SELF EXPROPRIATION IS NOT THEFT
Lebanese hold up banks to claim their own money in financial crisis

Depositors have been taking justice into their own hands to access their savings frozen since the financial collapse in 2019.

By ANDREA LÓPEZ-TOMÀS/THE MEDIA LINE
Published: NOVEMBER 28, 2022 

A demonstrator waves the Lebanese flag in front of riot police during a protest in Beirut, Lebanon, August 8, 2020
(photo credit: GORAN TOMASEVIC/REUTERS)

Dr. Anis Tannous placed an olive tree in front of a branch of his bank. In the Koura area, in northern Lebanon, this family man came unarmed and organized a sit-in in front of Société Générale de Banque du Liban, a Lebanese bank and a subsidiary of SGBL Group. Despite his health problems, he stayed there all morning demanding the transfer of his son’s student loan to the United States. The olive tree prevented anyone from entering or exiting the establishment.

For more stories from The Media Line go to themedialine.org

In the south of the country, Reda Reda, a former Lebanese Army soldier, held up a bank in Tyre to ask for his own money. He didn’t carry a gun with him but he said he just wanted to get his savings in order to take care of his mother who has cancer.

Back to the north, in Tripoli, a depositor broke into a branch of the Intercontinental Bank of Lebanon with her sick mother. After negotiations with the administration, Amina Mohammad got $15,000 of her own savings.

All of these bank holdups happened in just one day, November 23, in the small country of Lebanon. The perpetrators were all depositors of the banks they assaulted. But, despite having money in their accounts, Lebanese can’t access it. Their banks only allow them to take $200 out per month, so they have turned to the use of symbolic force.

A view shows the exterior of Lebanon's Electricity Company and residential buildings during sunset in Beirut, Lebanon November 19, 2022

 (credit: REUTERS/ISSAM ABDALLAH)

'It's their only option'

“The financial, economic, and social situation in Lebanon is bad – really bad,” said Fouad Debs, a lawyer for the Depositors Union. “We have seen a contraction of the economy to a quarter of what it was, a huge rise in poverty and unemployment, a destruction of all safety nets, the collapse of State services, so people have no more income and hence, they’re resorting to their savings that the banks have stolen,” he told The Media Line. “It’s their only option,” he added.

Since summer, these bank heists have become a reality for the Mediterranean country. Lebanese have been dealing with a financial and economic crisis, one of the world’s worst since the 1850s, according to the World Bank. When it started in 2019, banks imposed capital controls overnight that have never been made legal via legislation. These informal mechanisms have allowed financial institutions to impose limitations on bank withdrawals.

Without access to their own savings, Lebanese try to live by the day, but the current situation makes it very difficult. The lira has lost around 90% of its value against the dollar, and three-quarters of the population has plunged into poverty, according to the United Nations. “People have waited almost three years and have endured a lot,” said Debs.

“Some had hoped to see their money. Others had some other source of income to sustain themselves and their families,” the Depositors Union’s lawyer explained. “Unfortunately, today, three years following the collapse, people are getting sicker and poorer, and they are devastated and hopeless,” he added.

Regular mismanagement and corruption among the country’s powerful elite have left many to fear that their life savings are gone. Rami Ollaik, also a lawyer, created the group United for Lebanon against Corruption. Ollaik’s face has become well-known nationally since he often accompanies depositors during their bank holdups.

“We are living with zero dignity as victims of these monsters from the mafia,” said Ollaik, referring to the political class. “Our lives are being compromised because of their greed and crimes,” he told The Media Line. That is why they moved their fight from the legal system to direct action. They are planning new acts “targeting bank owners and judges, who are accomplices in crime, at their residences.”

Sense of desperation creeping over Lebanese society

The reasons for the rise in this phenomenon have a lot to do with a sense of desperation creeping over Lebanese society. “Most of the depositors who have held up banks were doing it for health and educational reasons, followed by payment of debts,” Debs told The Media Line.

For now, there haven’t been many legal consequences for those who chose to hold up their banks. The Depositors Union has “portrayed this strategy as a misdemeanor or taking justice into their own hands, and the judges are convinced by such an approach,” Debs explained.

