, Lipton said the Ottawa airport needs between 350 and 380 workers to be adequately staffed, though security employer GardaWorld disputed this, saying their target is below 350. Right now, Ottawa has around 270, up from around 200 earlier this year, Lipton said.

Security screeners at Canadian airports work for third-party contractors hired by the Canadian Air Transport Security Authority (CATSA). There are three main contractors providing screeners at airports across Canada: Allied Universal, Securitas and GardaWorld.

CATSA said the average reported attrition rate for security officers during the quarter ended Sept. 30 was 12.2 per cent. Spokesperson Suzanne Perseo said the agency is ready for the upcoming holiday season.

Both GardaWorld and Allied Universal both said they are well staffed, with GardaWorld increasing hiring for the holiday, while Securitas declined to comment, citing ongoing bargaining.

Almost all of the security screeners covered by USW are currently in bargaining with their employers, said Lipton. Among them are the Quebec and Atlantic Canada screeners, who recently rejected an offer from Securitas, and workers at the Ottawa airport who are bargaining with GardaWorld, he said.

Lipton said inflation has made current wages for security screening less attractive, making it harder to retain workers.

“In the times of high inflation, the workers require more of a raise just to make ends meet,” he said.

But he said working conditions are also driving people away as with fewer workers, the shifts are longer and more stressful.

Keith Aiken with the International Association of Machinists and Aerospace Workers (IAMAW), which represents thousands of security screeners in B.C. and Ontario, including the ones at Toronto’s Pearson Airport, didn’t give specifics but said the turnover rate for security screeners is “very high.” He attributed turnover at Pearson to scheduling and working conditions.

“Our pre-board screeners are highly monitored in a stressful environment and this causes new workers to not want to do the job,” said Aiken in an emailed statement.

The office of the transport minister acknowledged that like other sectors, CATSA is currently facing higher levels of staff turnover.

But spokeswoman Nadine Ramadan said CATSA has achieved pre-pandemic staffing levels at major airports and is entering the holiday season with lower wait times. For example, she said at Pearson, CATSA is 25 per cent above pre-pandemic staffing levels, including turnover.

But the new hires who stay are facing backlogs in the CATSA-provided training process, said IAMAW’s Aiken.

Aiken said that means many new hires can only do certain tasks, and not full screening duties.

CATSA's Perseo said the screening authority modified its training earlier this year to "accelerate screening officer readiness while prioritizing security effectiveness."

That means some new recruits are performing non-screening functions in the queues to optimize staffing. She also said CATSA has added more trainers.

COVID-19 has changed the reality for workers, said Catherine Cosgrove of Teamsters Canada, which represents around 1,000 GardaWorld screening workers across the country, including in Winnipeg and Edmonton.

“Turnover right now is widespread,” she said of the screening industry, agreeing that around a third of new hires from the past few months are still on the job.

Screeners at the Edmonton airport signed a deal in September with a 12 per cent wage increase over two and a half years after voting for strike action in July.

But despite those gains, Cosgrove said she thinks worker retention is going to be a persistent problem in the industry.

If bargaining goes south heading into the holiday season, USW screeners may not be able to strike, noted Lipton — the unions are awaiting a decision from the Canada Industrial Relations Board to determine whether they have a right to strike depending on how much of their job is considered essential.

USW is calling on the government to increase funding for CATSA’s screeners, as they say the employers are citing funding restrictions in their third-party contracts as a reason for not being able to offer better deals at the bargaining table.

CATSA did not comment on its funding but said it's confident the contractors can work with the unions to reach agreements, while the transport minister’s office said the government has not cut or decreased funding for CATSA staffing.

But Lipton said more is needed.

“I think that a major issue here is that CATSA needs to adequately fund screening operations so that the screening contractors can pay proper wages to these people and stabilize the workforce,” Lipton said.

Majority of Canadians want pay transparency laws: Survey

Daniel Johnson , BNN Bloomberg

Most Canadians would support a pay transparency law that would require businesses to disclose salary ranges on job postings, according to a survey conducted by Talent.com and Leger.

A survey released Nov. 3, found 84 per cent of respondents conveyed support for pay transparency laws on job postings.

The survey also found that participants believed pay transparency would help close the gender pay gap (61 per cent) and increase pay equity for racial minorities (57 per cent).

“Very broadly, job seekers want it [pay transparency laws],” Robert Boersma, vice president of operations for North America at Talent.com., said in an phone interview Thursday.

“Typically when these laws are adopted and salary transparency is adopted by employers, they can actually expect fewer applications, but more qualified applications.”

PAY TRANSPARENCY IN CANADA

Pay transparency laws have recently gained some traction in Canada.

In June, Prince Edward Island added a new section to the Employment Standards Act that said employers must include compensation figures in all public job postings.

In Ontario, a Pay Transparency Act was introduced in 2018 but was subsequently shelved.

Boersma said pay transparency support typically ranges between 77 and 86 per cent in different provinces.

“I think we'll see more momentum behind these types of laws coming into place,” said Boersma.

DISCUSSING COMPENSATION

The survey found over half of respondents (54 per cent) felt comfortable discussing their compensation with family members.

However, fewer individuals indicated they would feel comfortable discussing pay with friends (38 per cent) and even less when talking to colleagues (32 per cent).

Younger Canadians from ages 18 to 35 were more likely in general to feel comfortable talking about their salary.

“It's becoming less of a taboo topic with the younger generation because [of] their style of work and the way that they look at their work and their life are a little bit more blended,” Boersma said.

“So they [younger Canadians] really see less risk in having those conversations,” Boersma said.

Canadians are split on how they feel about their compensation, with 45 per cent of individuals indicating they are receiving a fair salary and another 43 per cent saying they are not.

The survey also found around a quarter of working Canadians (24 per cent) said they are considering leaving their current position within a year.

Methodology:

The survey was conducted between Oct. 28-30 and collected online responses from 1,534 Canadians over the age of 18.

