PRISON NATION U$A

Senators want answers in wake of AP’s prison investigations






Federal correctional officers protest in response to an Associated Press investigation that exposed how the Bureau of Prisons repeatedly promoted an official who was accused of beating several Black inmates, in front of the Bureau of Prisons' regional office, Monday, Dec. 12, 2022, in Stockton, Calif. The picket comes as members of Congress, including the chairman of the Senate Judiciary Committee, are demanding answers from the agency's director after AP's reporting on deputy regional director Thomas Ray Hinkle. 

(AP Photo/Aaron Kehoe)More


MICHAEL R. SISAK and MICHAEL BALSAMO
Mon, December 12, 2022 

The chairman of the Senate Judiciary Committee said he plans to question the director of the federal Bureau of Prisons this week about an Associated Press investigation that found the agency has repeatedly promoted and continues to stand by a high-ranking official who beat Black inmates in the 1990s.

“I am very concerned about the allegations in this article and whether BOP will address abuses, prioritize safety, and improve their flawed approach to misconduct investigations,” Sen. Dick Durbin, D-Ill., tweeted in the wake of AP’s story chronicling Thomas Ray Hinkle’s rise to deputy western regional director.

At the same time, Durbin and a group of Senators are demanding answers from the Justice Department about the subject of another AP investigation — the federal prison system’s handling of rampant staff misconduct, including staff-on-inmate sexual abuse and whistleblower retaliation.

Durbin on Monday joined Sen. Chuck Grassley, R-Iowa, and Sens. Dianne Feinstein and Alex Padilla, both California Democrats, in sending a letter to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco seeking additional information and imploring the Justice Department to take immediate action to root out staff misconduct. Grassley is the Judiciary Committee's top Republican.

The Justice Department formed a working group in July to evaluate its handling of staff sexual abuse after the warden and several other workers at a federal women’s prison in Dublin, California, were arrested for sexually abusing inmates. An AP investigation revealed that the allegations stemmed from a toxic culture of abuse and coverups at the Bay Area lockup. The working group issued a report with its findings in November.

Bureau of Prisons Director Colette Peters is expected to face questions on both topics when she testifies Tuesday before the Senate’s Permanent Subcommittee on Investigations. The panel, chaired by Sen. Jon Ossoff, D-Ga., has been conducting its own investigation into sexual abuse of female inmates in federal prisons. Peters will meet with Durbin separately.

Prison workers and union officials, angered by the AP's investigation into Hinkle and the agency’s response defending him, picketed Monday outside a Bureau of Prisons Western Regional Office in Stockton, California. They called on the agency to fire Hinkle and his boss, Regional Director Melissa Rios.

Rep. Jackie Speier, D-Calif., echoed that sentiment. She reported a hostile encounter with Hinkle in February while on a site visit to investigate staff sexual abuse at the troubled federal women’s prison in Dublin.

“The details revealed here are deeply disturbing,” Speier said in a tweet linking to the AP article. “If only half of what is reported is true, Hinkle should be terminated immediately. I will be following up with BOP for answers.”

The AP’s story, published Friday, revealed how the Bureau of Prisons repeatedly promoted Hinkle despite numerous red flags, rewarding him again and again over a three-decade career while others who assaulted inmates lost their jobs and went to prison.

Hinkle, responding to questions from the AP, acknowledged he beat inmates but said he regrets that behavior and now speaks openly about it “to teach others how to avoid making the same mistakes.”

Peters, who started as Bureau of Prisons director in August, told the AP she believes Hinkle is a changed man and a model employee. At the same time, she said, she's committed to working with the Justice Department and Congress to root out staff misconduct.

“Mr. Hinkle has openly acknowledged his past mistakes, gone through the employee discipline program, sought professional help and reframed his experiences as learning opportunities for others,” Peters said. “Today, I am confident he has grown into an effective supervisor for our agency.”

Federal prisons employees and union officials protesting Monday outside the regional office where Hinkle works said they were troubled by what they see as a two-tiered system of justice in the Bureau of Prisons.

“I’m very mad. You’re supposed to hold everybody accountable. Nobody is above the law," Dublin union president Ed Canales said. “But apparently, he can change? What about officers and staff members that were wrongfully terminated on lesser charges? Or were actually terminated on the same charges? Can they be exonerated? Can they come back?”

___

Associated Press reporter Haven Daley in Stockton, California contributed to this report.

A Prison Warden Beat Black Inmates For Years. Instead Of Being Fired, He Was Promoted.

Candace McDuffie
Tue, December 13, 2022 


Federal correctional officers protest in response to an Associated Press investigation that exposed how the Bureau of Prisons repeatedly promoted Thomas Ray Hinkle who was accused of beating several Black inmates, in front of the Bureau of Prisons’ regional office, Monday, Dec. 12, 2022, in Stockton, Calif.

A new report by The Associated Press reveals disturbing information about Bureau of Prisons official Thomas Ray Hinkle. Despite having a violent past abusing Black inmates—stemming from allegations made in 1995—he has been promoted at least nine times. In June, he was selected by the Bureau of Prisons and Justice Department to become acting regional director.

“At least three inmates, all Black, have accused Hinkle of beating them while he was a correctional officer at a Florence, Colorado federal penitentiary in 1995 and 1996. The allegations were documented in court documents and formal complaints to prison officials. In recent years, colleagues say, Hinkle has talked about beating inmates while a member of a violent, racist gang of guards called ‘The Cowboys.’”

The piece about went into more detail about Hinkle’s deplorable behavior:

“One inmate said he felt terrified as Hinkle and another guard dragged him up a stairway and slammed him into walls. Another said Hinkle was among guards who threw him to a concrete floor, spat on him and used racist language toward him. A third said Hinkle slapped him and held him down while another guard sexually assaulted him.”

Even though a minimum of 11 guards affiliated with “The Cowboys” were charged with federal crimes, Hinkle wasn’t. The group beat dozens of inmates that were primarily Black. Ultimately, three were convicted and imprisoned. Four others were acquitted and an additional four pleaded guilty and said they would cooperate.

However, Hinkle was promoted twice before the criminal investigation was even over. He told AP: “With the support of my friends, family, and colleagues, and through professional help, I have made the most of my opportunity for a second chance to serve the Bureau of Prisons honorably over the past twelve years.”

Hinkle added: “I cannot speak to why some are dredging up history from so many years ago, but my distant past does not reflect who I am today. My story I share with my fellow staff has more to do with hope and change after getting help and not self-medicating with alcohol. We are all human and make mistakes. There is no shame in admitting our problems and seeking help.”

He also denied using racist language and recent allegations of misconduct (which includes silencing a whistleblower). The agency’s new director, Colette Peters, insists says the Bureau of Prisons stands by Hinkle’s leadership.

“[He] has openly acknowledged his past mistakes, gone through the employee discipline program, sought professional help and reframed his experiences as learning opportunities for others,” Peters stated. “Today, I am confident he has grown into an effective supervisor for our agency.”

Despite calls for Hinkle to be terminated immediately, Justice Department policy mandates that he must retire next May when he turns 57.

Prisons chief: Official who beat inmates deserves 2nd chance





Senate Federal PrisonsJustice Department Inspector General Michael Horowitz testifies during the hearing of Senate Homeland Security and Governmental Affairs Subcommittee on Investigations, on Sexual Abuse of Female Inmates in Federal Prisons, on Capitol Hill in Washington, Tuesday, Dec. 13, 2022. 

AP Photo/Jose Luis Magana

MICHAEL R. SISAK
Tue, December 13, 2022

WASHINGTON (AP) — The director of the federal Bureau of Prisons is defending her decision to rally behind a high-ranking agency official who climbed the ranks after beating Black inmates in the 1990s, saying Tuesday that she feels he's shown contrition and deserves a second chance.

Colette Peters, making her first comments since The Associated Press published an investigation chronicling Thomas Ray Hinkle’s sordid past and subsequent promotions, said she met with Hinkle soon after starting as director in August and came away convinced that he should keep his job.

"He openly shared some of his past and has shared with me that he’s a changed man, that he’s not the person he was 25 years ago, and that he wants to spend the remainder of his career helping people understand not to make those exact same mistakes,” Peters said.

“It’s that type of behavior change that we’re looking for in both those in our custody and who work for us. Some, they don't get a second chance. But he owned it.”


Peters spoke with the AP after testifying Tuesday before the Senate Permanent Subcommittee on Investigations, which has spent months scrutinizing the Bureau of Prisons' inability to clamp down on rampant staff sexual misconduct.

