UK
CRISIS CAPITALISM: OCTOPUS ENERGY


INVESTIGATION
28 November 2022

In the third installment of Heat the Rich – an investigative series on energy firms profiting from the cost of living crisis – Corporate Watch takes a critical look at the UK’s fourth-biggest energy supplier, Octopus Energy.
Image description: A remote-controlled light switch is operated on by a nearby smartphone.
Credit: Green energy futures/Flickr

Octopus Energy Ltd is the fourth biggest energy supplier in the UK currently controlling around 11% of the energy supply market. It is the newest supplier in the big six, trendy enough to be reviewed by Vogue and posed as a ‘solution’ to “a broken, inefficient market”.

Originally launched in the UK in 2016, Octopus Energy Group Ltd now operates in 13 other countries with 23 million customer accounts. Its model is supposedly a “cheap green energy system” funded by “high sums of investment”.

But the Octopus name is not limited to the energy market. In 2018, it was listed as managing over £7 billion in assets with over 50,000 investors, Since then, it’s continued to grow, Octopus now operates eight distinct businesses: Octopus Energy, Octopus Investments, Octopus Healthcare, Octopus Ventures, Octopus Real Estate, Octopus Moneycoach, Octopus Renewables, Seccl and Octopus Wealth.

According to co-founder Christopher Hulatt, the group takes a holistic approach: “by building companies with one purpose – the relentless pursuit of ‘better’.” But better for who? Better for the pockets of Hulatt and wealth investors or for energy customers…Suffice to say, this isn’t covered in the Octopus Energy Ltd podcast on the Energy Crisis.

HOW MANY UK ENERGY CUSTOMERS DOES OCTOPUS ENERGY HAVE?

Electricity (excluding pre-payment): 3.1 million

Gas (excluding pre-payment): 2.7 million

WHO OWNS IT?

Touted as an “independent supplier” by Forbes. Octopus Energy is in fact part of a group, that is ultimately owned by OE Holdco Ltd.

At the start of the tax year in April 2022, OE Holdco Ltd, a UK-based holding company, was owned by the co-founder of Octopus Energy, Christopher Hulatt. But mysteriously, since the end of September OE Holdco Ltd has no listed owner. Hulatt and Octopus co founder Simon Rogers remains two of the three directors of OE Holdco Ltd, the third directorship is held by Octopus Company Secretarial Services Ltd.

OE Holdco Ltd was formed back in March, at the same time as families around the UK were plunged further into the cost of living crisis. Already by September, it has become the ultimate parent company of the Octopus Group. It’s certainly one to keep eye on when annual accounts are due.

IS OCTOPUS ENERGY SUFFERING AS A RESULT OF THE COST OF LIVING CRISIS?

It doesn’t seem so, in fact, Octopus Energy appears to be going from strength to strength. According to the company’s accounts from 2021, it recorded record revenues of £1.9 billion in 2021 with profits at £25 million. Bouncing back from a loss of £47 million in 2020.

The Octopus Group, with its fingers in many pies, celebrated a revenue of £2 billion in 2021, £800 million more than in 2020, a 62% increase.


Whilst the ultimate parent company OE Holdco Ltd is too new to file accounts, the Octopus Capital Ltd’s accounts for 2021 show that energy supply is the key moneymaker for the group, accounting for 85% of the total turnover. The group is also expanding internationally through acquisitions in Japan and the USA. The cherry on the cake is that the Group paid dividends of £17.7 million in 2021 in comparison to £3 million in 2020 highlighting that right now business is booming for the Octopus Group, despite the ongoing cost of living crisis.

WHO RUNS IT?

Legend has it that Octopus was started in Chris Hulatt’s bedroom, when Hulatt, Simon Rogerson, and Guy Myles founded the company in 2000. Hulatt and Rogerson remain at the top, while Myles left in 2014 to set up a financial investment company.