Bezos makes charity pledge as Amazon is said to plan job cuts

Sophie Alexander, Bloomberg News

Jeff Bezos said he plans to give away the bulk of his fortune during his lifetime in an interview that aired just hours before reports that Amazon.com Inc. plans to cut about 10,000 jobs.

Bezos, the e-commerce giant’s founder and the world’s fourth-richest person, will focus the bulk of his philanthropy on fighting climate change and supporting those who seek to unify people, the billionaire told CNN. It’s the first time he has committed to such a pledge.

Bezos, who’s worth $123.9 billion, according to the Bloomberg Billionaires Index, said in the interview that he’s also anticipating a recession and that his advice to small businesses is to hunker down and cut expenses.

“The economy does not look great right now,” he said, sitting alongside his partner Lauren Sanchez. “Things are slowing down. You’re seeing lay offs in many many sectors of the economy.”

Amazon’s own job cuts will primarily hit employees in corporate and technology positions and could start as early as this week, the New York Times reported Monday, citing people familiar with the matter that it didn’t identify. It would be the largest number of staff cuts in the company’s history.

This isn’t the first time Bezos has timed a big philanthropic announcement around a period of controversy. Last year, he sandwiched his 11-minute trip to the edge of space, which attracted criticism over his priorities, with news of hundreds of millions of dollars in gifts, including $200 million to the Smithsonian National Air and Space Museum.

Bezos, 58, has focused more attention on his philanthropy in recent years as he’s also assumed a much larger public role, acquiring the Washington Post newspaper in 2013 as well as luxury homes in New York, Los Angeles and Hawaii. A $500 million yacht he commissioned is under construction in the Netherlands, and he’s among those interested in bidding for the NFL’s Washington Commanders, possibly with music mogul Jay-Z as an investor.

For years Bezos largely stayed on the philanthropy sidelines and drew criticism for not signing the Giving Pledge, a promise by many of the world’s richest people to donate the majority of their wealth to charitable causes. Instead he focused on Amazon and funded Blue Origin, his for-profit space-exploration company.

CLIMATE CHANGE

But Bezos has increased the pace of his giving after stepping down as Amazon’s chief executive officer last year. He set his attention on climate change with his $10 billion Earth Fund, which also aims to help restore nature and transform food systems. Bezos has said he plans to distribute the $10 billion by 2030.

On Saturday, Bezos named Dolly Parton the latest recipient of his Courage and Civility award, handing the music legend $100 million to direct to any charities she chooses. He previously awarded similar amounts to chef Jose Andres, whose World Central Kitchen feeds people in disaster-stricken areas, and Van Jones, the founder of Dream.Org.

His ex-wife MacKenzie Scott has sent more than $14 billion to nonprofits since the two split in 2019, mostly focusing on smaller charities in the U.S. that are often overlooked by larger donors. In a blog post just hours after Bezos’s CNN interview aired, Scott -- who signed the Giving Pledge -- said she donated almost $2 billion to charities over the past seven months.

Amazon, Meta join ranks of tech companies

slashing thousands of jobs

Lindsey Rupp, Bloomberg News

Tech companies are trimming staff and slowing hiring as they face higher interest rates and sluggish consumer spending in the U.S. and a strong dollar abroad.

The tech industry shed 9,587 jobs in October, the highest monthly total since November 2020, according to Challenger, Gray & Christmas Inc., a consulting firm that tallies job cuts announced or confirmed by companies across telecom, electronics, hardware manufacturing and software development.

In recent earnings reports, Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and others fell short of projections, sending shares plunging and shaving hundreds of billions of dollars from their market valuations. Meta, for instance, has lost more than 67 per cent of its value so far this year.

Here’s a running list of who’s cutting jobs and pulling back on hiring.

Amazon

The e-commerce titan plans to cut about 10,000 jobs. The layoffs will likely target Amazon’s devices group, responsible for the Echo smart speakers and Alexa digital assistant, as well as the retail divisions and human resources, Bloomberg News reported.

In November, Amazon halted “new incremental” hiring across its corporate workforce.

Apple

The iPhone maker has paused hiring for many jobs outside of research and development, an escalation of its plan to reduce budgets heading into next year, according to people with knowledge of the matter. The break generally doesn’t apply to teams working on future devices and long-term initiatives, but it affects some corporate functions and standard hardware and software engineering roles.

Chime

The digital-banking startup Chime Financial Inc. is cutting 12 per cent of its staff, or 160 people. A spokesperson said the company remains well-capitalized and the move will position it for “sustained success.”

Dapper Labs

Dapper Labs Inc. founder and Chief Executive Officer Roham Gharegozlou said in a letter to employees that the company had laid off 22 per cent of its staff. He cited macroeconomic conditions and operational challenges stemming from the company’s rapid growth. Dapper Labs created the NBA Top Shot marketplace for nonfungible tokens, a digital asset class that has seen a steep drop in demand since the crypto market downturn.

Digital Currency Group

Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month that saw about 10 employees exit the company. As part of the shake-up, Mark Murphy was promoted to president from chief operating officer.

Galaxy Digital

Galaxy Digital Holdings Ltd., the crypto financial services firm founded by billionaire Michael Novogratz, is considering eliminating as much as 20 per cent of its workforce. The plan may still be changed and the final number could be in a range of 15 per cent to 20 per cent, according to people familiar with the matter. Galaxy’s shares have plummeted more than 80 per cent this year, part of a rout for cryptocurrencies.

Intel

Intel Corp. is cutting jobs and slowing spending on new plants in an effort to save US$3 billion next year, the chipmaker said. The hope is to save as much as US$10 billion by 2025, a plan that went over well with investors, who sent the shares up more than 10 per cent on Oct. 28. Bloomberg News reported earlier that the headcount reduction could number in the thousands.

Lyft

Lyft Inc.’s cost-saving efforts include divesting its vehicle service business. It’s eliminating 13 per cent of staff, or about 683 people. The company had already said it would freeze hiring in the US until at least next year. It’s now facing even stiffer headwinds.

“We are not immune to the realities of inflation and a slowing economy,” co-founders John Zimmer and Logan Green said in a memo. “We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that.”