Subcommittee Chairman Jon Ossoff, D-Ga., said the eight-month, bipartisan investigation — after the arrests of a warden and other workers at a federal women’s prison in Dublin, California — shows that the agency is “failing systemically” in its duty to protect female inmates from the “cruel and unusual punishment” of abuse at the hands of correctional workers.

The Bureau of Prisons’ inability to detect and prevent staff-on-inmate assaults has led to dozens of assaults and left some accused workers free to offend again, the subcommittee found. The findings echo common complaints about the agency's handing of sexual abuse and other staff misconduct, some of which has been detailed in AP reporting.

Among the subcommittee's other findings: Audits meant to ensure compliance with a federal prison rape prevention law have proven inadequate; inmates who report abuse often face retaliation; and the agency's internal affairs office is facing a backlog of 8,000 cases, including hundreds of sex abuse allegations. Peters said she's added 40 workers to the internal affairs office to process cases faster.

At the Dublin prison, the rape-prevention audits were being supervised by the former warden, Ray Garcia, who was convicted last week of abusing three inmates. At a prison in Coleman, Florida, where six have been accused of sexually abusing inmates since 2012, officials shipped all the female inmates away two days before they were to be interviewed by auditors.

“This situation is intolerable," Ossoff said. “Sexual abuse of inmates is a gross abuse of human and constitutional rights and cannot be tolerated by the United States Congress.”

Tuesday's hearing began with disturbing testimony from three victims of staff-on-inmate sexual abuse — women who say the Bureau of Prisons compounded their suffering by ignoring warning signs, enabling coverups and failing to equip prisons with practical tools, like functioning security cameras.

Carolyn Richardson recounted how a correctional officer at a federal lockup in New York City preyed on her visual impairment, sexually assaulting her after he brought her to medical appointments. Briane Moore, crying at times, said the prison captain who abused her had threatened to put her in solitary confinement or transfer her to another prison if she reported him.

Linda De La Rosa said the Bureau of Prisons “entirely failed” in allowing the correctional officer who attacked her and three other women in 2019 at the Federal Medical Center in Lexington, Kentucky, to continue working despite previous allegations of sexual abuse. The officer, Christopher Goodwin, pleaded guilty in March and is serving 11 years in prison.

“The problem is the old boys club,” De La Rosa said. “Prison staff, managers, investigators, correctional officers — they all work together for years, if not decades. No one wants to rock the boat, let alone listen to female inmates. There is no objective, independent oversight.”

The AP does not typically identify people who say they are victims of sexual assault unless they grant permission, as Richardson, Moore and De La Rosa have done. All sexual activity between a prison worker and an inmate is illegal. Correctional employees enjoy substantial power over inmates, controlling every aspect of their lives from mealtime to lights out, and there is no scenario in which an inmate can give consent.

Peters, who testified alongside Justice Department Inspector General Michael Horowitz, has vowed to change the culture that has enabled officers to sexually assault inmates. She reiterated the Bureau of Prisons' zero-tolerance policy for staff sexual misconduct and said she's urged transparency throughout the agency, so that she's not kept in the dark on any incidents that occur.

A Justice Department working group issued recommendations last month for curbing staff sexual misconduct. Among them: starting an anonymous abuse reporting process, overhauling investigations, seeking longer prison sentences for workers convicted of abuse and potentially granting early release to victimized inmates.

Peters, who visited Dublin early in her tenure, said the crisis there shows some prisons have been infected with a “culture of abuse and a culture of misconduct" and that “when it’s high-level officials engaging in these egregious criminal acts there’s clearly a culture” of abuse.

“That culture needs to be reset in order to ensure the safety and security of those in our care and custody,” Peters testified. “And I think we do have systemic changes in the works that will help us reset that culture there and throughout the federal Bureau of Prisons.”

As for Hinkle, Peters will face more questions about him this week when she meets with Senate Judiciary Committee Chairman Dick Durbin. The Illinois Democrat tweeted that he was “very concerned about the allegations” in the AP's article about Hinkle "and whether BOP will address abuses, prioritize safety, and improve their flawed approach to misconduct investigations.”

On Monday, prison workers and union officials picketed outside the agency's regional office in Stockton, California, and called on Peters to fire Hinkle and his boss, Regional Director Melissa Rios.

__

On Twitter, follow Michael Sisak at http://twitter.com/mikesisak and send confidential tips by visiting https://www.ap.org/tips/

THE ORACLE OF SHANGHAI
A Warren Buffett-backed Tesla competitor is making a dent in Elon Musk's EV empire

Tim Levin
Wed, December 14, 2022

BYD EV car store in Shanghai, China, in 2021.Robert Way/iStock Editorial/Getty Images Plus

China's BYD is quickly gaining on Tesla, the world leader in electric car sales.


It's already sold twice as many EVs this year as it did in 2021.


BYD, backed by Warren Buffett's Berkshire Hathaway, is planning two new premium brands.

Tesla has long dominated global sales of electric cars. But a Chinese newcomer is quickly gaining on Elon Musk's empire.

BYD started selling gasoline cars back in 2003 before expanding into hybrids and all-electric vehicles. This year, it kicked combustion-engine cars to the curb and has grown its EV business at an explosive pace. Pretty soon, it could sell more all-electric cars than anyone else.

In 2021, the Warren Buffett-backed carmaker shipped some 320,000 pure electric vehicles (not including the plug-in hybrid vehicles that still make up much of BYD's sales). This year, it's furiously accelerated output: In the first 11 months of 2022, it's more than doubled last year's numbers, shipping out roughly 800,000 EVs.

It hasn't quite caught up yet: Tesla notched 908,573 deliveries worldwide through September (it releases numbers quarterly) and is on track for an annual record of its own. Plus, Tesla's profit margin per vehicle dwarfs BYD's.

BYD's epic rise comes amid signs that Tesla is losing steam in China, the world's biggest market for electric cars. In October, Tesla discounted its cars in China. This week, Bloomberg reported that Tesla is slowing production at its Shanghai factory, potentially signaling decreased demand for its vehicles. (Tesla disputes the report.)

Some industry watchers like Michael Dunne, founder of the EV industry consultancy ZoZoGo, think BYD is primed to become the EV sales leader and dethrone Tesla. But comparing them is a bit like comparing apples to oranges, he says.

"It's like asking, 'will Toyota surpass Mercedes in overall sales?' Yeah, because Toyota has a full spectrum of vehicles that go from $20,000 to $80,000," Dunne told Insider. "And the lower the price point, the bigger the market of course."

BYD has a few advantages that will propel it to market dominance by 2025, according to Dunne: While Tesla is solidly a luxury brand — its cars go for around $50,000 and up — BYD sells vehicles under multiple brands and at several price points. The automaker is also one of the world's leading battery manufacturers.

BYD has been in business since 1995. And in addition to cars, it makes electric buses, trucks, and forklifts.

And the Chinese firm is expanding into Tesla's turf in more ways than one. In November, the company announced plans to launch two new high-end brands. This is part of an effort to shed its identity as a maker of affordable cars and become a more aspirational brand in China, Dunne said.

It's also expanding its reach far beyond its home country. BYD recently started selling cars in Europe, and it's targeting Mexico and Japan in 2023.

Warren Buffett's Berkshire Trims Stake In BYD EV Company To Below 15%

Anusuya Lahiri
Tue, December 13, 2022


Berkshire Hathaway sold 1.33 million Hong Kong-listed shares of electric vehicle maker BYD Co, Ltd (OTC: BYDDF) (OTC: BYDDY) for HK$267.69 million ($34.43 million).

The divestment reduced Warren Buffett-owned investment company's holdings in BYD's total issued H-shares to 14.95% on December 8, down from 15.07%, Reuters reports.

As of November 17, Berkshire sold about 3.23 million Hong Kong-listed shares of the Tesla Inc (NASDAQ: TSLA) rival for HK $630.33 million ($80.7 million), trimming its stake from 16.28% to 15.99%.

Also Read: Warren Buffett-Backed BYD More Than Doubles Production, Deliveries In Nov Despite COVID-19 Challenges

In December, BYD forged a 500 million ringgit ($113 million) tie-up with Sime Darby Motors Sdn Bhd as it made its electric vehicle debut in Malaysia.

BYD's growing list of export destinations now stretches from North to Southeast Asia, Australia, and Europe to Latin America.

BYD's foreign markets included Brazil, Chile, Germany, Israel, Japan, and India.

Price Action: BYDDF shares traded lower by 1.88% at $27.08 in the premarket on the last check Tuesday.