Ollaik uses the same justification. “We see the liberation of deposits as falling under the right of self-defense. When all other ways evidently fail, according to Article 184 of the Lebanese Penal Code, taking justice into one’s hands becomes legitimate, even if the acts would be considered crimes under normal conditions,” he said.

Most of the depositors have succeeded in getting part of their savings out, in most cases to be used for medical treatments.

Since the heist strategy’s surge, many banks have closed or limited their in-person customer support services to try to stop the spread of this phenomenon. The bank employees’ union said that around 6,000 employees have lost their jobs since the crisis began. For now, this approach has not been successful. Many bank employers say the robberies are misguided anger that should be directed at the Lebanese state.

But depositors argue that bank owners are among the first to be blamed for the collapse. “When a depositor is dying at the gates of the hospital while the bank keeps their money and the bankers spend it on private planes, that is not right,” Ollaik told The Media Line. “We consider it legitimate that they claim their savings by force,” he added.

And Lebanese society thinks the same way. “Unsurprisingly, society and the people have supported these kinds of actions,” said Debs. People see these depositors as modern Robin Hoods taking matters into their own hands and doing what is right. That is also why some new groups such as the Depositors Union have been created. These associations aim to give support and legal assistance to those affected by the financial crisis.

For years now, Lebanese authorities have been engaged in conversations with the International Monetary Fund (IMF) to get a bailout plan for the country’s economy. But the global institution has laid down some basic requirements that Lebanon has not fulfilled. Among other demands, a formal capital control law is needed.

The IMF has asked for other significant reforms, including restructuring the banking sector and lifting bank secrecy laws. “The only long-term, sustainable solution is through a recovery plan that is fair, comprehensive, transparent, and includes the restructuring of the banks and the public debt, the safeguard of public assets and social protection, as well as holding the people responsible for the crisis and its mismanagement – mainly bankers, politicians, high-ranking civil servants, oligarchs, and oligopoly holders,” concluded Debs.

Meanwhile, the population will continue to take justice into their own hands. “The reason behind most holdups is desperation, but people are increasingly talking about taking back their money to feel empowered and defy the system,” said the lawyer for the Depositors Union.

Progressives returned for third term in Australia's Victoria state

2022/11/27

SYDNEY (Reuters) -The progressive government of Australia's Victoria state won re-election on Saturday, clearing the way for spending on infrastructure, education and healthcare.

After eight years in power in the country's second-most populous state, centre-left Labor was tipped to defeat its Liberal-National coalition opposition, and the government, led by Daniel Andrews, was comfortably returned at Saturday's poll.

With 67% of the vote counted, the Australian Broadcasting Corporation (ABC) on Sunday forecast Labor to win 49 seats in the state's lower house, and the Liberal-National coalition to take 24 seats.

Forty-five seats are needed to form a majority government in the 88-seat Victorian legislative assembly.

"I'm humbled and so grateful, so so grateful, that Victorians have re-elected a majority Labor government," Andrews told ABC television on Sunday morning.

Four years ago, Labor returned to power in a landslide, winning just under two-thirds of seats, but polling in the final days of this campaign had suggested a tighter race.

Going into the campaign, both sides pledged millions to spruce up the state's infrastructure, education and healthcare system.

Labor has pledged to build a rail loop project for state capital Melbourne, which local media estimates will cost about A$125 billion ($85 billion), but the coalition, led by Matthew Guy, vowed to shelve it if elected.

Guy conceded his conservative coalition had “a lot of work to do” after the third straight election loss to Andrews, the Guardian reported on Sunday.

Under the Andrews government, Melbourne, a city of 5 million people, spent more time in COVID-19 lockdowns than any other city in the world. The premier on Sunday referred to the "unprecedented time" in the state's history.

"You don't get to choose the challenges you face, that's what leadership's about," Andrews told reporters in Melbourne.

Prime Minister Anthony Albanese, also a Labor politician, said Andrews deserved a pat on the back on the election win. "I congratulate Dan Andrews and his entire team," he told reporters in Canberra.