Meta

The Facebook parent is cutting 11,000 jobs, the first major round of layoffs in the social-media company’s history. Meta’s stock has plunged this year, and the company is trying to pare costs following several quarters of disappointing earnings and a slide in revenue. The reductions equal about 13 per cent of the workforce, and Meta will extend its hiring freeze through the first quarter.

“I want to take accountability for these decisions and for how we got here,” CEO Mark Zuckerberg said in the statement. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

Opendoor

Opendoor Technologies Inc. said that it’s laying off about 550 employees — roughly 18 per cent of its headcount. The company, which practices a data-driven spin on home-flipping called iBuying, is coping with slowing housing demand because of higher mortgage rates.

Peloton

Peloton Interactive Inc. laid off 500 employees globally, or about 12 per cent of the workforce, in October. It was the fourth time this year the company has cut staff. Along with other expense reduction measures, Peloton said the move will help it reach the break-even point on cash flow by the end of fiscal 2023.

“I know many of you will feel angry, frustrated and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are,” CEO Barry McCarthy said in an October memo. “Our goal is to control our own destiny and assure the future viability of the business.”

Qualcomm

Qualcomm Inc. said that it’s frozen hiring in response to a faster-than-feared decline in demand for phones, which use its chips. It now expects smartphone shipments to decline in the double-digit percent range this year, worse than the outlook it gave earlier.

Salesforce

Salesforce Inc. is focusing on margins as demand for its software products slow. The company has cut hundreds of workers from sales teams as it looks to improve profitability. Since 2017, Salesforce had almost tripled its workforce.

Seagate

Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said that it’s paring about 3,000 jobs. Computer suppliers, including Seagate and Intel, have been hard hit by a slowdown in hardware spending. Customers are sitting on a pile of extra inventory, hurting orders and weighing on Seagate’s financial performance, CEO Dave Mosley said. That necessitated cuts. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” he said.

Stripe

Payments company Stripe Inc., one of the world’s most valuable startups, is cutting more than 1,000 jobs. The 14 per cent staff reduction will return its headcount to almost 7,000 — its total in February. Co-founders Patrick and John Collison told staff that they need to trim expenses more broadly as they prepare for “leaner times.”

Twitter

The upheaval at Twitter has more to do with its recent buyout — and the accompanying debt — than economic concerns. But the company has suffered some of the deepest cuts of its peers right now. Elon Musk, who bought Twitter for US$44 billion, eliminated about 3,700 jobs by email. Musk also reversed the company’s work-from-anywhere policy, asking remaining employees to report to offices.

“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over US$4M/day,” Musk tweeted on Nov. 4.

Upstart

Upstart Holdings Inc., an online lending platform, said in a regulatory filing it cut 140 hourly employees “given the challenging economy and reduction in the volume of loans on our platform.”

Asia and the Pacific Islands: Pandemic’s disproportionate impact on transgender people should be “wake-up call” to governments

©Photo by Biplov Bhuyan/Hindustan Times via Getty Images

November 14, 2022

The dire state of transgender people’s rights to healthcare, housing, and employment in Asia and the Pacific Islands worsened at the height of the Covid-19 pandemic, Amnesty International said today. The organization is calling for governments in the region – and world over – to ensure lessons are learned so transgender people are not left behind in future health emergencies and natural disasters.

In a report, Pandemic or not, we have the right to live, Amnesty International documented discrimination, violence and marginalization of transgender people in 15 countries – Bangladesh, India, Indonesia, Japan, Mainland China, Malaysia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga and Viet Nam. It reveals that transgender people suffered disproportionately under restrictions to curb the spread of the virus, at the same time that they were excluded from receiving government assistance to help people cope with the impact of the pandemic.

The pandemic and governments’ responses to it have laid bare the many barriers that transgender and gender diverse people in Asia and the Pacific Islands must navigate every day to meet their basic needs.Nadia Rahman, Amnesty International’s Researcher and Policy Advisor on Gender

“The pandemic should be a wake-up call to governments to build more inclusive and sustainable economies and societies for trans and gender diverse people, especially in the face of future health and climate crises. The first step is to ensure individuals can easily and quickly change their legal name and gender on official ID documents, which is crucial to accessing their rights to essential services on an everyday basis.”

As lockdowns were introduced at the height of the pandemic, transgender people faced numerous challenges including a loss of income, food insecurity, safe housing, problems in accessing gender-affirming treatment, increased domestic violence and a notable absence of social protection support. These are all part of systemic issues states in the region need to address urgently, to comply with their human rights obligations.

‘No money and starving’

Discrimination and stigma mean that the overwhelming majority of transgender people in the region work in the informal sector without any job security, labour protections or welfare benefits. For example, in the Philippines, South Korea and Viet Nam, trans women told Amnesty International that performing at entertainment venues, working in the hospitality industry, engaging in sex work, and taking part in beauty pageants, were often the only ways they could earn a living.

In Bangladesh, India and Pakistan, many transgender women earn money performing ceremonial functions at weddings and births, engaging in sex work or begging on the streets. When lockdowns were imposed, many of them lost their only form of income.

A trans woman in Bangladesh told Amnesty International: “No mainstream companies hire us. We are seen as ‘cursed’ and ‘taboo’. There is no data from the government about trans people. NGOs and activists talked to about 1,500 trans women [during Covid-19] and they [mostly all] told us that they are living a very miserable life, have no money and are starving”.

Obstacles to accessing healthcare

Transgender people in Asia and the Pacific Islands reported that they are routinely subjected to disrespect, lack of privacy and confidentiality, and in many cases, outright refusal of care, when they seek medical assistance.

There is also a lack of health professionals trained in the specific health requirements of trans people, including the regulation of hormones and other gender-affirming treatment. As a result, many transgender people rely on the internet or clandestine market sellers for advice about medication and its side effects.

Accessing hormones was even harder for trans people during the pandemic, with many trans people claiming that interruptions to their gender-affirming treatment was causing them symptoms of anxiety and depression.