See more from Benzinga

Warren Buffett Backed BYD Forays Malaysia With $113M Deal

House Democrats introduce legislation to bar Trump from office under 14th Amendment


Jared Gans
Thu, December 15, 2022 

A group of 40 House Democrats, led by Rep. David Cicilline (R.I.), introduced legislation on Thursday to bar former President Trump from holding future federal office under the 14th Amendment.

Section 3 of the amendment states that no one who previously took an oath to support the Constitution and engaged in “insurrection or rebellion” shall “hold any office, civil or military, under the United States.”

Cicilline said in a release announcing the legislation that Trump “very clearly” engaged in an insurrection on Jan. 6, 2021, with the intention of overturning the results of the 2020 presidential election.

“You don’t get to lead a government you tried to destroy,” he said.

The release states that the bill includes testimony and evidence demonstrating how Trump engaged in the insurrection.

The bill also specifically describes how Trump helped encourage the violence on Jan. 6, tried to intimidate state and federal officials when they did not support his false claims of the election being stolen and refused to denounce the mob that stormed the Capitol for hours during the riot.

“The 14th Amendment makes clear that based on his past behavior, Donald Trump is disqualified from ever holding federal office again and, under Section 5, Congress has the power to pass legislation to implement this prohibition,” Cicilline said.

Cicilline, who served as an impeachment manager during Trump’s first impeachment, sent a letter to his Democratic colleagues last month to solicit co-sponsors for a bill to bar Trump from office.

Trump was impeached on a charge of “incitement of insurrection” in the aftermath of Jan. 6, but he was acquitted by the Senate. This was the second time Trump was impeached, with the first coming in December 2019.

Last month, Trump became the first major candidate to announce a run for the presidency in 2024.

The 14th Amendment was ratified in the aftermath of the Civil War, when ex-Confederates and seceded states rejoined the Union.

Women Led the Largest Protests in China in Decades

Dr. Leta Hong Fincher

HARPERS BAZZAR
Wed, December 14, 2022 

NOEL CELIS - Getty Images

Outside a student cafeteria at the elite Tsinghua University, alma mater of China’s ruler Xi Jinping, a lone woman silently held up a blank sheet of paper, a symbol of censorship in what many are now calling the “white paper revolution.” Plainclothes agents tried to convince her to move, but she stood her ground as more young women joined her until a large crowd had gathered.

“If I let fear of punishment keep me from speaking out … as a student of Tsinghua University, I would regret it for the rest of my life,” the woman said with emotion, as hundreds of students cheered her on. A few miles from Tiananmen Square, at Beijing’s Liangma canal, a young woman read a speech from her cell phone about the need to remember those killed by the government’s draconian, “zero-COVID” policies: “Remember Dr. Li Wenliang [a doctor in China who warned about the coronavirus in late 2019] who was reprimanded, only to die of pneumonia. … Remember the desperate cries of fire in Urumqi. … There are too many tragedies that need to be remembered. Reject the official ‘correct’ version of memory. Don’t be ‘the people,’ be yourself!” The crowd chanted back, “Don’t be ‘the people,’ be yourself!”

As China’s largest protests against the Communist Party since 1989 have spread from one city to another, a striking number of young women have appeared on the front lines, whether standing alone to hold up a sheet of white paper, leading the crowd in chants, or confronting police officers who dragged them into waiting vans. The spark for this extraordinary wave of political protests was a November 24 fire in a predominantly Uyghur neighborhood of Urumqi, the capital of Xinjiang, which killed at least 10 people, potentially dozens, including children. Many commented on social media that the residents were barricaded in their apartments because of the strict COVID lockdown, preventing firefighters from reaching them.



But this time, instead of confining their reactions to online comments subject to heavy censorship, residents in at least 39 cities in China (according to the Australian Strategic Policy Institute) took to the streets to voice their anger—with some protesters even chanting for Xi Jinping to step down. One powerful video came from a young woman in the eastern province Zhejiang. Black duct tape covered her mouth in a symbol of enforced silence, and chains draped around her torso and arms as she marched slowly forward, clutching a blank sheet of paper, her brows furrowed in determination while surrounded by bemused onlookers.

Her chains evoked the horrifying case of a woman named Xiaohuamei(“plum blossom”), who was found chained by her neck in February in Xuzhou, where she was reportedly the victim of trafficking. Xiaohuamei became the topic of viral discussions about widespread violence against women in China. In June, yet another brutal act of videotaped violence against women went viral, this attack in a restaurant in Tangshan, where a man approached a group of women having dinner. One woman said, “Go away,” after he touched her, then he bashed her in the head and recruited his friends to viciously attack the other women with bottles and chairs.

While all of China’s citizens have suffered under almost three years of “zero-COVID” policies, women have borne the brunt of a likely severe increase in domestic violence due to months long lockdowns, where residents are imprisoned in their homes, often together with their abusers. Women’s rights lawyer Li Ying said that a new domestic violence helpline app she launched in August received calls from around 13,000 people—the vast majority of whom were women—within the first five days of the app’s launch, according to Reuters. That figure contrasted with only 600 people who called the regular telephone helpline run by her Beijing-based Yuanzhong Family and Community Development Service Center in all of 2021, Li told Zhengmian Lianjie, a media outlet on WeChat.

Some of the haunting protest images of women derive from the Chinese practice of feminist “performance art,” which caught on in 2012, when around a hundred young feminists regularly staged direct action in cities across China to denounce rising gender inequality. In Beijing that year, several feminists paraded down a main street wearing white wedding gowns stained with theatrical red blood, carrying signs with slogans like, Love Is No Excuse for Violence, to protest the country’s epidemic of domestic violence. Feminists carried out imaginative acts of performance art in public areas such as shaving their heads bald to protest gender discrimination in university admissions or occupying men’s public toilets to demand gender parity in public lavatories. Then on the eve of International Women’s Day in 2015, authorities jailed five women for planning to hand out stickers about sexual harassment on subways and buses. The women, who became known as the Feminist Five, were released after international outcry, but the government has since carried out a brutal anti-feminist crackdown, censoring feminist content online and persecuting feminist activists. In 2018, authorities bannedthe most prominent feminist media platform, Feminist Voices, while its founding editor-in-chief, Lü Pin, is now pursuing a Ph.D. at Rutgers University and remains involved in diaspora feminist activities.

Under Xi Jinping, China’s strongman authoritarianism has worsened, particularly since he and the Communist Party Congress did away with presidential term limits and anointed Xi the country’s paramount ruler for a third term and potentially for life. For the first time in 25 years, not a single woman was appointed to the new Communist Party Politburo. And there has never been a woman on the Politburo’s elite Standing Committee. Why? I believe China’s all-male rulers have decided that the systematic subjugation of women is essential to Communist Party survival, turning their backs on the early Communist emphasis on gender equality, which was enshrined in the country’s constitution.

For 15 years, the Chinese government has pushed young women into traditional roles as dutiful wives, mothers, and baby breeders in the home. Women are expected to marry men to preserve stability (same-sex marriage is not legalized), provide an outlet for men’s violent urges, and perform unpaid care work at home. Faced with plummeting birth rates after more than three decades of the draconian “one-child” policy, Beijing adopted a new policy in 2021 of exhorting Han women to have three children. Meanwhile, the government has discouraged Uyghur women from having more children—sometimes through coercive measures such as forced sterilization. The Uyghur Human Rights Project found that the government has used both incentives and force to push Uyghur women into marrying Han men in order to promote “ethnic unity” and social stability.

China passed an anti-domestic violence law in 2015, but I believe the law will never be properly enforced, because keeping the patriarchal family structure intact—even when the woman’s life is in danger—is key to the Chinese Communist Party’s strategy for surviving beyond the Soviet Union’s seven-decade run. Accordingly, violence against women is a necessary feature of China’s patriarchal authoritarianism, as long as the violence is contained within the privacy of the home. As long as the government continues allowing men to abuse women in the home with impunity, men are more likely to acquiesce to a one-party dictatorship.

Police have now been deployed throughout multiple Chinese cities where protests took place, and authorities are aggressively questioning those who have participated. But the events of recent weeks have shown that a critical mass of young women across China are fed up with Xi’s patriarchal authoritarianism. Many have already chosen to renounce marriage and children in a private act of resistance. Others have decided that—consequences be damned—they must rise up publicly against the Communist Party’s oppression.