Day to day, Hulatt specialises in two things: hunting for investments for Octopus worldwide and cosying up to the UK government through meetings with politicians and ministers. A Cambridge graduate, Hulatt owns over 75% shares of Octopus Group Holdings Ltd and is the director of 30 companies on Companies House including Octopus Energy Ltd. With no official position apart from ‘co-founder’ Hulatt’s salary from Octopus businesses is difficult to measure. But what remains certain, is that Hulatt is not feeling the bite from the energy crisis: with a net worth of £276 million. Outside of the Octopus business, Hulatt is the Chairperson of Enthuse, a digital donation tech company, and the non-executive director of ClearlySo an investment bank.

Simon Rogerson is the chairperson of Octopus Investments, the CEO of both the Octopus Group and OE Holdco Ltd. He is listed as the director of 26 companies and was educated at the University of St Andrews. Rogerson is likely to have taken home at least £663,000 in 2021 as the highest-paid director of Octopus Capital Ltd. But Rogerson’s pockets go a lot deeper than one remuneration. According to business information databases, Rogerson owns 11% of shares at his workplace, making him the biggest single shareholder of the Octopus Group. Rogerson’s net worth is as high as £229 million.

Greg Jackson is the CEO and founder of Octopus Energy Group. Jackson is likely to be earning a salary upward of £169,000 as the highest-paid director of Octopus Energy Group Ltd. Celebrated in iNews, Jackson was seen as a bit of an angel after he gave up £150,000 in autumn 2021 “when the energy crisis began to bite”. But despite a relatively low salary he’s well-placed to make such a “selfless act” because Jackson’s 6% stake in the renewables branch of Octopus means he’s estimated to be worth around $300 million (over £265m).

Aside from Octopus, Jackson is the chairperson of Consultant Connect UK, a private tech business profiting from NHS privatisation through referral management.

THE OCTOPUS ADD-ON? KRAKEN TECHNOLOGY

In addition to cashing in on supplying energy, the Octopus Energy Group has another trick up its sleeve: Kraken Technology – which is part of the Octopus Energy Group

Kraken Technology provides data services to manage energy usage. Kraken’s platform manages “billing, payments, meter data management, CRM, customer communications, digital self-service, contact centre telephony, industry and market connections (and more)”. It appears that through Kraken Technology services Octopus has made a name for itself in the playground of the Big Six, even convincing its competitors like EDF and e.on to buy up its license. Now, 40% of the British market is licensed to Kraken.

DOES THE COMPANY AVOID PAYING TAXES?

Octopus Energy seems to be in the clear. But it’s one to look out for, as OE Holdco is yet to publish its first set of accounts, and has no publicly registered owner.

Moreover, the majority of companies owned by Octopus Investments Ltd are registered as LLPs, which fall under a different tax system in that the LLP itself is not taxable, untaxed profits are distributed to members who then pay tax through a self-assessment tax return.

The Octopus Group certainly doesn’t shy away from speaking about business tax to the government. In May 2022, Octopus Group attended a meeting on business taxation at the HM Treasury with Lucy Frazer MP alongside Uber and BP amongst others.

POLITICAL DONATIONS IN THE UK

In 2018 Octopus Investments Ltd donated £12,500 to the central Conservative party. Co-founder, Christopher Hulatt, donated a further £2,500 to the party’s local branch Hitchin & Harpenden (Hulatt’s home constituency) in 2019.

Hulatt’s donation fuelled controversy after Open Democracy revealed it had preceded former chancellor – and now Prime Minister – Rishi Sunak’s, selection of Octopus Investments to manage the government’s £100m “sustainable infrastructure fund”, the UK Infrastructure Bank (UKIB).

DOES THE COMPANY HAVE CLOSE RELATIONSHIPS WITH THE GOVERNMENT?

Yes. As Octopus co-founder Christopher Hulatt put it: “I spend most of my time focusing on…maintaining strong relationships with the UK government and MPs”.