“The main difficulty transgender men have faced is getting hormone medicines. When their hormone stocks finished, they couldn’t go to the hospital to get medicines because of the curfews. At times they also couldn’t complete the process to get their gender officially recognized because clinics were closed, and surgeries got delayed,” a trans man in Sri Lanka told Amnesty International.

Humiliation and abuse directed at trans people

The report showed that most transgender people in Asia are unable to obtain legal ID documents that reflect their gender identity, which not only made it difficult for them to access relief packages and Covid-19 vaccines, but is a major barrier for them in their everyday lives.

“They said the virus was the great equalizer but in fact it – as well as the response to it – has greatly exacerbated existing inequalities. The systems that were already inaccessible became almost impossible to access for trans people,” one trans activist in the Philippines told Amnesty International.

The inability to produce an ID that reflected their gender expression also exposed transgender people to greater harassment, abuse and violence.

“Trans women were arrested for being out during the curfew. Most cisgender people just get fines but trans women are humiliated by the officers. There are even reports where trans women were asked to remove their wigs and/or clothes and provide their IDs. Law enforcement officers often go overboard with trans communities when they enforce these policies,” said a trans activist from the Philippines.

In addition to dealing with the Covid-19 crisis, trans people lived through what was termed their “deadliest year on record” with 375 trans and gender diverse people reported to have been killed globally between 1 October 2020 and 30 September 2021, including 44 people in Asia. Between 1 October 2021 and 30 September 2022, 327 deaths of trans and gender diverse people were recorded globally, with 40 in Asia. The actual figures for both years are likely to be much higher due to lack of adequate reporting at the national levels. This shocking violence is rooted in their longstanding marginalization, which is reflected in their lack of human rights.

“The culturally rich history of transgender and gender diverse people in many countries across the Asia Pacific, and indeed world over, has been overshadowed by structural discrimination, violence and stigma. Governments must not turn away from their suffering, but address the structural conditions and inequalities that shape trans people’s everyday lives, choices and opportunities, which, if left unchanged, will continue to make them particularly vulnerable to future crises,” Nadia Rahman said.

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Asia and the Pacific: “Pandemic or nor, we have the right to live”: The urgent need to address structural barriers undermining transgender people’s rights across Asia and the Pacific

November 14, 2022Index Number: ASA 01/6197/2022

The Covid-19 pandemic caused widespread, and often deeply damaging disruptions to the health, economic and social lives of millions of people across the world. But these impacts were not experienced equally. Transgender people – who were already subject to deep-rooted and persistent structural inequalities – found their pre-existing marginalisation exacerbated by the pandemic and related public health measures and suffered disproportionately. This report documents the experiences of transgender people in 15 countries in South, Southeast and East Asia, and the Pacific Islands during the Covid-19 pandemic.

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Japan's failure to produce Covid-19 vaccine highlights 'research shortcomings'

NOVEMBER 13, 2022
By JULIAN RYALL

A medical worker fills a syringe with a dose of the Pfizer-BioNTech

Covid-19 vaccine at Tokyo Medical Center on Feb 17, 2021.

In the early stages of the Covid-19 pandemic, Japan's pharmaceutical companies boasted that they would quickly find solutions – including the development of vaccines – to deal with the global health crisis.

Nearly three years on, however, those lofty ambitions have largely fallen flat.

Instead, medical industry insiders say the country's laggard status in this respect has served to highlight how it has fallen behind other developed nations in medical advances as well as a host of other areas of scientific research.

Some have expressed concerns that the lack of a home-grown vaccine – and the inability of local researchers to act fast enough to react to new pathogens – could prove costly as new variants emerge.

On Wednesday (Nov 9), the government reported 87,410 infections, an increase of more than 6,000 cases from the previous day, as well as 97 deaths.

The panel of experts set up at the outset of the health crisis to advise the government reported on Wednesday that an eighth wave has begun, with weekly cases up 40 per cent.

The peak of the seventh wave topped 260,000 daily cases in August, and experts suggest that figure is likely to be eclipsed.

The Ministry of Health announced that it is close to being able to deliver a Moderna vaccine specifically designed to counteract the BA.5 Omicron variant, complementing a similar drug produced by Pfizer and being rolled out in Japan. In total, the ministry will be able to deliver an estimated 102 million doses targeting Omicron.

Critics point out, however, that Japan should have been able to keep its promise to be the first to develop a vaccine and that does not bode well for a nation that has one of the most rapidly ageing populations in the world and will increasingly need to develop cutting-edge medicines and treatments to keep up with demand.

"There are several reasons why Japan failed to produce a drug, but I think the most basic issue is funding," said Yoko Tsukamoto, a professor at the Health Sciences University of Hokkaido.

"There is not enough financial support from the government for companies that are developing new medicines, and they cannot be expected to suddenly develop a drug when a crisis happens after being underfunded for years," she told This Week in Asia. "It doesn't work like that.

Fallout from crypto exchange FTX's collapse shows importance of regulation: Experts
Ian Bickis, The Canadian Press