'They Took My Phone and Asked for My Passwords.' Detained Zero-COVID Protesters in China Share Their Stories

Eva Rammeloo/Shanghai
Wed, December 14, 2022 

CHINA-HEALTH-VIRUS-PROTEST-POLICE
A man is arrested while people gathering on a street in Shanghai on November 27, 2022, where protests against China's zero-Covid policy took place the night before following a deadly fire in Urumqi, the capital of the Xinjiang region. 

Credit - Hector Retamal—AFP via Getty Images

Just a few days after the zero-COVID protests began in Shanghai, Xia, 17, went to see her friends’ performance of their theater school play in early December. It was a routine production except for a small but significant change. In one scene, one of the characters throws his hands up, flinging a stack of white papers into the air in a moment of desperation. But on this particular evening, there were no blank sheets of papers.

The blank sheet of paper has become the main protest symbol in China as a representation of everything demonstrators want to say but cannot. The absence of the paper during the play is a sign of the fear that now permeates the XuHui neighborhood where the theater is located, and where protesters gathered just days before to vent their frustration about the ongoing and draconian COVID-19 policies. “Of course we all understand the decisions the director made—even though they are ridiculous. He doesn’t want to get into trouble,” says Xia, who had helped organize the performance.

Protests broke out in cities across China toward the end of November amid growing anger at President Xi Jinping’s strict zero-COVID approach. A fire on Nov. 24 at an apartment block that took the lives of at least 10 people in Urumqi, the capital of the northwestern Xinjiang region, was the apparent catalyst—with social media users saying that strict COVID measures had delayed the emergency response. (The local government denies this.) In Shanghai, China’s financial and commercial capital, a candle-lit vigil began on Nov. 26 on Wulumuqi Street for those who died in the autonomous Muslim-majority region and turned into heated protests. Hundreds of people gathered, many holding up blank sheets of paper, while chanting: “No PCR tests, we want freedom!” Police intervened on the second day to disperse the protesters, beating and arresting many.

Read more: Why a Blank Sheet of Paper Became a Protest Symbol in China

It is not known exactly how many people were arrested. But protesters who were released tell TIME stories of their ordeal. “They pushed me against a police car, pulled me down on the street, and hurt my head,” says Chun, 27, who was rounded up with dozens of other protesters during and following the demonstration. He adds that they were strapped to chairs with their wrists and ankles tied, and that cigarette butts and bottles were thrown at them. In a Nov. 29 statement, the government said it would “resolutely crack down” on “activities by hostile forces.”

Chun says that officers demanded they strip naked and police taunted them with humiliating remarks. “When someone mentioned basic human rights, the police took it as a joke,” adds Jin, 21, who was also arrested following the vigil. Both say that most who were detained alongside them were held for over 24 hours in rooms that were too small to lay down in. The lights were also left on all night, making it impossible to sleep, Chun and Jin say.

“The officers took my phone and asked for my passwords. They said it’s the normal procedure for everyone who gets arrested. But that’s ridiculous,” says Chun, who says he refused. He was arrested for “picking a fight during the vigil,” an accusation he says is false and one that is commonly leveled by the government. Prior to the protests, Chun adds, he posted critical messages about the Chinese Community Party on his WeChat page and refused the regular COVID-19 tests at his workplace. “It cost me my job a few times,” he says. Now, he is unemployed.

Another young man who took part in the vigil was taken away by police and says that they tried to track down protesters, even in the days afterwards. “My friend was arrested. I don’t understand how they know he was involved in the protests. But the police had access to his entire WeChat history,” he says, via an encrypted messaging app. (He declined to reveal his name, citing concerns over his safety.)

Weeks after the initial protests in Shanghai and other cities, information is continuing to spread and leading to further demonstrations, due in part to the use of encrypted apps and virtual private networks (VPNs). Xing, a university student in a small city in the southwest of the country, shares information to TIME via a messaging app. Ten days after the protests erupted in Shanghai, 300 students at his university gathered on campus to demonstrate. A few positive COVID-19 cases were detected and they were afraid of being locked in their dormitories again.

“The government’s policy is such a mess and so hard to predict,” he says. “We are afraid that we might not get home for the Lunar New Year [at the end of January].” The students know about the other protests, and it has spurred them on. “Our protest isn’t related directly to what happened in Shanghai,” says Xing, “but I guess the spirit and courage are passed on by people there.”

While residents in Shanghai appear too afraid—at least for now—to take to the streets again, there is a sense that the recent protests have created a turning point from which there is no going back. Protests in China generally are rare and localized to a specific issue but the oppressive zero-COVID policy impacts everyone, says Wu Qiang, a political analyst based in Beijing. “The protests happened nationwide, and almost all classes joined in,” he says.

The protests have been described widely as the most important since the 1989 student-led demonstrations, and subsequent crackdown, in Tiananmen Square in Beijing. However, “those were limited to abstract democratic values,” explains Wu. “This time, it’s about specific freedoms. It’s about specific aspects of human rights. Dignity is what the middle-class cares about most now.”

The Chinese government at first seemed unwilling to admit that anything was going on, as if ignoring the protests would cause them to peter out. That approach began to shift following a Nov. 28 Twitter post by influential commentator and former Chinese state-run media editor Hu Xijin, which acknowledged the protests but said that “China will not become chaotic or out of control.”

“Political stability is always Xi’s priority,” says Chen Daoying, a political scientist at the Shanghai University of Political Science and Law. He says that the zero-COVID policy is so connected to the CCP leadership that it has hit home in Beijing. “Do not underestimate the determination of the CCP to prevent color revolutions. Xi Jinping has always emphasized that danger,” Chen adds.

Read More: What the Protests Tell Us About China’s Future

At the same time, Xi has begun to dismantle his zero-COVID policy such as QR codes and health tracking apps, meaning people can travel more freely and do not need to provide a negative test before entering businesses or public transport. China also announced the end of controversial government-run quarantine facilities, allowing those with mild symptoms to quarantine at home instead. These concessions were made to appease, says Jean-Pierre Cabestan, a Hong Kong-based political scientist. “Pressure was too high. The party couldn’t isolate it. The pressure of the people accelerated the policy shift,” he adds. “There were many factors, but in the end, the street has spoken.”

Although Xi has loosened his zero-COVID policy, it has lasted for so long that it’s caused problems that aren’t easily solved. Local governments are struggling financially due to the expenses of quarantine centers and mass daily COVID-19 testing. Nationally, the economic outlook is grim, with an estimated 2.8% GDP growth this year—far below the 5.5% the government had previously predicted. Meanwhile, one out of every five young Chinese person is unemployed.

For now, given all the security measures, it is not likely that blank sheets of paper will be seen so openly on the streets. Sitting in her family’s living room in early December, Xia resolutely shakes her head when asked if she would go and protest on the street if they happen again. “Much too dangerous,” she says.

Editor’s note: Names were changed due to safety concerns.

Pakistan to approach UN after blaming India for bombing


CHOGM 2022 in Kigali


Wed, December 14, 2022 
By Asif Shahzad

ISLAMABAD (Reuters) - Pakistan will take a dossier to the United Nations alleging its neighbour India has backed incidents of terrorism, the foreign ministry said on Wednesday, a day after Islamabad said India was behind a high-profile bombing.

Minister of State for Foreign Affairs Hina Rabbani Khar said the dossier will include detailed evidence and information of India's involvement in a 2021 bombing outside the house of an Islamist leader, among other incidents of sabotage and what she called terrorism.

"We will call it information based evidence," Rabbani Khar said about the dossier. "It is sharing information and sharing evidence on what India has been up to."

"Let's put the record straight, that's what it is, and ... to let the world know that what is happening in the region."

India's foreign office did not immediately respond to a Reuters request for comment about the dossier. Rabbani Khar did not say when the dossier was to be presented to the U.N., or to which U.N. body

Pakistan on Tuesday accused India of backing and funding the 2021 bombing outside the house of Hafiz Saeed, the founder of the Islamist militant Lashkar-e-Taiba group blamed for the 2008 Mumbai attacks, which killed 166 people, including foreigners.

New Delhi has not responded to Tuesday's allegations.

India says Saeed was the mastermind of the Mumbai carnage, a charge he has denied.

Khar said the facilitators and mastermind of the bombing that killed four people in eastern city of Lahore were based in India.

"We would want India to hand them over, and as responsible nations do... and if India is a responsible nation, they will cooperate," she said.

Arch-rivals Pakistan and India have fought three wars since 1947, when British colonial ended and the two independent nations were created in a blood-drenched process known as partition.

They blame each other for sponsoring and backing attacks inside their countries, a charge both the nations deny.