(Reporting by Sam McKeith; Editing by Daniel Wallis)

© Reuters

Archaeologists find mummies in Egypt with golden tongues in their mouths

Uhm we're not exactly sure why.

by Fermin Koop
November 28, 2022
in News, Science

It’s not the first time that this has happened, but we still get a bit surprised every time. Archaeologists excavating at the Qwaisana Archaeological Compound in Egypt unearthed several ancient mummies, and some of them had golden tongues in their mouths — a possible mythological token to the afterlife whose purpose we don’t really understand.

Egypt’s government revealed the discoveries in a Facebook post. Mustafa Waziri, head of the country’s Supreme Council for Archaeology, said the mummies are in a poor state of preservation. Some had golden tongues, while others were covered with thin sheets of gold and others were glazed with gold on the bone under the linen wrap.

Last year, archaeologists found a mummy with a golden tongue while conducting excavations at the temple of Taposiris Magna in western Alexandria. The researchers believe that removing the tongue during embalming and then replacing it with the gold object was common practice so the deceased could speak to Osiris in the afterlife.

Osiris was the god of the afterlife, according to Egyptian mythology. When he was killed, he was hacked into pieces that were spread across Egypt. However, after gathering all the pieces, Isis, his sister and wife, was able to resurrect him. It’s believed that the gold tongue would allow the dead to ask Osiris to show mercy on their souls.
A new discovery

The new discovery was done at the Qwaisana necropolis in the central Nile Delta. The site, originally found in 1989, is believed to have been occupied during the Ptolemaic and Roman periods (from about 300 BCE to 640 CE). The site has three different levels that show different burial habits, likely explained by the toms from different periods.

Gold was a popular material in ancient Egypt, used to make ornaments for funerary rites. The element was considered to be the flesh of the gods, especially the skin of the Sun God, Ra, and was associated with the concept of eternity. Ra was the creator of everything, the leader of all the ancient Egyptian gods, and was closely tied with Osiris.

As well as finding the golden tongues, the researchers discovered the mummies were buried with small gold lotus flowers and golden cockroaches. The flowers were a symbol of creation and rebirth in ancient Egypt, while the cockroaches could have been placed there to ensure elements in a mummy were consumed to be then reborn.

When interpreted together, the flowers, the cockroaches and the tongues refer to the soul’s transformation after it successfully negotiates a stay in the afterlife with the judge and lord Osiris, according to the researchers. However, they said more research still needs to be done, as we are barely scratching the surface of what life was like in Ancient Egypt — rituals like this one are almost a complete unknown.

WAGE THEFT

Juventus' entire board of directors resign in chaotic move 'comparable to 2006'

Jayden Collins

Published  29 November 2022 

Featured Image Credit: SPP Sport Press Photo. / Alamy. FUFA61 / Alamy.

Juventus’ entire board of directors have resigned in a shock move that could be reminiscent of the club’s relegation in 2006.

GOAL reports that president Andrea Agnelli, vice-president Pavel Nedved, and managing director Maurizio Arrivabene have all resigned from the Italian club.

It comes after an extraordinary meeting was held on Monday (November 28) evening where a unanimous decision was made.

Andrea Agnelli, Pavel Nedved and Maurizio Arrivabene. Credit: Nicolò Campo / Alamy

Arrivabene will remain in charge of his administrative duties despite resigning, with the club set to fall into a significant period of transition.

It comes after an investigation arose as a result of Juventus players and then head coach Maurizio Sarri agreeing to cut their salaries throughout the Covid-19 pandemic.However, Italian prosecuting authorities found some irregularities and decided to conduct an investigation into the matter that has led to the resignation.

The Turin prosecutor alleged that the club misrepresented financial losses between 2018 and 2020, investigating the amount ascribed to player sales, according to Daily Mail.

Sky Italia director Federico Ferri appeared on Sky Sport 24 to comment on the situation.

His comments translated to: “What is happening in these hours is totally connected to the story of the Prisma investigation, to the capital gains, to the hypothesis of the false accounting, to Consob findings.