The rapid collapse of crypto-exchange giant FTX shows the importance for the sector to be regulated, something that Canada has helped lead the way on, experts say.
Canada has numerous safeguards in place that would help prevent some of the alleged practices that went on at FTX, including the use of client funds for company trading, said Ryan Clements, chair in business law and regulation at the University of Calgary's Faculty of Law.
"We actually have in this country quite a robust regulatory framework that was created after Quadriga," said Clements, referring to the Canadian crypto exchange that collapsed in 2018, leading to $169 million in customer assets lost.
In an review compiled after Quadriga's downfall, the Ontario Securities Commission found its founder had committed fraud and the company operated like a Ponzi scheme.
"What happened at Quadriga was an old-fashioned fraud wrapped in modern technology," the OSC said in its 2020 report.
Clements said regulators rolled out changes after Quadriga's downfall, including rules around third parties holding crypto assets, the need for insurance and limits on what can be traded, all of which can benefit investors, said Clements.
"It's designed to provide both custodial and other prudential measures for crypto asset trading platforms, but also marketplace controls, also things like client cash segregation and conflict avoidance measures."
Canadian exchanges have been emphasizing their adherence to these measures in recent days as they try and distance themselves from the likes of FTX.
"Although some see regulation as overreaching, it plays a critical role in ensuring that these tragedies do not happen," said Coinsquare chief executive Martin Piszel in a statement.
"While we were working with regulators, building out regulatory technology and compliance infrastructure, our global competitors were launching products like 100x margin, unregulated derivatives products, and lending out client assets," he said, noting that Coinsquare is the first crypto trading platform registered through the Investment Industry Regulatory Organization of Canada.
"All of us have now seen the results of some of these experiments," Piszel said.
While Canadian efforts are ahead in some ways, regulators may need to put more effort into cracking down on access to international exchanges, said Clements, which provide riskier trades and less oversight.
"If you're a Canadian you should be using a registered trading platform. Because there are better controls for you. Right, the problem is these huge offshore platforms ... just because something bigger and just because something has celebrity endorsements doesn't necessarily mean it's safer."
The FTX issues show some clear flaws in the wider crypto sector, said Henry Kim, an associate professor at York University's Schulich School of Business and director of the school's Blockchain.Lab.
"It says there's not enough regulation. It says that it's too centralized. It says that it's basically we still don't have enough grown-ups in the room."
He advised that those in the crypto space should assess what their goals are, and if they're more of an investor where they'll buy and hold for the long term they should aim for the most established exchanges.
"If you're going to be an investor, then do your research and be at the most blue-chip exchanges."
The collapse of FTX, which was one of the world's crypto exchange before it fell apart, shows how difficult that research can be, and how much of a wider impact this development will have.
"There's a contagion effect because FTX was the gold standard, because they were heavily involved with investment," said Kim.
Several Canadian crypto companies have already announced some knock-on effects from FTX.
Calgary-based Bitvo Inc. announced in June that FTX was going to buy it for an undisclosed sum. On Monday, the company clarified that the transaction has not closed and it remains independent from the FTX group of companies.
The company also emphasized that it operates on a full reserve basis and in compliance with Canadian regulations.
For those who are losing faith in exchanges there is always the option of not holding cryptocurrency on an exchange, but Kim warns that with the risks of physical theft and lost passwords and other issues it's not to be taken casually either.
"For those that are really, really savvy, they can still hold crypto in their wallets, but you have to be pretty savvy. You have to know what you're doing. And I wouldn't advise that unless you do."

FTX fiasco sparks billions of dollars of outflows from exchanges

Sidhartha Shukla and Tanzeel Akhtar, Bloomberg News
The spectacular collapse of 30-year-old Sam Bankman-Fried's crypto empire has fueled a spike in outflows across global crypto exchanges. Users yanked a net $3.7 billion worth of Bitcoin and $2.5 billion of Ether in the week from Sunday, Nov. 6 to Sunday, Nov. 13, according to data provider CryptoQuant.
They withdrew more than $2 billion worth of many of the largest stablecoins over the same timeframe, according to CryptoQuant, which tracks data from most major exchanges.

The past week has “undoubtedly been one of the darkest in the history of cryptocurrency,” said Sasha Ivanov, founder of blockchain platform Waves, in a statement. “It's disheartening to see the value of this fundamental technology diminished due to the collapse of what many felt was a leading exchange.”
The fall of Bahamas-based FTX, which just recently was widely perceived as among the most dependable names in the sector, has sparked fresh concerns over the loosely-regulated nature of crypto companies and what guardrails are in place to safely oversee clients' assets. FTX is the latest in a long list of large crypto businesses to come undone this year, including hedge fund Three Arrows Capital, crypto lender Celsius Network and broker Voyager Digital.
The saga started on Sunday, Nov. 6 when a tweet from Binance's “CZ” cast doubt on the strength of Alameda Research, the trading firm affiliated with Bankman-Fried's exchange. The ensuing panic among FTX.com's investors became so intense that they collectively pulled $430 million worth of Bitcoin from the three-year-old exchange in just four days. The company had held more than 20,000 Bitcoin going into Nov. 6, CryptoQuant data shows. That sank to nearly zero by Wednesday, Nov. 9 as customers fled over worries about FTX's financial health.
Binance proposing a tentative takeover of the exchange and then backtracking on the offer during this time didn't help matters. On Thursday, Bankman-Fried tweeted that Alameda Research would be shuttered and by Friday, FTX Group had begun bankruptcy proceedings.
The leveling of another centralized crypto player in 2022 is emboldening calls for users to hold their own assets, rather than entrusting them to third-parties.
“This is the latest and biggest failure of a centralized entity in crypto and it could mark the bitter end of their existence,” stated Ivanov. “The foundation of cryptocurrency is decentralized blockchain technology and I expect this downturn to result in the industry switching focus back to those core values.”
Since last week, crypto exchanges like OKX, KuCoin, Poloniex and Huobi have vowed to increase transparency and share their so-called “proof of reserves.” Binance published a list of some of its wallets and holdings on Thursday.
Cryptocurrency prices erased losses on Monday morning in London after Binance Holdings Ltd.'s Chief Executive Changpeng Zhao said his exchange plans to set up an industry recovery fund. Trading has been extremely volatile since FTX's unraveling began, erasing $244 billion of value since last Sunday, CoinGecko data shows.

Sam Bankman-Fried’s downfall sends shockwaves through crypto

THE ASSOCIATED PRESS

November 14, 2022

Signage for the FTX Arena, where the Miami Heat basketball team plays, is visible on Nov. 12, 2022, in Miami. (AP Photo)

NEW YORK--Sam Bankman-Fried received numerous plaudits as he rapidly achieved superstar status as the head of cryptocurrency exchange FTX: the savior of crypto, the newest force in Democratic politics and potentially the world’s first trillionaire.

Now the comments about the 30-year-old Bankman-Fried aren’t so kind after FTX filed for bankruptcy protection Friday, leaving his investors and customers feeling duped and many others in the crypto world fearing the repercussions. Bankman-Fried himself could face civil or criminal charges.

“Sam what have you done?” tweeted Sean Ryan Evans, host of the cryptocurrency podcast Bankless, after the bankruptcy filing.