(Reporting by Asif Shahzad in Islamabad; Additional Reporting by Shilpa Jamkhandikar in Mumbai; Edting by Frank Jack Daniel)

END OF THE PETRO$
China's looking to reorder global oil trade by transacting with Saudi Arabia in yuan. The move could dampen the dollar's dominance.

Phil Rosen
Tue, December 13, 2022 

Now let's talk China and oil.

1. President Xi Jinping is pushing to buy oil using yuan, a move that threatens to rattle global energy trade and hit at the long-standing dominance of the US dollar.

At a summit with Arab leaders on Friday, Xi said China will continue to import large volumes of energy supplies from Gulf states, and settle payments using its own currency.

"The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for RMB settlement in oil and gas trade," Xi said, according to a transcript of his speech published by the state-run China Daily.

While the president didn't specify when the change would go into effect, and whether Gulf nations will take up the proposal, it's been reported that Saudi Arabia — the world's top oil exporter — has already been in talks for months to trade oil in yuan with China.

As things stand, roughly 80% of global oil sales are done in dollars, and Saudi Arabia has inked deals exclusively in the greenback since 1974.

Should a Saudi-yuan deal crystallize, it would bolster China's currency at the expense of the dollar, as well as reinforce Beijing's status as a critical player in global financial markets.

But it's hard to talk about China's role in oil markets without nodding to their extensive zero-COVID policies, which have crimped global oil demand since 2020.

Currently, the international benchmark for crude is hovering around $77 a barrel, but a fully re-opened China could push prices above $100 a barrel next year, according to UBS.

Easing pandemic measures in China combined with a Europe's ban on Russian oil imports, which came into effect last week, will stoke demand and stifle supply — meaning prices will go up.

"Chinese oil demand has been bottled up for three years now, and China has a huge multiplier effect on the region," Energy Aspects' analyst Amrita Sen said Monday.

"China reopening will be very very bullish for oil markets," she added. "Now, again, not expecting that to be overnight, but over the course of next year, this is going to be probably the single biggest driver of oil prices."

Transgender lawmaker hopes her presence brings understanding


Zooey Zephyr, right, attends a legislative training session at the state Capitol in Helena, Mont., on Nov. 16, 2022. Zephyr, who is one of the first two transgender candidates elected to the Montana Legislature, says she hopes her presence will help fellow lawmakers better understand the trans community and lead them to avoid proposing legislation that can legitimize violence against the transgender community.

 (Thom Bridge/Independent Record via AP) (ASSOCIATED PRESS)Less

AMY BETH HANSON
Tue, December 13, 2022 

HELENA, Mont. (AP) — Zooey Zephyr worked behind the scenes during Montana’s 2021 legislative session to oppose an ultimately unsuccessful effort to ban transgender minors from receiving gender-affirming health care, including puberty blockers, cross-sex hormones and surgery.

When the 2023 session starts next month, she'll face a similar challenge after a Republican lawmaker recently revealed he'll run the proposal again. The move comes as GOP lawmakers nationwide are expected to continue to push for limits on transgender rights.

This time, though, Zephyr will have a seat at the table. And a vote.

Zephyr and SJ Howell are the first two openly transgender people to be elected to the Montana Legislature. They are among a record 10 transgender lawmakers who will be serving next year in state legislatures in Colorado, Delaware, Minnesota, New Hampshire, Vermont and Virginia, according to the LGBTQ Victory Fund. The first openly transgender lawmaker in the United States took office in 2018.

It’s part of a larger movement in which LGBTQ people are being elected in record numbers. At least 519 LGBTQ candidates won elective office this year, in positions ranging from school board up to Congress and governor, according to the Victory Fund. In California, 10% of the legislature identifies as LGBTQ.

“My hope is that by being present there ... that people will begin to understand what it means to be trans, what it means to be a trans adult and what it is we hope for for trans children," Zephyr said. "That they get to live their life, that they don't have to hide the way I had to hide, the way other trans adults from past generations had to bury themselves."

Zephyr and Howell are both Democratic members of the House Judiciary Committee, which could eventually hear a bill by Sen.-elect John Fuller, in which he again seeks to ban health care providers from treating transgender minors with puberty blockers, hormones or gender-affirming surgery.

Fuller’s proposed bill for the session that starts Jan. 2 is still being drafted in an effort “to make it unassailable,” he said.

Fuller introduced two bills in 2021 seeking to block medical providers from offering gender-affirming care to minors, but both failed.

He also sponsored a bill to prevent transgender women from competing on female sports teams. That measure was signed by Republican Gov. Greg Gianforte, but a judge overturned the law as it applied to college students and it's not believed to have affected any high school students, said Brian Michelotti, the executive director of the Montana High School Association.

Fuller said he’s bringing forward the medical care legislation again because “we know a lot more about the consequences of those things and we have a lot more information than we had two years ago." Lawmakers, he said, want to protect children from the debilitating effects of “a lifetime medical dependency.”

He declined to cite any studies, but said he had a pile of them on his desk.

It's not clear how the legislation might fare. While Republicans gained four seats in the Legislature and have a supermajority, not all Republicans supported the bills during the 2021 session. Fuller's first effort failed narrowly in the House and his second bill passed the House before being killed in the Senate.

Opponents of the proposal also have more research backing their arguments that gender-affirming medical care saves the lives of children suffering from gender dysphoria — the sense of unease that a person might have because their biological sex does not match their gender identity.

The World Professional Association for Transgender Health said this year that it believed treatment could begin earlier than previously recommended, with some patients beginning hormone therapy as young as age 14 and some surgical procedures starting as young as 15 and 17.

Transgender rights and medical treatment for transgender minors are highly charged issues around the country, leading to threats and violence.

The Montana bill comes as Arkansas, Alabama and Arizona have all passed legislation to ban gender-affirming medical care for minors. The Arkansas and Alabama laws have been subject to legal challenges.

A Texas judge has temporarily blocked a law that would have allowed the state to investigate parents for child abuse if their minor children received transgender medical care.

Fuller rejects the idea that his legislation means he hates the LGBTQ community. Instead, in a letter to the editor of the Daily Inter Lake, he said his proposal is meant “to protect children from being spayed, neutered and mutilated.”

Zephyr said legislation like Fuller’s, whether intended or not, “legitimizes" attacks against trans people.

“The far-right influencers who do want to paint LGBTQ people as pedophiles and groomers, they use this legislation as a way to amplify that violent rhetoric, which is exactly what drives the violence we’ve seen rising across the country, and events like Club Q,” Zephyr said.

Zephyr was referencing a recent shooting at a gay nightclub in Colorado Springs, Colorado, in which five people were killed. The suspect has been charged with murder and hate crimes.

Montana lawmakers may also consider other bills that affect transgender residents.

Republican Rep. Braxton Mitchell has proposed a bill to forbid minors from attending drag shows and ban drag story hours in libraries, daycare facilities, pre-K or after-school programs, according to emails Mitchell sent to legislative staff.

For her part, Zephyr plans to introduce two bills to protect the LGBTQ community — one would ban the “gay/trans panic” defense as a legal defense in Montana and another would protect the right of transgender people to adopt children.

The gay/trans panic defense asks jurors to find that a victim’s sexual orientation or gender identity is to blame for the defendant’s violent reaction that led to the criminal charges, according to the American Bar Association. Fifteen states and the District of Columbia ban the use of such a defense, according to the Movement Advancement Project, a Colorado-based think tank.

Montana has protections allowing gays and lesbians to adopt children, but does not have specific protections for trans folks, Zephyr said.

Jason Pierceson, a professor at the University of Illinois-Springfield, whose expertise includes gender and politics, said legislation attacking the LGBTQ community is “really an attempt by the religious right and tied to the Republican Party to erase trans people from public life, to enact policies erasing all kinds of legal protections and in some ways trying to erase them more fundamentally from society.”

Zephyr and Howell's presence in the Montana Legislature could help make a difference, he said.

“We know that representation like this matters in state legislatures,” Pierceson said, “particularly for expanding lesbian and gay rights.

Zephyr said she hopes to work with moderate Republicans “to help push back against what are extreme and dangerous attacks — attacks that deny trans people lifesaving medication.”

ETHIOPIAN WAR OF AGGRESSION
As Tigray calms, Ethiopia sees growing conflict in Oromia


 Ethiopia's Prime Minister Abiy Ahmed addresses lawmakers at the parliament in Addis Ababa, Ethiopia Thursday, July 7, 2022.