“This is the beginning of a new path: in all probability, indictments are on the way, the lawyers have the trial papers in hand and there are wiretapping papers, of emergency, without going to make comparisons but as a sense of responsibility it is completely comparable to 2006.”

In 2006 Juventus were relegated to Serie B for their involvement in the Calciopoli Scandal that found managing director Luciano Maggi had an exclusive relationship with referee designations.

This allowed him to exert his influence and handpick referees for the matches.

Agnelli had been president of the Old Lady for 12 years and helped Juventus to a decade of dominance in Italy, winning nine consecutive Scudetti.

Nedved gained his seat on the board in 2010 before becoming vice president in 2015.

The club legend was one of the players who stayed with the club when they were relegated to Serie B in 2006.

Arrivabene arrived from Formula 1’s Scuderia Ferrari in 2019, and was appointed the club’s CEO in 2021.

The club confirmed in a press release that a new board of directors would be elected in a scheduled meeting on January 18, 2023.

SPORTbible reached out to Juventus for comment.

Footage of Hawaii volcano eruption captured in  fly-over

Caleb Jones, Nov 29 2022

Waves of orange, glowing lava and smoky ash were filmed by the US Coast Guard as they conducted a fly-over of Hawaii’s Mauna Loa after it erupted for the first time since 1984.

The eruption began on Monday (NZT) in the summit caldera of the volcano on Hawaii’s Big Island, after a series fairly large earthquakes around the volcano.

An “aerial observation flight of the eruption” was conducted after a request from Hawaii’s civil defence agency, a US Coast Guard officer said in a statement.

A C-130 Hercules aircrew conducted the fly-over along with Hawaii Civil Defence Agency, US Geological Survey, and other state and county officials to assess the situation.

READ MORE:
* World's largest active volcano, Hawaii's Mauna Loa, starts to erupt for first time in 38 years

* 5.0 earthquake hits during Hawaii's Mauna Loa volcano unrest

US COAST GUARD
Footage of Hawaii's Mauna Loa after it erupted, captured by the US Coast Guard.

The eruption of the world’s largest active volcano wasn't immediately endangering towns, but the US Geological Survey warned the roughly 200,000 people on the Big Island that an eruption “can be very dynamic, and the location and advance of lava flows can change rapidly”.

Officials told residents to be ready to evacuate if lava flows start heading toward populated areas.

The areas where lava was emerging – the volcano’s summit crater and vents along the volcano’s northeast flank – are both far from homes and communities.

Officials urged the public to stay away from them, given the dangers posed by lava, which is shooting 30 to 60m into the air.

Lifelong Big Island resident Bobby Camara said everyone across the island should keep track of the eruption. He said he’s seen three Mauna Loa eruptions in his lifetime and stressed the need for vigilance.

“I think everybody should be a little bit concerned,'” he said. “We don't know where the flow is going, we don’t know how long it's going to last.”

Gunner Mench, a resident who owns an art gallery, said he awoke shortly after midnight and saw an alert on his phone about the eruption.

Mench and his wife, Ellie, ventured out to film the eerie red glow cast over the island, watching as lava spilled down the volcano's side.

“You could see it spurting up into the air, over the edge of this depression,” Mench said. “Right now it’s just entertainment, but the concern is [it could reach populated areas]”.

Mauna Loa is one of five volcanoes that together make up the Big Island of Hawaii, the southernmost island in the Hawaiian archipelago.

Mauna Loa, rising 4169m above sea level, is the much larger neighbour of Kilauea, which erupted in a residential neighbourhood and destroyed 700 homes in 2018.

Some of Mauna Loa’s slopes are much steeper than Kilauea's, so lava can flow much faster when it erupts. During a 1950 eruption, the mountain’s lava travelled 24km to the ocean in under three hours.

   

  

32% of Canadians unaware standard home insurance policies lack flood protection: Survey 

John Shmuel, Managing Editor, RATESDOTCA

Many Canadian homeowners are woefully unaware of how to protect their homes against water damage, a new survey has found, even as climate change super charges storms in Canada and is leading to a rising number of claims.  