Under Bankman-Fried, FTX quickly grew to be the third-largest exchange by volume. The stunning collapse of this nascent empire has sent tsunami-like waves through the cryptocurrency industry, which has seen a fair share of volatility and turmoil this year, including a sharp decline in price for bitcoin and other digital assets. For some, the events are reminiscent of the domino-like failures of Wall Street firms during the 2008 financial crisis, particularly now that supposedly healthy firms like FTX are failing.

One venture capital fund wrote down investments in FTX worth over $200 million. The cryptocurrency lender BlockFi paused client withdrawals Friday after FTX sought bankruptcy protection. The Singapore-based exchange Crypto.com saw withdrawals increase this weekend for internal reasons but some of the action could be attributed to raw nerves from FTX.

Bankman-Fried and his company are under investigation by the Department of Justice and the Securities and Exchange Commission. The investigations likely center on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research, a violation of U.S. securities law.

“This is the direct result of a rogue actor breaking every single basic rule of fiscal responsibility,” said Patrick Hillman, chief strategy officer at Binance, FTX’s biggest competitor. Early last week Binance appeared ready to step in to bail out FTX but backed away after a review of FTX’s books.

The ultimate impact of FTX’s bankruptcy is uncertain, but its failure will likely result in the destruction of billions of dollars of wealth and even more skepticism for cryptocurrencies at a time when the industry could use a vote of confidence.

“I care because it’s retail investors who suffer the most, and because too many people still wrongly associate bitcoin with the scammy ‘crypto’ space,” said Cory Klippsten, CEO of Swan Bitcoin, who for months raised concerns about FTX’s business model. Klippsten is publicly enthusiastic about bitcoin but has long had deep skepticism about other parts of the crypto universe.

Bankman-Fried founded FTX in 2019, and it grew rapidly — it was recently valued at $32 billion. The son of Stanford University professors, who was known to play the video game “League of Legends” during meetings, Bankman-Fried attracted investments from the highest echelons of Silicon Valley.

Sequoia Capital, which invested in Apple, Cisco, Google, Airbnb and YouTube, described their meeting with Bankman-Fried as likely “talking to the world’s first trillionaire.” Several of Sequoia’s partners became enthusiastic about Bankman-Fried following a Zoom meeting in 2021. After several more meetings, Sequoia decided to invest in the company.

“I don’t know how I know, I just do. SBF is a winner,” wrote Adam Fisher, a business journalist who wrote a profile of Bankman-Fried for the firm, referring to Bankman-Fried by his popular online moniker. The article, published in late September, was removed from Sequoia’s website.

Sequoia has written down its $213 million in investments to zero. A pension fund in Ontario, Canada wrote down its investment to zero as well.

In a terse statement, the Ontario Teachers’ Pension Fund said, “Naturally, not all of the investments in this early-stage asset class perform to expectations.”

But up until last week, Bankman-Fried was seen as a white knight for the industry. Whenever the crypto industry had one of its crises, Bankman-Fried was the person likely to fly in with a rescue plan. When online trading platform Robinhood was in financial straits earlier this year--collateral damage from the decline in stock and crypto prices--Bankman-Fried jumped in to buy a stake in the company as a sign of support.

When Bankman-Fried bought up the assets of bankrupt crypto firm Voyager Digital for $1.4 billion this summer, it brought a sense of relief to Voyager account holders, whose assets has been frozen since its own failure. That rescue is now in question.

As king of crypto, his influence was starting to pour into political and popular culture. FTX bought prominent sports sponsorships with Formula Racing and bought the naming rights to an arena in Miami. He pledged to donate $1 billion toward Democrats this election cycle--his actual donations were in the tens of millions--and prominent politicians like Bill Clinton were invited to speak at FTX conferences. Football star Tom Brady invested in FTX.

Bankman-Fried had been the subject of some criticism before FTX collapsed. While he largely operated FTX out of U.S. jurisdiction from his headquarters in The Bahamas, Bankman-Fried was increasingly vocal about the need for more regulation of the cryptocurrency industry. Many supporters of crypto oppose government oversight. Now, FTX’s collapse may have helped make the case for stricter regulation.

One of those critics was Binance founder and CEO Changpeng Zhao. The feud between the two billionaires spilled out onto Twitter, where Zhao and Bankman-Fried collectively commanded millions of followers. Zhao helped kickstart the withdrawals that doomed FTX when he said Binance would sell its holdings in FTX’s crypto token FTT.

“What a s**t show ... and it’s going to be crypto’s fault (instead of one guys’s fault),” Zhao wrote on Twitter on Saturday.

FTX bankruptcy also endangers founder's philanthropic gifts

The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due to the donations and influence of FTX founder Sam Bankman-Fried in the “effective altruism” movement

THALIA BEATY and GLENN GAMBOA

Associated Press
November 14, 2022,

FILE - Signage for the FTX Arena, where the Miami Heat basketball team plays, is illuminated on Saturday, Nov. 12, 2022, in Miami. The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due...Show more
The Associated Press

NEW YORK -- The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due to the donations and influence of FTX founder Sam Bankman-Fried in the “effective altruism” movement.

The FTX Foundation -- and other related nonprofits mostly funded by Bankman-Fried and other top FTX executives – says it has donated $190 million to numerous causes. Earlier this year, the foundation’s Future Fund announced plans to donate an additional $100 million, with hopes of donating up to $1 billion in 2022. Because of the bankruptcy, that won't be happening now.

And donations to numerous nonprofits, even those that have already received money from groups related to Bankman-Fried, are now in doubt.

FTX, the hedge fund Alameda Research, and dozens of other affiliated companies sought bankruptcy protection in Delaware Friday after the exchange experienced the crypto equivalent of a bank run. Customers tried to remove billions of dollars from the exchange after becoming concerned about whether FTX had sufficient capital.

Bankman-Fried has resigned from the company. His net worth, estimated earlier this year at $24 billion, has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.

On Thursday night, FTX Future Fund’s leadership team resigned, warning grantees that they were unlikely to pay out promised funds.