 Even as Ethiopian Prime Minister Abiy Ahmed attends the U.S.-Africa summit this week to promote last month's peace agreement between his government and authorities from the country's Tigray region, the larger region of Oromia appears increasingly unstable 

(AP Photo, file)

CARA ANNA
Wed, December 14, 2022 at 1:20 AM MST·5 min read

NAIROBI, Kenya (AP) — As one deadly conflict in Ethiopia begins to calm, another is growing, challenging a government that’s eager to persuade the international community to lift sanctions and revive what was once one of Africa’s fastest-growing economies.

Even as Ethiopian Prime Minister Abiy Ahmed attends the U.S.-Africa summit this week to promote last month’s peace agreement between his government and authorities from the country’s Tigray region, the larger region of Oromia appears increasingly unstable.

Africa’s second most populous country, with 120 million people, is again wrestling with deadly tensions between ethnic groups and their armed allies. Both the Oromo and Amhara ethnic groups, the country’s largest, allege killings and blame the other. With telecommunications often cut and residents often fearing retaliation if they speak out, the death toll in the violence in Oromia is unknown.

Speaking to The Associated Press on condition of anonymity out of fears for their safety, several residents of Oromia described deadly attacks in recent weeks.

One witness in the region’s Kiramu district said his father and cousin were among at least 34 people killed since Nov. 24. He blamed soldiers under the control of the Oromia regional government, saying he saw their uniforms.

“It all started with a confrontation between a single local militia and members of the Oromia special forces,” he said. “The special forces killed the militia who was a member of the Amhara community, and then a week-long killing followed." He estimated that hundreds of people have since fled the area.

An ethnic Oromo resident of Kiramu, however, accused an Amhara armed group known as the Fano of attacking and killing civilians and said he had seen more than a dozen bodies and buried four of them on Nov. 29.

“This militia group is killing our people, burning villages and looting everything we own,” Dhugassa Feyissa told the AP. “They shoot at anyone they find … be it public servants, police officers or teachers.”

The Oromo and Amara have lived together for years, he said, but they had never seen fighting like this before.

The deputy administrator of the Gidda Ayanna district, which also has seen some of Oromia’s worst violence in recent weeks, also blamed the Amhara Fano fighters.

“Civilians in our area are being killed, displaced and looted. This group is heavily armed, so it is no match for farmers who are defenseless,” Getahun Tolera said, noting that his district now hosts some 31,000 people who fled nearby districts. “We are still going house-to-house and discovering bodies.”

Ethiopian federal government officials declined to comment on the killings in Oromia and have not yet openly spoken about them. The prime minister last week said only that some “enemies with extreme views” were trying to destabilize the country, without giving details.

Ethiopian security forces, Oromo insurgents and Amhara militia are all battling each other in Oromia, Ethiopia’s largest region, said William Davison, an analyst with the International Crisis Group.

“Amid an intensifying government struggle against the rebels, all three have targeted civilians, particularly ethnic Amhara, which has led to an increase in violence by Amhara militia claiming to be defending their communities,” he said.

As Ethiopian federal security forces battle the Oromo Liberation Army, which the government has called a terrorist group, Oromo and Amhara residents and their armed allies also fight each other over grievances old and new.

Amhara settlers first moved en masse to Oromia in the 1980s during a famine in northern Ethiopia. They lived peacefully there until the past three years. The OLA split from an Oromo political organization and reportedly began targeting Amhara, at times as revenge for its losses to government forces. Amhara militia reportedly began targeting Oromos, and regional security forces became involved.

Oromos are Ethiopia’s largest ethnic group, followed by the Amhara, who have dominated the country’s politics for generations. Many Oromos were jubilant when Abiy, who identifies as Oromo, became prime minister in 2018. But that excitement has changed to frustration with the growing violence.

Rallies protesting the killings have been held in some communities in recent days. Last week, the government-appointed Ethiopian Human Rights Commission said “hundreds” of people had been killed in a “gruesome manner” in the past four months across 10 zones in the Oromia region, and it confirmed the presence of government forces, Amhara militia and the OLA in areas where repeated killings occur.

“The deliberate attacks against civilians in these areas are made based on ethnicity and political views … with the assertion that one supports one group over the other,” the commission said, urging the federal government to take urgent action.

Opposition parties also are speaking up. The Ethiopian Peoples’ Revolutionary Party, All Ethiopia Unity Party and Enat Party called for more security for the affected communities, and a senior Ethiopian official from the opposition National Movement of Amhara asked the federal government to intervene.

“The totality of us have become a country that shows no strong aversion to a continued bloodshed of innocents, wherever it may happen,” Belete Molla said in a Facebook post earlier this month.

Another prominent political figure, Oromo opposition politician Jawar Mohammed, earlier this month asserted that at least 350 people had been killed and over 400,000 displaced “just in the last 48 hours” in the Kiramu, Horo Guduru, Kuyu and Wara Jarso areas of Oromia.

“The government needs to quit pretending as if nothing is happening,” Jawar said in a Facebook post. “The conflict is fast becoming a communal war involving civilians. If not contained soon, it will likely spread to other parts of the two regional states and beyond.”

Eritrean troops murdered my uncle - WHO head Tedros


Wed, December 14, 2022 

Dr Tedros still looked visibly shaken at Wednesday's briefing in the Swiss city of Geneva

The head of the UN's public health body has accused Eritrean troops of killing his uncle in Ethiopia's war-torn Tigray region.

Dr Tedros Adhanom Ghebreyesus, of the World Health Organization, said he was told more than 50 other people were arbitrarily killed in the same village.

"I was not in good shape," admitted the still visibly shaken Ethiopian, whose family hails from Tigray.

Eritrea has so far made no public comments on the accusation.

Speaking at Wednesday's WHO briefing in Geneva on the latest Covid-19 issues, Dr Tedros said: "On Saturday, I was informed that my uncle was murdered by the Eritrean army.

"I spoke to my mother, and she was really devastated because he was the youngest from their family. And he was almost the same age [as me]," said the 57-year-old WHO director general. He provided no details about the timing of the alleged attack or the location of the village.

Dr Tedros also expressed hopes that a ceasefire agreement signed in November between the Ethiopian government and the Tigray People's Liberation Front (TPLF) "will hold and this madness will stop".

But Eritrean troops and forces from Ethiopia's neighbouring Amhara region were not party to the deal.

The conflict in Tigray erupted in late 2020 when Ethiopian Prime Minister Abiy Ahmed ordered a military offensive against local forces in the country's northern region.

He said he did so in response to an attack on a military base housing government troops.

The escalation came after months of feuding between Mr Abiy's government and leaders of Tigray's dominant political party.

The fighting devastated the populous country in the Horn of Africa, leaving thousands of people dead with 350,000 others living in famine conditions.

Map

CRIMINAL CRYPTO CAPITALI$M TOO

Binance Founder ‘CZ’ Insists We Can Trust His Crypto Exchange – but Can We?



Sam Kessler
Wed, December 14, 2022 

Monday’s arrest of Sam Bankman-Fried (“SBF”) capped off a historic period in the world of memes, money and mayhem that is the cryptocurrency industry. The arrest of the FTX exchange founder drew mainstream headlines that greatly overshadowed the other big crypto story of the day: questions around the solvency of Binance, the largest cryptocurrency exchange by trading volume.

If the collapse of FTX was catastrophic for the burgeoning crypto industry, a collapse of Binance would be apocalyptic.

This article originally appeared in Valid Points, CoinDesk’s weekly newsletter breaking down Ethereum’s evolution and its impact on crypto markets. Subscribe to get it in your inbox every Wednesday.

FTX – at one point the third-largest crypto exchange by spot volume – processed around $37 billion in spot trades in October, the month before it collapsed, according to CryptoCompare. The second-largest exchange, Coinbase, processed $47 billion that month. Meanwhile, Binance’s spot trading volume in October totaled a whopping $390 billion.

For over a month, Binance CEO Chanpeng Zhao (“CZ”), like other exchange leaders, has been on a quest to convince users that his product is wholly different from FTX – the SBF-led exchange that became insolvent after misusing user funds.

Like FTX, though, Binance is largely unregulated, and not everyone is buying CZ’s repeated assurances of propriety. Over the past week, a shoddy audit of the exchange’s reserves – followed by news of criminal investigations into Binance executives – alarmed users enough to catalyze record withdrawals from the platform.

While Binance appears to be weathering the storm so far (there are no glaring signs that the exchange has misappropriated user funds FTX-style), recent events have drawn attention to the fact that Binance, which exists beyond the scope of regulators and tracks customer holdings on its own servers rather than on public blockchains, asks for a tremendous amount of trust from its users in order to operate. In the “trustless” world of cryptocurrency, this is a bit hard to square.
Trusting Binance

The biggest players in crypto are centralized exchanges – platforms like FTX, Coinbase, Kraken and Binance – that take direct custody of user cryptocurrency (rather than leave tokens in a user’s own blockchain wallet) in order to facilitate trades.