The latest BNN Bloomberg and RATESDOTCA survey, conducted by Leger, found that 32 per cent of homeowners are not aware that standard home insurance policies don’t cover water damage from seepage, overland flooding or sewer backup.  

What most policies do cover is sudden water damage, the sort that comes from burst pipes or appliances that fail, provided these things did not happen out of negligence. This sort of damage is unlikely to be worsened by climate change.  

On the other hand, while companies now offer coverage for overland flooding (something many did not in previous years), many Canadians do not hold this coverage. A full 50 per cent of respondents said they do not have additional water insurance coverage for their property.  

Overland flooding protects you in the event that water from a storm or a river that spills its banks enters your home. Only 13 per cent of respondents said they had seepage coverage in their home insurance policy. While cities in Canada are working to try and mitigate this form of damage, climate change is increasing the likelihood of it happening, with storms that release large volumes of water in a short amount of time becoming more common.  

Similarly, seepage and sewer backup are additional coverages that must be purchased in addition to your base policy. Only 13 per cent said they had seepage coverage, while 25 per cent said they had sewer back up coverage.  Seepage refers to the slow buildup of water, whether through your foundation or from a pipe behind your walls. Sewer backup, which can happen during a storm, refers to water that enters your home from your sewer pipes (which can also happen if your pipes are clogged by debris).  

According to the Insurance Bureau of Canada (IBC), severe weather insurance claims are four times higher than they were 15 years ago nationwide. 

It’s no surprise then that 16 per cent of those surveyed said they have a made a claim for water damage to their home. The overwhelming majority said that their claim was either mostly or fully covered by insurance (94%).  

Most Canadians who own their own home have home insurance, with only 4 per cent of respondents saying they own their home but do not have home insurance.  

METHODOLOGY

An online survey of n=1537 Canadians, out of which n= 878 Canadians who own their home and have home insurance on their home, was completed between November 11th and 13th, 2022 using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e., a web panel in this case). For comparative purposes, though, a probability sample of 878 respondents would have a margin of error of ±3.3%, 19 times out of 20.

------

BNN Bloomberg has teamed up with RATESDOTCA to take the pulse of Canadians every month on key pocketbook issues as we strive to better understand how households are navigating COVID-19. This is the latest instalment in monthly special coverage. 

CRIMINAL CAPITALI$M

CannTrust execs linked to unlicensed growing caused 'incredible' damage, court hears

Tara Deschamps, The Canadian Press

Now Showing

A lawyer representing Ontario's securities regulator says three former executives whose cannabis company was caught growing pot in unlicensed rooms were in positions to disclose the improper growing but didn't. 

Dihim Emami, a lawyer for the Ontario Securities Commission, said in a Toronto court Monday that by not disclosing the unlicensed growing at CannTrust Holdings Inc., Peter Aceto, Eric Paul and Mark Litwin caused "incredible" damage.

The impact on investors alone was "significant, to put it mildly."

"Ultimately, investors rely on the representations that CannTrust made and unfortunately it was to their detriment," said Emami, in his opening statements made at the Ontario court of justice's Old City Hall court. 

The argument was levelled against Aceto, Paul and Litwin, who have pleaded not guilty to a series of securities offences linked to the unlicensed growing at a Niagara, Ont. region facility, including fraud and authorizing, permitting or acquiescing in the commission of an offence.

Litwin and Paul are also facing insider trading charges, and Litwin and Aceto are charged with making a false prospectus and false preliminary prospectus.

The charges against Aceto, Paul and Litwin were laid in June 2021, after a months-long investigation conducted by the OSC and the Royal Canadian Mounted Police. The regulator and RCMP found the men allegedly did not disclose to investors that about 50 per cent of the growing space at the facility was not licensed by Health Canada. 

They allege the men used corporate disclosures to assert Vaughan, Ont.-based CannTrust was compliant with regulations.

They also allege Litwin and Aceto signed off on prospectuses used to raise money in the U.S., which stated CannTrust was fully licensed and compliant with regulatory requirements, and that Litwin and Paul traded shares of CannTrust while aware of the unlicensed growing.

The three men no longer work for CannTrust, which is now called Phoena Holdings Inc.