In October 2020, Rishi Sunak alongside Boris Johnson appear to have done PR for Octopus Energy, promoting the company in an official 10 Downing Street video at the Octopus Energy HQ. Between 2020-2022 Octopus had four meetings with former UK prime minister Boris Johnson. This included one solo meeting to discuss energy technology and sustainability in October 2020 as well as a further 125 meetings with ministers to discuss energy: retail, innovation, efficiency and security.

In 2018, Hulatt spoke at the Conservative party conference as part of an event on ‘Boosting Consumer Capitalism’ organised by the right-wing Adam Smith Institute. Fellow speakers included Hulatt’s local Conservative MP, Bim Afolami, and Conservative MP John Penrose.

In 2020, Hulatt was part of the Unlock Britain Commission set up by the aforementioned Bim Afolami to produce a report for the Social Market Foundation to design “10 transformative policies for Britain after the Coronavirus crisis”. Other advisors included top figures from ASOS Plc and PwC.

In 2021, Hulatt led a training on “How to build a nation of entrepreneurs” with Conservative MP and Minister of State for Local Government and Building Safety, Paul Scully as part of The Entrepreneurs Network (TEN).

Last but by no means least, at the end of September when Octopus changed things up, Stuart Quickenden was brought on board as a director for the Octopus Group. Quickenden was a board member for the Department for Business, Energy and Industrial Strategy (BEIS) between 2017 to 2020. So no doubt he will have some useful contacts to make Octopus Energy’s relationship with government even cosier.

NEW INTERNATIONALIST

Decoding the extremist symbols and groups at the Capitol Hill insurrection

Flags, signs and symbols of racist, white supremacist and extremist groups were displayed along with Trump 2020 banners and American flags at Wednesday's riot at the US Capitol.

© CNN Illustrations/Jim Urquhart/Reuters

The pictures tell part of the story of the beliefs of some of those who chose to show up on that day -- from passionate and peaceful Trump supporters to extremists who showed their hate with their symbols as well as their actions.

The mixing of the groups is one issue that experts who track extremism and hate have long been concerned about.

The certification of the election results proved to be exactly the type of event that brought together various groups and could have led to radical ideas being shared, they say. The initial event, which was heavily promoted and encouraged by President Trump, gave all of these groups something to rally around.

"This was an event designed to oppose the results of a free and fair democratic election and the transition of power that would naturally follow," Mark Pitcavage, a historian and expert in extremism with the Anti-Defamation League said.

© CNN Illustrations/Samuel Corum/Getty Images

CNN spoke with him to identify the symbols and understand the chilling messages of tyranny, white supremacy, anarchy, racism, anti-Semitism and hatred they portray.


Noose and gallows

While a noose on its own is often used as a form of racial intimidation, Pitcavage says he believes in this context the gallows were to suggest punishment for committing treason. "It is suggesting that representatives and senators who vote to certify the election results, and possibly Vice President Pence, are committing treason and should be tried and hanged," he explains.

That treason rhetoric was seen on right-wing message boards in days leading up to the event.


Three Percenters flag

© CNN Illustrations/Andrew Caballero-Reynolds/AFP/Getty Images

The Three Percenters (also known as III%ers, 3%ers or Threepers) are part of the militia movement in the United States and are anti-government extremists, according to the ADL.© CNN Illustrations/Brendan Gutenschwager




Like others in the militia movement, Three Percenters view themselves as defending the American people against government tyranny.

"Because many adherents to the militia movement strongly support President Trump, in recent years, Three Percenters have not been as active in opposing the federal government, directing their ire at other perceived foes, including leftists/antifa, Muslims and immigrants," according to the ADL.

The group's name comes from an inaccurate claim that only three percent of the people in the colonies armed themselves and fought against the British during the Revolutionary War.

The flag seen above is their logo on the traditional Betsy Ross flag. Pitcavage says right-wing groups (mainstream or extreme), which think of themselves as patriotic, sometimes co-opt America's first flag.