After investors were burned by FTX – the largest crypto exchange to collapse after abusing the trust of its depositors – people have grown wary of trusting other, similarly centralized platforms. But not all cryptocurrency exchanges that custody user funds have earned the same degree of skepticism.

Unlike U.S.-regulated exchanges like Coinbase and Kraken, Binance (like FTX) operates in a sort of regulatory gray area. The firm was originally founded in China but left the country in 2017 just before its government banned cryptocurrency trading. Today, Binance deliberately obfuscates where it is headquartered.

While there are jurisdiction-specific versions of Binance, like Binance.US, which operate independently from the main Binance platform, the main, largely unregulated version of Binance is the biggest by far. (Binance.US doesn’t even rank among the top 10 crypto exchanges by spot trading volume.)

Coinbase, Kraken, Binance.US and other jurisdiction-specific Binance platforms make routine accounting disclosures and face strict oversight from regulators. The main Binance platform, however, isn’t subject to the same regulatory scrutiny as its peers. As such, it can offer relatively low fees along with products that it would be unable to run in the U.S. and many other countries – like sophisticated derivative contracts and margin trading facilities that allow users to borrow money in order to make bigger, riskier bets.

As a consequence of Binance’s regulation dodging, though, the platform’s users need to trust Binance’s word on whether their money is where it purports to be.
Record withdrawals

Fears of a Binance insolvency reached a fever pitch over the weekend after a much-derided “proof-of-reserves” report from the exchange failed to convince onlookers that it was fully collateralizing assets behind the scenes.

Widespread skepticism towards the report – which users criticized for its lack of thoroughness and selective disclosures – sparked record outflows from Binance, with investors pulling nearly a billion dollars from the exchange in a period of just 24 hours over the weekend.

Money continued to pour out of the exchange on Monday after a report from Reuters detailed a U.S. Department of Justice investigation into Binance – one of several ongoing probes into the firm from global law enforcement agencies. According to Reuters, federal prosecutors are weighing whether to charge Binance executives, including CZ, with money-laundering violations.

News of Binance’s legal troubles opened the floodgates even wider; users were soon criticizing Binance for everything from its ability to change the ledger of its “decentralized” BNB blockchain, to the solvency of “bridged” versions of BUSD, Binance’s stablecoin.

“Binance FUD” (meaning fear, uncertainty and doubt) briefly trended on Twitter.

The USDC pause

On Monday, Binance saw another $2 billion in net withdrawals from its platform – the largest withdrawal event for the exchange since this past June, according to crypto analytics firm Nansen.

The outflows were large enough to force Binance to temporarily pause withdrawals of USDC, the second-largest stablecoin – a vital instrument in crypto financial markets that stays “pegged” to the price of one dollar.

Binance said it needed to pause USDC withdrawals in order to facilitate a “token swap” of USDC stablecoins for its own BUSD stablecoins – a sort of practical measure necessary to loosen up liquidity for further withdrawals.

However, the move sparked worrying headlines, including one from CNBC, reflecting that some users saw the pause as yet another signal that Binance might not be fully collateralizing user assets behind the scenes. (Notably, pausing stablecoin withdrawals was one of the last actions FTX took before filing for bankruptcy.)

Despite the uproar, Binance’s explanation for why it paused USDC withdrawals is plausible on its face. Moreover, Nansen’s accounting of Binance-linked blockchain wallets shows that the exchange has at least $60 billion in on-chain reserves – more than enough liquidity to handle customer withdrawal demands and vastly more than FTX had (as a percentage of overall user assets) when it collapsed.

But without a full accounting of Binance’s assets and liabilities, the exchange’s health is impossible to judge definitively.

Why should Binance be trusted?

Despite Binance’s opaqueness, users continue to rely on the platform.

The largest crypto exchange offers users the ability to trade more kinds of tokens, with higher liquidity and lower fees, than virtually any other platform – centralized or decentralized. It also offers strategies that are inaccessible, in many jurisdictions, to anyone other than licensed investors.

But the fact that Binance is the only shop in town for certain trading activities isn’t the only reason why some investors continue to trust CZ with their money.

Wave Financial CEO David Siemer told CoinDesk that while he is wary of all centralized exchange platforms, he is relatively unconcerned that Binance will face FTX-type insolvency.

For one thing, says Siemer, Binance was founded in 2017 and simply has a longer track record than FTX, which was founded in 2019.

Siemer also noted that Binance has been relatively conservative in terms of the features it offers users – at least compared to FTX. “From a functionality standpoint,” said Siemer, “Binance rolls things out that are pretty tried and true.”

FTX, says Siemer, partially failed because it advertised a high-tech – but error-prone – cross-margining system. In essence, the system was supposed to allow a user to take multiple separate positions against a single pool of collateral; if one of a user’s bets went bust, the whole pool was subject to liquidation (meaning the FTX exchange would have automatically claimed the user’s collateral).

In Siemer’s experience, this system didn’t always work as advertised; users were sometimes able to make big bets that weren’t auto-liquidated when they should’ve been – meaning investors might have lost the exchange’s (and, it seems, other users’) money on bets that they should’ve lost.

Unlike FTX, Binance “[doesn’t] allow a lot of crazy, weird margining” features like cross-margining, said Siemer.

And then, says Siemer, there’s the fact that Binance “doesn't have an Alameda.” Alameda Research was the SBF-linked trading firm that collapsed after it apparently invested (and lost) funds belonging to FTX users.

“Because [FTX] had Alameda,” said Siemer, “both sides were able to just kind of prop each other up for a long, long time.”

While it’s technically possible that Binance is using or loaning out user funds behind the scenes (the firm is apparently under investigation for money laundering), there’s no sister firm like Alameda to which Binance would have obviously funneled money.
The importance of PR

While one can find some differences between Binance and FTX, it’s impossible to know what’s really going on at Binance behind the scenes. CZ, for his part, seems acutely aware of the fact that his exchange will live or die based on the trust of its users.

Amid all the “FUD,” the Binance founder – at one point more of a behind-the-scenes operator – has become uncharacteristically active on social media in recent months as the market has soured and the FTX debacle has continued to unfold.

In between tweets defending Binance, CZ has also found time to joke around with his followers, and he recently retweeted a tweet from 2019 in which he explained that he was “a normal guy, nothing fancy” and aimed to “seek and provide positive energy.”

In this way, one finds a striking similarity between CZ and SBF, his one-time nemesis. Both founders realize that in a world of centralization and lax regulations – perception is everything.

Binance sees $3.6 billion in outflows in a week as customers pull funds from the exchange - but CEO Changpeng Zhao says its 'business as usual'

Phil Rosen
Wed, December 14, 2022 

Changpeng Zhao
Chinese-Canadian businessman

Binance Co-Founder and CEO Changpeng Zhao delivers a speech at the opening event of Europe's largest tech conference, the Web Summit, in Lisbon on November 1, 2022.

Patricia De Melo Moreira/AFP/Getty Images

Binance has seen heavy withdrawals as the FTX implosion continues to shake confidence in the sector.

The exchange saw roughly $3.66 billion in net outflows over the last week, per Nansen data.

Binance CEO Changpeng "CZ" Zhao tweeted that the flows were "busines as usual."

Binance, the world's largest cryptocurrency exchange, has seen $3.66 billion in net outflows over the last week, according to data compiled by Nansen.

Customers have pulled a total of $8.78 billion out of the crypto exchange, while $5.12 billion have flowed into company, per Nansen's exchange flows dashboard.

Despite the sizable withdrawals, Binance still holds about $58.9 billion in assets, according to Nansen data cited by Decrypt.

Amid the outflows from the exchange, Binance CEO Changpeng "CZ" Zhao, shrugged off any concerns about customers withdrawing funds.

"We saw some withdrawals today," CZ tweeted Tuesday. "We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us."

His comments come shortly after the exchange temporarily froze customer withdrawals of the USDC stablecoin. The company announced withdrawals had resumed Wednesday.

Separately, the exec warned employees in an internal memo that he expects the "next several months to be bumpy," Bloomberg reported Wednesday.

A "historic moment" is beginning, he said, as repercussions from FTX's collapse continue to rattle the industry, but Binance is financially secure enough to survive a downturn.