Aceto was terminated with cause by CannTrust’s board in July 2019, around the same time Paul was ordered to step down. Litwin resigned in March 2021.

Frank Addario, Aceto's lawyer, disagreed with much of Emami's opening statement Monday. 

"Mr. Aceto didn’t hold anything back that he needed to tell the market," he argued.

Addario described how his client joined CannTrust as its chief executive officer in 2018, just as cannabis was about to be legalized. 

Upon starting in the role, he learned that unlike many "fly by night" cannabis companies, CannTrust had a good relationship with regulators and any compliance issues were routinely resolved and "not fatal."

"State of the art" security systems ensured the history of every batch of cannabis could be tracked "from seed to product." Health Canada was given access to facilities, conducting inspections that ended with "favourable compliance reports" on several occasions, Addario added.

He suggested any claims linked to misleading inspectors with photographs and statements are the fault of "low-level" employees, who were in and out of five rooms where unlicensed cannabis was allegedly grown.

He also argued Aceto and his wife's purchase of CannTrust shares just after he became CEO is a "counter indicator" because someone who thought the company was misleading people likely wouldn't invest in the company. 

This report by The Canadian Press was first published Nov. 28, 2022.

CANADA

Federal investment in E3 Lithium will support extraction: CEO

Daniel Johnson , BNN Bloomberg

Shares of E3 Lithium Ltd. jumped Monday morning following an investment announcement from the federal government, where the funds will be used to create materials for batteries, according to the company’s chief executive.

The Government of Canada’s Innovation, Science and Economic Development’s Strategic Innovation Fund (SIF), announced a $27-million investment in the Alberta-based company on Monday.

Chris Doornbos, the president, CEO and director of E3 Lithium, said in an interview with BNN Bloomberg on Monday that the company has significant lithium brine resources in the repurposed Leduc oil field, located near Leduc County, Alta. 

The new funding will be used to create the infrastructure necessary to convert the resource into lithium hydroxide, a material used in batteries, said Doornbos.

“The funding from the federal government is supporting that as well as the technology that we've developed that enables the extraction of lithium from these brines. So it's very exciting for us today,” Doornbos said.

To begin commercial operations, Doornbos said a preliminary economic assessment outlined the need for around US$600 million in capital. The project is expected to produce roughly 20,000 tons of battery-quality lithium hydroxide each year, according to Doornbos.

“We will plan to build a production facility which will sort of break into two pieces. One will be our technology to extract the lithium from the brine. We [will] make the lithium sulphide as mentioned, and then we'll put it through the second piece of the plan which will be a conversion process to make lithium hydroxide.”

Following the investment announcement, Doornbos said the company will work to develop a production facility and complete a pre-feasibility study, which he said it aims to complete in about a year. After this time, the company can look to sign offtake customers, he said.

Doornbos said automotive companies like General Motors Co. and Stellantis are of interest.

“So from our perspective, those are the companies obviously that are here in North America. And so they're good targets for us to have conversations with,” he said. 

Crypto lender BlockFi goes bankrupt in aftermath of FTX

Kevin Simauchi and Hannah Miller, Bloomberg News

Lender BlockFi Inc. filed for bankruptcy, the latest digital-asset firm to collapse in the wake of crypto exchange FTX’s rapid downfall. 

BlockFi said in a statement Monday that it will use the Chapter 11 process to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities,” adding that recoveries are likely to be delayed by FTX’s own bankruptcy. Chapter 11 bankruptcy allows a company to continue operating while working out a plan to repay creditors. 

The petition, filed in New Jersey, lists BlockFi’s assets and liabilities at between US$1 billion and US$10 billion each. The company said in the statement that it had around US$257 million of cash on hand, and is starting an “internal plan to considerably reduce expenses, including labor costs.”

Citing “a lack of clarity” over the status of bankrupt FTX and Alameda Research, the Jersey City, New Jersey-based company earlier halted withdrawals and said it was exploring “all options” with outside advisers.