"Release the Kraken" flag

© CNN Illustrations/ITV

The flag references former Trump lawyer Sidney Powell's comments that she was going to "release the Kraken." Powell falsely said she had evidence that would destroy the idea that Joe Biden won the presidency.

The "Kraken," a mammoth sea creature from Scandavian folklore, has turned into a meme in circles that believe the election was stolen. The Kraken, they say, is a cache of evidence that there was widespread fraud. On social media, QAnon conspiracy and fringe sites #ReleaseTheKraken has been widely shared along with false theories of fraud.


The Proud Boys and the OK sign

The far right has co-opted the OK sign as a trolling gesture and, for some, as a symbol of white power. The ADL added that symbol to its long-standing database of slogans and symbols used by extremists.

"They are wearing orange caps to identify each other; in past rallies they wore identifying shirts and other gear, but they ditched that for this event after their leader was recently arrested," Pitcavage explained.

The Proud Boys has been supportive of President Trump and present at "Stop The Steal" rallies in Washington, DC. The Proud Boys' leader, Henry Tarrio, who goes by Enrique Tarrio, was released from police custody Tuesday on charges related to allegedly burning a Black Lives Matter banner taken from a Black church last month during protests in the city after a "Stop the Steal" rally last month. He was ordered by a local judge to stay out of DC as he awaits trial, including during this week's protests.


"Kekistan" flags

The green, white and black flag was created by some members of the 4chan online community to represent a made-up joke country named for "Kek," a fictional god they also created. It has long been present at right-wing and far-right rallies.

Pro-Trump supporters storm the U.S. Capitol following a rally with President Donald Trump on January 6, 2021 in Washington, DC. Trump supporters gathered in the nation's capital today to protest the ratification of President-elect Joe Biden's Electoral College victory over President Trump in the 2020 election.

 (Photo by Samuel Corum/Getty Images)



© CNN Illustrations/Evelyn Hockstein/For The Washington Post/Getty Images

"The Kekistan flag is controversial because its design was partially derived from a Nazi-era flag; this was apparently done on purpose as a joke," Pitcavage explained. "Younger right-wingers coming from the 4chan subculture (both mainstream right and extreme right) often like to display the Kekistan flag at rallies and events."

Altered historic flags

Altered Confederate and Gadsden flags were seen throughout the crowds at the Capitol. One Confederate battle flag variation included an image of assault rifle and the slogan "Come and take it" to convey an anti-gun control message. The phrase "come and take it" paraphrases the "come and take them" retort uttered by Spartan King Leonidas at the Battle of Thermopylae when the Persian King Xerxes told him and his people to lay down their spears in return for their lives, Pitcavage said.

The Gadsden flag, which is known to many as the "Don't Tread on Me" flag, is a traditional and historical patriotic flag dating to the American Revolution. The flag and symbol are also popular among Libertarians. But it also has been co-opted by right wing groups. Pitcavage explains that while some fly it as a symbol for patriotism, others use it as a "symbol of resistance to perceived tyranny."

Oath Keepers

A man is seen wearing an Oath Keepers hat inside the Capitol after it was breached. The Oath Keepers is a pro-Trump, far-right, anti-government group that considers itself part of the militia movement charged to protect the country and defend the constitution. The group tries to recruit members from among active or retired military, first responders, or police.

© CNN Illustrations/Roberto Schidt/AFP/Getty Images

Their leader has spouted vast conspiracy theories on his blog, accused Democrats of stealing the election, previously threatened violence if it was necessary on Election Day during an interview with far-right conspiracist Alex Jones and said his group would be armed to protect the White House if necessary, according to the ADL.

The Confederate flag

During the United States' long Civil War, no Confederate battle flag came within the shadow of the US Capitol, but on Wednesday, an insurrectionist carried one right through its halls.

© CNN Illustrations/Joseph Prezioso/AFP/Getty Images

Photographers captured a man carrying it past the portraits of abolitionist Charles Sumner and slaveholder John Calhoun.