Meanwhile, on Monday, Reuters said that the US Department of Justice has been investigating Binance over money laundering violations, reporting that the exchange had processed over $10 billion worth of illegal payments in 2022.

Binance resumes USDC withdrawals 

after temporary halt as FTX fallout 

ripples through crypto industry

David Hollerith

·Senior Reporter

Wed, December 14, 2022 

Binance, the largest crypto exchange by trading volume, resumed customer withdrawals for the stablecoin USDC Tuesday after announcing a brief halt earlier in the day.

That halt came as Binance saw a massive wave of withdrawals as crypto markets continued to be unsteady in the wake of FTX's collapse last month.

According to blockchain data platform Nansen, over the 24 hour period ending at 1 a.m. on Wednesday, Binance saw about $3 billion in total outflows, its largest customer withdrawal event since June.

Assets tracked in known Binance controlled wallets by Nansen amount to $59 billion in assets, $36 billion of which is held in the BNB and BUSD tokens Binance has created.

"I wouldn't be surprised if they are intentionally making it harder for USDC users to withdraw, while other stables and tokens are being withdrawn at ease," Conor Ryder, a researcher with Kaiko told Yahoo Finance.

As Ryder noted, in recent months Binance has worked to phase out the use of USDC on its platform in exchange for its own stablecoin, BUSD. That means it converts USDC deposits on its platform to BUSD, and must convert them back to meet withdrawal requests. The exchange's BNB token, which carries use as a native token for its own blockchain, is used on the platform for fee discounts like to FTX's failed FTT token.

“If there’s any risk that we fail, it all depends on how we fail,” Binance’s founder and CEO Changpeng Zhao said during an Ask Me Anything over Twitter.

“As long as we fail honorably and credibly, we let people withdraw their funds because the company ran out of money, that’s okay,” Zhao added.

As Zhao pointed out, crypto exchanges aren’t banks. That means when faced with a run of heavy customer withdrawals, crypto exchanges should still be able to give customers all their money back, even if the process puts them out of business.

A logo of Binance is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022. REUTERS/Benoit Tessier

As Reuters reported earlier this week, the Justice Department is now weighing whether to press charges against Binance for violating sanctions and money laundering laws after a multi-year investigation.

Along with other exchanges such as Houbi, Bitmex, and Bybit, Binance has gone to great lengths to publish a proof of reserves report, in addition to a report from auditing firm Mazars a week ago.

The Mazars report was an Agreed Upon Procedure (AUP), not an audit, and showed 97% of Binance's bitcoin holdings ($9 billion) were collateralized, meaning it hadn’t achieved a 1:1 backing of bitcoin deposits to liabilities.

However, the report noted it did not include "out-of-scope assets," meaning margin and loans taken out for BTC in other tokens. With those other tokens, Binance's bitcoin deposits would be “101% collateralized” according to Mazars' findings.

When asked why Binance doesn’t show more transparency surrounding what Mazars called "out-of-scope assets," Zhao said proving asset reserves "is not as simple of an exercise as people think" and that the company will roll out more information “in the next couple of weeks.”

“I don’t know exactly," Zhao said in reference to the timing on additional reserves data. "In Binance, internally, we don’t use a lot of deadlines. People work pretty fast already. We try not to push."

FTX fallout

On Monday night, FTX’s founder and former CEO Sam Bankman-Fried was arrested in The Bahamas. On Tuesday, the U.S. Justice Department, Securities and Exchange Commission (SEC) and Commodities and Futures Trading Commission (CFTC) filed charges against the 30-year old, alleging he and his company committed fraud by spending FTX customer deposits.

The shocking collapse has put the money of more than a million customers into the hands of Chapter 11 bankruptcy, and caused major investors from Sequoia, to BlackRock, to Temasek, and the Ontario Teacher’s Pension Plan to write off their equity investments in the exchange to zero.

According to data tracked by blockchain forensics company, Chainalysis, the impact of the FTX collapse has proven to be the third largest sell off in digital coins this year.

In May, the collapse of algorithmic stablecoin Terra (UST) cost crypto holders an estimated realized loss $20.5 billion, while the bankruptcies of Three Arrows Capital, Voyager Digital, and Celsius Network a month later accounted for as much as $33 billion in weekly realized losses.

FTX’s demise has left investors with a largest weekly realized loss of $9 billion. Over the course of this year, the overall value of crypto assets has dropped by about two-thirds.

Chainalysis

Recent revelations regarding how FTX handled customer funds has also forced many crypto investors to reassess the viability of the emerging asset class, with hearings on Capitol Hill this week seeing the industry again under pressure amid an onslaught of criticism from lawmakers.

"FTX is just the latest in the series of major crypto industry failures, failures of centralized crypto intermediaries like Celsius, and failures of DeFi offerings like Terra Luna," Hilary Allen, a professor at American University Washington College of Law said during a Wednesday Senate Banking, Housing and Urban Affairs Committee hearing on FTX.

"These failures arose in large part because of a feature that is unique to the crypto industry, crypto assets can be made up out of thin air."

David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers

Read the full memo the CEO of Binance sent to staffers after the exchange was hit by more than $1 billion of withdrawals in a day amid the FTX fiasco


Nidhi Pandurangi
Wed, December 14, 2022 

Binance CEO, Changpeng Zhao.

REUTERS/Darrin Zammit Lupi

Shortly after jittery investors withdrew over $1 billion from Binance on Tuesday, its CEO sent a memo to staffers.


Changpeng "CZ" Zhao seemed to try to assuage market fears amid the implosion of crypto peer FTX.


In the memo, CZ wrote Binance expects "the next several months to be bumpy."

On Tuesday, jittery investors withdrew more than $1 billion from Binance, the world's largest crypto exchange. Hours later, the company's CEO, Changpeng "CZ" Zhao, sent a memo to staffers where he seemed to try to assuage market fears in the aftermath of the implosion of crypto peer FTX.

"Binance will survive any crypto winter," CZ wrote in the memo.

Tuesday's withdrawals marked the biggest single-day withdrawal the exchange had seen since June, per blockchain research group Nansen.

Insider's Phil Rosen reported on Wednesday that Binance has seen about $3.66 billion in net outflows in the seven days preceding December 13, also citing data compiled by Nansen.

Publicly, CZ appeared to shrug off concerns about customers withdrawing funds, tweeting on Tuesday: "We saw some withdrawals today (net $1.14b ish). We have seen this before. Some days we have net withdrawals; some days we have net deposits. Business as usual for us."

But in the memo to staff, CZ wrote that Binance expects "the next several months to be bumpy." He added that the company will "get past this challenging period."

In the memo, CZ also seemingly referred to the troubles plaguing crypto peer FTX and its founder and ex-CEO Sam Bankman-Fried — who was arrested in the Bahamas Monday — writing: "With all that is going on, we know that we are at a historic moment in crypto. Rest assured, this organization was built to last."

Binance declined Insider's request for comment for this story.

Read the full memo Changpeng "CZ" Zhao sent to staff on Tuesday.

"Team:

You may have seen some of the latest news regarding Binance. The fallout from the FTX implosion has brought with it a lot of extra scrutiny and tough questions. The good news is that, even though the news stories don't always reflect it, we can answer the tough questions thrown at our business.

For example, despite today's news regarding withdrawals, we are in a strong financial position. We often process more than $1b in deposits or withdrawals on a daily basis. So, it's nothing unusual today. User assets at Binance are all backed 1:1 and Binance's capital structure is debt free. We maintain hot wallet balances to ensure that we always have more than enough funds to fulfill withdrawal requests and we top up hot wallet balances accordingly.

With regard to questions on the temporary halt of withdrawals of USDC, because we auto convert USDC to BUSD in order to retain large liquidity pools, we generally retain USDC deposits for future withdrawals. In today's case, many people deposited BUSD or USDT to withdraw USDC. When this happens, we need to convert. Our current conversion channels are clunky. We have to go through a bank in NY in USD, which is slow. We will improve this going forward.

With all that is going on, we know that we are at a historic moment in crypto. Rest assured, this organization was built to last. As long as we continue to offer users the best product, user experience, and frictionless trading environment – Binance will survive any crypto winter.

While we expect the next several months to be bumpy, we will get past this challenging period – and we'll be stronger for having been through it. As always, I'm grateful to each of you for your incredible dedication and hard work and I'm proud of the incredible business we've built together.

CZ"

SEE 

https://plawiuk.blogspot.com/search?q=FTX

https://plawiuk.blogspot.com/search?q=BINANCE

https://plawiuk.blogspot.com/search?q=CRIMINAL+CRYPTO