“We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor,” the team wrote in a joint post in the Effective Altruism Forum. “We are so sorry that it has come to this.”

ProPublica, the investigative journalism nonprofit, said it has been told by Building a Stronger Future, a foundation funded by Bankman-Fried, that the remaining two-thirds of its $5 million grant to report on pandemic preparedness and biothreats is now on hold.

ProPublica received one-third of the grant in February and expected one-third annually until 2024. The nonprofit said Building a Stronger Future is assessing its finances and that it was talking to other funders about taking on some of its grant portfolio.

“Regardless of what happens with the remainder of the grant, we are deeply committed to this important work and the team we have assembled to pursue it,” the nonprofit said in a statement. “We will use other resources to make sure that work continues.”

Bankman-Fried, 30, is the best-known proponent of the “effective altruism” social movement which believes in prioritizing donations to projects that will have the largest impact on the most number of people. Dustin Moskovitz, co-founder of Facebook and current Asana CEO and co-founder, and his wife Cari Tuna, are also major funders and backers of the movement, which also emphasizes that the lives of all people should be weighted equally, regardless of where they live now or if they will inhabit the earth generations in the future.

“I wanted to get rich, not because I like money but because I wanted to give that money to charity,” Bankman-Fried told an interviewer in a YouTube video called “ The Most Generous Billionaire,” published in January last year.

His ability to promote himself and FTX gave the exchange a higher profile than larger companies. FTX purchase the naming rights to the Miami Heat's home arena last year, though Miami-Dade County decided Friday to terminate its relationship with the company and rename the arena. It purchased a buzzed-about ad during this year's Super Bowl.

Bankman-Fried did set up a philanthropic infrastructure through his exchange, FTX, which promised that 1% of its crypto exchange fees would be donated to charities. It also matched user donations made through its platform up to $10,000 a day. In total, the company said more than $24 million was donated through user fees, donations and its matching program before it suspended its services.

Some “effective altruism” proponents advance the idea that making a lot of money is ethical as long as your goal is ultimately to give it away — sometimes shortened to “earning to give.” Bankman-Fried believed in this, signing The Giving Pledge in June as a promise that he would give away the majority of his wealth.

However, some now blame Bankman-Fried's “effective altruism” mindset for FTX’s troubles.

“Either ('effective altruism') encouraged Sam’s unethical behavior, or provided a convenient rationalization for such actions,” tweeted Moskovitz, who has also signed The Giving Pledge. “Either is bad.”

William MacAskill, a philosophy professor at Oxford University and a co-founder of the “effective altruism” movement, condemned Bankman-Fried for allegedly misusing customer funds.

“Sam and FTX had a lot of goodwill,” MacAskill, who was also an unpaid advisor to the FTX Future Fund, wrote in a thread on Twitter. “And some of that goodwill was the result of association with ideas I have spent my career promoting. If that goodwill laundered fraud, I am ashamed.”

MacAskill’s book, “What We Owe The Future,” prompted a wave of media coverage of the “effective altruism” movement this summer.

Requests for comment were sent to the largest grantees listed on the FTX Future Fund’s website, including other “effective altruism” advocates like the Long-Term Future Fund and the Centre for Effective Altruism and Longview.

In an interview with The Associated Press in May, Nick Beckstead, the CEO of FTX Foundation until he resigned Thursday, said there were about five people working at the foundation and that they were still working out how the various philanthropic projects started by Bankman-Fried would be structured.

“It’s a bit shoestring,” he said.

The community grew out of the work of philosophers at Oxford, including MacAskill, and debates of the merits of approaches and proposals on forums reflect the high-flying thinking of its origins.

Beckstead acknowledged the community can be “strange and intense,” but also that its emphasis on quantifying impact helps decide where to direct donations. Beckstead did not immediately respond to a request for comment.

“What is the cost per life saved or what is the cost per quality adjusted life year from this kind of activity?,” he previously said were some of the questions he likes to try to answer, drawing on input from subject matter experts.

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Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy

Exclusive: An inside look at FTX's financials ahead of its bankruptcy filing

As FTX Trading Ltd. was filing for Chapter 11 bankruptcy in the U.S. on Friday, investors were still reviewing the company’s private financial documents.

Those reviews follow a frenzied week of discussions between the company’s founder – and now former chief executive officer – Sam Bankman-Fried and potential investors in an attempt to save the cryptocurrency exchange business.

“FTX is raising roughly $6-10 billion of liquidity this week. We are very open to structures here, and can be flexible,” one of the documents from an online data room reads.

FTX’s Chapter 11 filing said that approximately 130 affiliated companies have commenced voluntary proceedings. But the crisis has ensnared many others outside its immediate circle such as lender BlockFi, a troubled digital-asset lender once worth US$3 billion but which has now limited activity on its platform. The company paused client withdrawals late Thursday, citing “a lack of clarity” over the status of FTX US as well as the uncertainty afflicting FTX.com and sister trading house Alameda Research.

According to multiple sources who were in direct contact with Bankman-Fried in the past 24 hours, an inside look at FTX’s financial picture left them surprised, considering the once high flying cryptocurrency trading platform had been valued at US$25 billion last year.

“This data room was put together quickly,” said one source who had engaged with FTX in the past day. “There were some huge demands put on Sam. He is under extreme stress.”

Some of that can be seen in the documents, which were obtained by BNN Bloomberg through multiple sources.

“These are rough values, and could be slightly off,” one statement reads, in regards to the company’s balance sheet. “There is also obviously a chance of typos, etc,” the Microsoft Excel spreadsheet authored by Bankman-Fried goes on to say.

The Excel document also includes another mea culpa from Bankman-Fried following an itemized breakdown of FTX’s financial assets and cryptocurrency holdings that show the company has nearly US$9 billion in liabilities and about US$900 million in liquid assets on its balance sheet.

“There were many things I wish I could do differently than I did, but the largest are represented by these two things: the poorly labeled internal bank-related acount (sic), and the size of customer withdrawals during a run on the bank,” according to the document.