The flag was always a symbol of support for slavery. After World War II, it became a prominent symbol of Jim Crow and segregation, Pitcavage says not surprisingly, it is a popular symbol among white supremacists -- even outside the United States.


America First flag

A rioter cloaks himself in an America First flag with the logo of the podcast by far-right commentator Nick Fuentes. Fuentes attended the event at the Capitol, but was photographed remaining outside the Capitol building.

© CNN Illustrations/Saul Loeb/AFP/Getty Images

"America First" was also a slogan President Trump used in describing his foreign policy. Its adoption was criticized by the ADL, which said it had an anti-Semitic use seeking to keep the US out of World War II.

The ADL says Fuentes is part of the "groyper army," which the ADL calls a white supremacist group.

"While the group and leadership's views align with those held by the white supremacist alt right, groypers attempt to normalize their ideology by aligning themselves with 'Christianity' and 'traditional' values ostensibly championed by the church, including marriage and family," the ADL explains. "Like the alt right and other white supremacists, groypers believe they are working to defend against demographic and cultural changes that are destroying the 'true America' -- a white, Christian nation."


"Camp Auschwitz"

A rioter inside the Capitol wore a "Camp Auschwitz" sweatshirt. The bottom of the shirt reads "Work brings freedom," which is the rough translation of the words "Arbeit macht frei" on the gates of the Nazi concentration camp. Auschwitz was the largest and most infamous Nazi concentration camp, where about 1.1 million people were killed during World War II.

Pitcavage says he believes the shirt came from the now-defunct website Aryanwear. The design, which has been around for about 10 years according to Pitcavage, has been popping up on differing websites in recent weeks, though it is often taken down when a complaint is made.

© CNN Illustrations/Joseph Prezioso/AFP/Getty Images


Nationalist Social Club stickers

© CNN Illustrations/Telegram

A social media image shows Nationalist Social Club stickers on what appears to be US Capitol Police equipment It's unclear when the photo was taken, but it was posted Wednesday in a Telegram chat the group uses, which includes a Nazi symbol as part of their name.

NSC, apparently a word play on the National Socialists or Nazi party, is a neo-Nazi group that has regional chapters in both the United States and across the globe, according to the ADL. It is unclear if the sticker on the right refers to a New England chapter, or because the group originally called itself the New England Nationalists Club.

"NSC members see themselves as soldiers at war with a hostile, Jewish-controlled system that is deliberately plotting the extinction of the white race," according to the ADL. "Their goal is to form an underground network of white men who are willing to fight against their perceived enemies through localized direct actions."


MAGA Civil War January 6, 2021 shirts

There are still many questions about how exactly the attack on the Capitol happened and who led the charge. But the calls for overthrowing the government and for a civil or race war have long been rallying cries in far-right circles.

The shirts worn by these men on the Capitol grounds on Wednesday show there was at least an intention to commemorate the day. They wore pre-printed shirts, referencing Trump's signature Make America Great Again slogan, alongside the words Civil war and the date of the event that turned into insurrection.

Many commenters in far-right forums have written since the attack, that this is just the beginning of that civil war that many of them have long desired.

© CNN Illustrations/Tess Owens/Vice News

The US Navy has figured out what a nuclear-powered attack submarine ran into in the South China Sea: report

Ryan Pickrell
Mon, November 1, 2021

The Seawolf-class attack submarine USS Connecticut has been battling bed bugs. US Navy WTF DOES THAT HAVE TO DO WITH ANYTHING IN THIS STORY

The US Navy has completed its investigation into a mysterious submarine incident in the South China Sea.

USS Connecticut grounded on an uncharted seamount, USNI News first reported.

The investigation has been sent to the fleet commander, who will consider accountability actions.

The US Navy investigators have determined what a nuclear-powered attack submarine hit in the South China Sea last month, USNI News reported Monday, citing defense officials familiar with the investigation and a legislative official.