Following investigations into FTX by the U.S. Securities Exchange Commission and Commodity Futures Trading Commission over potential misuse of customer funds, it became unclear to BlockFi where funding for a credit line from FTX U.S. and collateral on loans to Alameda, which included Robinhood Markets Inc. stock, came from, Bloomberg News reported earlier this month. BlockFi had also been in the process of shifting over its assets over to FTX for custody, but the majority of the assets had not been moved prior to FTX’s collapse. 

FTX U.S. is listed in the company’s petition as one of its top unsecured creditors, with a US$275 million loan.

The company’s largest unsecured creditor, Ankura Trust Company, is owed about US$729 million, according to the petition. Ankura acts as a trustee for BlockFi’s interest-bearing crypto accounts, according to its website.

“BlockFi’s Chapter 11 restructuring underscores significant asset contagion risks associated with the crypto ecosystem, and, potentially, deficient risk management processes,” said Monsur Hussain, senior director of Financial Institutions at Fitch Ratings. He said that that these restructing processes can be “notoriously lengthy” and noted that creditors owed money by Mt. Gox are only getting closer to be paid eight years after the Bitcoin exchange failed. 

BlockFi’s bankruptcy shares similarities with that of FTX, according to Eric Snyder, partner and chairman of the bankruptcy department at law firm Wilk Auslander. He said in an interview that in both filings, the names of many of the key creditors have not been disclosed, which is unusual in a bankruptcy filing. Snyder also said that it will take a while to determine the total amount of money owed to creditors in both cases.   

BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in its early days had backing from influential Wall Street investors like Mike Novogratz and, later on, Valar Ventures, a Peter Thiel-backed venture fund as well as Winklevoss Capital, among others. It made waves in 2019 when it began providing interest-bearing accounts with returns paid in Bitcoin and Ether, with its program attracting millions of dollars in deposits right away. 

The company grew during the pandemic years and had offices in New York, New Jersey, Singapore, Poland and Argentina, according to its website. Co-founder Prince in a March 2021 interview with Bloomberg said BlockFi was using proceeds from a US$350-million funding round to expand into new markets and fund new products. Bain Capital Ventures and Tiger Global were among the investors in the that round.

Originally valued at US$3 billion in March 2021, BlockFi looked to raise money at a reduced valuation of about US$1 billion in June. The firm also faced scrutiny from financial regulators over its interest-bearing accounts and agreed to pay US$100 million in penalties to the SEC and several US states in February. The SEC is listed on the bankruptcy filing as BlockFi’s fourth-largest creditor, with US$30 million owed to the agency.

BlockFi worked with FTX U.S. after it took an US$80 million hit from the bad debt of crypto hedge fund Three Arrows Capital, which imploded after the TerraUSD stablecoin wipeout in May.

The company had significant exposure to the empire of companies founded by former FTX Chief Executive Officer Sam Bankman-Fried. The company received a US$400 million credit line from FTX U.S. in an agreement that also gave the company the option to acquire BlockFi through a bailout orchestrated by Bankman-Fried over the summer. BlockFi also had collateralized loans to Alameda Research, the trading firm co-founded by Bankman-Fried.

The company is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year. 

BlockFi sold about US$239 million of its own cryptocurrency and warned almost 250 workers that they would lose their jobs in the run-up to its bankruptcy filing, court papers show. 

The case is BlockFi Inc., 22-19361, U.S. Bankruptcy Court for the District of New Jersey (Trenton).

The New York Times Is in the Tank for Crypto

There is far too much cheerleading and not nearly enough skeptical reporting.


BY ROBERT KUTTNER
NOVEMBER 28, 2022


JAKUB PORZYCKI/NURPHOTO VIA AP

In a recent post, I noted in passing the oddly soft coverage of the collapse of Sam Bankman-Fried in The New York Times. The Times managed to compare the woes of FTX to a bank run, to blame Bankman-Fried’s competitors for undermining his credibility, and to take his professed charitable intent at face value.

Since I wrote, the Times coverage has only gotten worse.