Nov 11, 2022

Despite FTX crisis, it's not the end for the crypto sector, says industry insider

The Canadian Press

It's been a wild week in the crypto market following the collapse of exchange platform FTX, but an industry insider says that while the situation is probably one of the most unfortunate events in the history of the asset class, it's not the end for the sector.

Crypto prices sank dramatically after rival exchange platform Binance pulled out of a deal to purchase FTX earlier this week, citing significant concerns around reports of mishandled funds and regulatory investigations.

And on Friday, FTX filed for bankruptcy and CEO Sam Bankman-Fried stepped down.

FTX was valued earlier this year at US$32 billion.

Brian Mosoff, chief executive at Ether Capital, a Toronto-based firm that provides investors access to the cryptocurrency ethereum, said even though retail investors are on edge due to uncertainty around the worth of crypto assets, those that understand the technology that underpins cryptocurrencies -- blockchain -- likely believe that the sector still has potential.

"I don't think that people are thinking that the space goes away. I do think investors recognize that the sector is here to stay," he said "What it looks like and who the players are, those are different questions."

This year hasn't been particularly great for the crypto market in general, with the price of bitcoin tumbling significantly after reaching an all-time high of over US$68,000 in November of last year.

The digital asset industry saw nearly US$2 trillion in market value wiped out in the first few months of the year -- a staggering US$300 billion during the week of May 9 alone.

Bitcoin was trading at US$16,790.40 on Friday afternoon. The cryptocurrency is down more than 19 per cent over the past five days.

Mosoff said this year will wash out "a lot of the scam and hype assets" that came about in 2020 and 2021.

He said investors will likely become more conservative in their exposure to the space, choosing to hold just a little bit of bitcoin and a little bit of ether, the two most common crypto assets.

Mosoff added that the events of this year will force other crypto trading platforms to be more transparent.

It's not just your individual investors who have put money into crypto; major funds have also been taking a chance on the space.

In a statement released Thursday, the Ontario Teachers' Pension Plan said it invested US$95 million into both FTX International and the U.S. entity.

Teachers' said any financial loss on its investment in FTX will have limited impact on the pension plan because the investment represents less than 0.05 per cent of its total net assets.

The FTX incident highlights why regulatory oversight of the crypto industry is critical and reinforces the importance of clear regulation, Mosoff explained.

"I think this will be a marker where it's time now for the U.S. and Canada to clarify a lot of the regulatory rules to allow the businesses that want to be more compliant and more transparent to act in a responsible way," he said.

"The question is, what is an appropriate framework for regulation? Who are the appropriate players and the right level of transparency? Do investors want to use these third-party siloed, you know, custodians or exchanges to facilitate all their activities? Or does the space go back a little bit more to its roots?"

FTX hurtles toward bankruptcy with US$8B

hole, U.S. probe

Gillian Tan, Bloomberg News

The crisis engulfing Sam Bankman-Fried’s FTX.com is rapidly worsening, with the onetime crypto wunderkind warning of bankruptcy if his firm can’t secure funds to cover a shortfall of as much as US$8 billion.

Bankman-Fried informed investors of the gap on Wednesday, shortly before rival exchange Binance abruptly scrapped a takeover offer. He said FTX.com needed $4 billion to remain solvent and is attempting to raise rescue financing in the form of debt, equity, or a combination of the two, according to a person with direct knowledge of the matter.

“I f---ed up,” Bankman-Fried told investors on the call, according to people with knowledge of the conversation. He said he would be “incredibly, unbelievably grateful” if investors could help.

An FTX representative declined to comment.

The acknowledgment of his firm’s deepening troubles and limited options is a stunning turn for Bankman-Fried, who was once worth $26 billion and likened to John Pierpont Morgan. It also underscores the uncertainty hanging over FTX, its clients and cryptocurrency markets.

U.S. authorities are investigating FTX, the vast bulk of Bankman-Fried’s wealth has evaporated and rivals are benefiting from his woes. Robinhood Markets Inc. has seen its biggest crypto inflows ever in the last two days, Chief Executive Officer Vlad Tenev said Thursday. Binance and Coinbase Global Inc. have also seen large inflows, data from CryptoQuant show.

Investor Sequoia Capital wrote down the full value of its holdings in FTX.com and FTX.us, an indication that the firm sees no clear path to recouping its investment.

BIG-NAME BACKERS

Hanging in the balance as the exchange teeters is not just the fate of its investors and lenders but anyone who has been unable to retrieve customer assets since it halted some withdrawals earlier in the week. The failure of crypto firms Celsius and Voyager saw billions in client money tied up in bankruptcy proceedings.

FTX has a prominent list of backers such as Sequoia Capital, BlackRock Inc., Tiger Global Management and SoftBank Group Corp.

Still, Bankman-Fried remained defiant during a hectic period of roughly 24 hours that included mounting speculation that Binance wouldn’t go through with the deal.

He repeatedly told investors during the conference call on Wednesday afternoon that it was simply not true that Changpeng Zhao was walking away from the takeover, the person said.

About an hour later, Binance said it was indeed backing out.

“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance, the crypto exchange founded by Zhao, said in a statement.

In addition to the financial strains, FTX is drawing attention from US authorities.

The Securities and Exchange Commission and the Commodity Futures Trading Commission are investigating whether the firm properly handled customer funds, as well as its relationship with other parts of Bankman-Fried’s crypto empire, including his trading house Alameda Research, Bloomberg News reported Wednesday. Officials from the Justice Department also are working with SEC attorneys, one of the people said.

Zhao said in a memo earlier on Wednesday that there was no “master plan” to take over FTX, and that “user confidence is severely shaken.”

The renewed concern about contagion risk is showing up in the plunging prices of digital assets. Bitcoin fell below $16,000, the lowest in two years, after Binance’s announcement.

Coinbase Chief Executive Officer Brian Armstrong said Tuesday in a Bloomberg TV interview that if the deal with Binance fell through, it would likely mean FTX customers would take losses.

“That’s a not a good thing for anybody,” he said.

SEE

https://plawiuk.blogspot.com/2022/11/criminal-capitalim-explainer-whats.html

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