IT COULD HAVE BEEN A KRAKEN

The Seawolf-class nuclear-powered attack submarine USS Connecticut collided with an unidentified object on October 2, the Navy revealed five days after the incident. Investigators have reportedly determined the submarine ran aground on an undersea mountain, a seamount, the location of which was uncharted.

The earlier Navy statement on the incident left a lot to the imagination, stating only that the the boat struck something while operating in international waters, there were no life-threatening injuries, the sub was in stable condition, and the nuclear propulsion systems were not damaged.

The sea service did not say where the incident occurred, though Navy officials speaking on the condition of anonymity provided that information to some reporters following the release of the statement.

As of last Wednesday, the US Navy still was not quite sure what the submarine collided with, though defense officials told USNI News that early indications suggested that Connecticut collided with a seamount, an undersea feature that rises from the ocean's depth. It can also pose a risk to ships on the surface depending on how close its summit is to the surface.

China, often at odds with the US in the South China Sea, has capitalized on the limited information provided by the Navy about the incident, with Chinese officials accusing the US of a cover-up and calling it "cagey" and "irresponsible."

The US military has denied that it is trying to cover up the incident. After a Chinese foreign ministry spokesman first made the allegations, Pentagon press secretary John Kirby said: "It is an odd way of covering something up when you put a press release out about it."

But Beijing, both the foreign ministry and the defense ministry, has continued to criticize the US for a "lack of transparency" while repeatedly calling the US "the biggest force for militarization of the South China Sea," an accusation typically aimed at China.

The conclusion of the command investigation into the USS Connecticut incident takes some of the mystery out of things. The investigation, according to USNI News, has been passed up to the 7th Fleet commander, who will make decisions about potential accountability actions.

As the investigation into the incident has not yet been publicly released, information is still limited on how the submarine ran into an seamount and to what degree members of the crew and command are responsible.

The submarine, one of only three in the powerful Seawolf class, is in Guam, where it is undergoing repairs, likely initial work before more extensive repairs can be completed elsewhere.

There are concerns that if the Connecticut has to be taken back to a public shipyard for additional repairs, it could throw a wrench into a submarine maintenance backlog that has long been problematic.

Insider reached out to 7th Fleet for comment on the results of the investigation but did not immediately receive a response.

KRAKEN

The kraken is a legendary sea monster of gigantic size and cephalopod-like appearance in Scandinavian folklore. According to the Norse sagas, the kraken dwells off the coasts of Norway and Greenland and terrorizes nearby sailors. Authors over the years have postulated that the legend may have originated from sightings of giant squids that may grow to 13–15 meters (40–50 feet) in length. The sheer size and fearsome app…

Seamounts — undersea mountains formed by volcanic activity — were once thought to be little more than hazards to submarine navigation. Today, scientists recognize these structures as biological hotspots that support a dazzling array of marine life. The biological richness of seamount habitats results from the shape of these undersea mountains.

What is a seamount?

oceanservice.noaa.gov/facts/seamounts.html

#CRYPTID     #KRAKEN     #CRYPTOZOOLOGY

World's most elusive giant squid could be monogamous, female corpse hints


By Stephanie Pappas 3 days ago

Squid was embedded with sperm from a single male.

A female giant squid caught in a net off Kyoto had dozens of sperm packets from a single male embedded in her muscles. (Image credit: Miyazu Energy Aquarium)

A female of the world's largest squid — sometimes called the "kraken" after the mythological sea monster — that was caught off the coast of Japan apparently had just one amorous encounter in her lifetime.

The female had sperm packets from just one male giant squid embedded in her body, which surprised researchers. Because giant squid are solitary creatures that probably run across potential mates only occasionally, scientists expected that females would opportunistically collect and store sperm from multiple males over time.

"We were almost confident that they are promiscuous," said Noritaka Hirohashi, a biologist at Shimane University in Japan. "We just wanted to know how many males are involved in copulation. So this is totally unexpected."


Related: Release the kraken! Giant squid photos


Mysterious mating

Hirohashi and his colleagues study reproduction and sperm biology in several squid species, but the most mysterious of all is Architeuthis dux, the giant squid. Rarely seen alive, the giant squid has a life cycle shrouded in deep ocean mystery. Video of living giant squid in their natural habitats has been captured only twice. The only thing researchers know about these mysterious creatures' mating habits is that female giant squid are sometimes found with large sperm packets known as spermatangia embedded in their muscles. Researchers writing in a 1997 paper in the journal Nature posited that male giant squid probably use their "muscular elongate penis" to inject the sperm packets into the females.

How sperm meets egg from there isn't entirely clear. It's possible that the female releases chemical cues that activate the sperm when she's ready to spawn, or perhaps she releases her eggs in such a way that they trail along the sperm packets as they leave her body. Squid females do have organs near the mouth called seminal receptacles, where some species storm sperm, and it's possible that in those species, the embedded sperm can travel over the skin to these receptacles.

Knowing that witnessing two giant squid mating is highly unlikely, Hirohashi and his team developed a window into the process, using genetics. Examining squid specimens from fisheries and museum archives, they pinpointed some segments of the giant squid genome that would distinguish one set of squid DNA from another. Think of it like a squid paternity test: Any sperm packets found on a female can be tested to see if they came from multiple males and, if so, how many.

The researchers are always on the lookout for sperm-spangled females. They send out flyers to local museums, fisheries and aquariums, asking them to alert the research lab if a giant squid specimen turns up. In February 2020, they got good news.

"In this case, we found [a] Yahoo News [article] telling that the giant squid was caught," Hirohashi wrote in an email to Live Science.

Saving sperm


The spermatangia, or sperm packets, embedded in the upper layer of muscle on the female giant squid. No one knows how the sperm get to the eggs to fertilize them. (Image credit: Miyazu Energy Aquarium)

The specimen was a female, with a mantle, or main body, 5.25 feet (1.6 meters) long. It was missing a pair of tentacles and one eye but still weighed 257 pounds (116.6 kilograms). The squid had been caught in a fisher's net in Kyoto and was displayed at the Miyazu Energy Aquarium before being dissected.


When Hirohashi's team examined the body, they found that the squid was just reaching maturity and that it had squiggly spermatangia 3.9 inches (10 centimeters) long embedded in five separate locations: three places on the squid's mantle, one by an arm and one on the head. Each location hosted at least 10 spermatangia. Some were near gashes that may have been caused by a mating male's beak.


Genetic analysis of the spermatangia revealed that each and every one came from the same male. This was shocking to the research team; giant squid are often found bearing sperm packets, in a way that suggests that males aren't particularly picky. Spermatangia have been found on immature females, perhaps as a way for males to make their sperm available after the female matures, and even on males, perhaps because males are willing to try anything (or perhaps because they sometimes accidentally self-fertilize). All of the evidence pointed to a species that would mate first and ask questions later.

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The specimen, of course, is just one female, so more research is needed to see if monogamy is the norm among giant squid females. It's possible that this female had simply only encountered one male before she was entangled in the net that ended her life, the researchers wrote in the September issue of the journal Deep Sea Research Part 1. Or perhaps it is typical for females to mate with just one male. The gashes might be part of the males' strategy for ensuring other males don't move in, perhaps by limiting a female's life span after mating so that she doesn't have time to collect more sperm. Or, the researchers speculated, the aggression and injuries could spur the females to mature and spawn so that the sperm is speedily fertilized.

The next step is to study the spermatangia of more specimens, Hirohashi said. And researchers need to figure out how the stored sperm reaches the eggs, which are not deposited particularly close to the spermatangia. Researchers also need to figure out basically everything else about this elusive creature, including its life span, migration and habitats, he added.

"Kids ask these questions at the aquarium, so we must answer," Hirohashi said.

Originally published on Live Science

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