A piece on the interconnections between Bankman-Fried’s exchange (FTX) and the investment company he controlled (Alameda) soft-pedaled the outright illegality of his making trades with customer funds. To hear the Times tell it, “Alameda’s need for funds to run its trading business was a big reason Mr. Bankman-Fried created FTX in 2019. But the way the two entities were set up meant that trouble in one unit shook up the other as crypto prices began to drop in the spring.”

But that’s not what happened. When customers demanded their money, Fried didn’t have it, because he had been using it and losing it, illegally, for his own trades.

And this: “Alameda’s methods borrowed many aspects from traditional high finance. It was a quantitative trading firm, similar to Wall Street hedge funds that use mathematical models and data to inform decisions. It used ‘leverage’—or borrowed money—to fuel its trades and make bigger returns.”

Note the alibis, and the passive voice. The subhead tells the reader “things got out of control,” as in Nixon’s infamous “mistakes were made.” The comparable Wall Street Journal piece ran rings around the Times version, explaining the interlocks and the sheer illegality.

But the most appalling recent Times piece was their take on SEC Chair Gary Gensler, the one real hero of this whole mess. Gensler was onto the frauds and risks of crypto early, and wise to Bankman-Fried. He was repeatedly lobbied by Bankman-Fried and his allies to lighten up, but to no avail. As our colleague David Dayen wrote on Wednesday, a bipartisan group of members of the House tried to interfere with Gensler’s ongoing investigation.

But to hear the Times tell it, the problem is Gensler. According to the piece, which collects and repeats a medley of inconsistent complaints, Gensler has been both too aggressive and too soft. (“But the collapse of FTX has raised questions about Mr. Gensler’s effectiveness.”) The piece also mischaracterizes Gensler as a onetime enthusiast of crypto, when in fact he was an early skeptic.

The piece even credulously quotes one of the congressmen who sought to interfere with Gensler’s investigations: “‘Reports to my office allege he was helping SBF and FTX work on legal loopholes,’ Representative Tom Emmer, a Minnesota Republican who serves on the House Financial Services Committee, tweeted on Nov. 10 of Mr. Gensler. ‘We’re looking into this.’”

Emmer, who was just elected House majority whip, number three in the GOP leadership, led the letter that tried to get Gensler to back down, in fact. He took $11,600 from FTX employees personally for his campaign, and his work as head of the National Republican Congressional Committee, the election arm of House Republicans, was greatly buoyed by $2.75 million in donations from FTX co-CEO Ryan Salame and the company’s PAC. Emmer, who whined on Twitter about the Prospect’s piece, praised Bankman-Fried a year ago in public testimony, saying, “Sounds like you’re doing a lot to make sure there is no fraud or other manipulation.”

Any of this could have been mentioned in the Times story to give the proper context. None of it was.

If you read the bylines in these several offending pieces, you’ll see that one prime source of the charity toward Bankman-Fried and the hostility to Gensler is a young Times tech writer and cheerleader for crypto named David Yaffe-Bellany. The worst Times pieces are his, though the coverage generally has been too soft.

Yaffe-Bellany wrote the Gensler takedown. Last January, he wrote a piece called “The Rise of the Crypto Mayors,” which should be a major embarrassment to the Times. In it, he touted crypto as a smart way to pay municipal employees. He quoted one gung-ho mayor, Francis Suarez of Miami, as whacking Gensler for not getting with the program.

Yaffe-Bellany is just one writer on a large business staff. Like a lot of tech enthusiasts, he’s just a few years out of school. He was managing editor of the Yale Daily News, and graduated in 2018.

But writers presumably have editors. Why wasn’t some adult at the Times paying attention to the spin?

FTX Donated $1 Million to a Super-PAC Linked to Mitch McConnell in October

Bill Allison, Bloomberg News

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022. Crypto exchange FTX US is expanding its no-fee stock trading service to all US users, including non-crypto investors, in a move to expand its customer base and increase assets under custody. , Bloomberg

(Bloomberg) -- FTX US, a part of Sam Bankman-Fried’s crypto empire that catered to American customers, contributed to a super-PAC fighting for control of the Senate in the midterm election just days before the company’s collapse. 

The Senate Leadership Fund, which is aligned with Senate Republican Leader Mitch McConnell and was the top spender in the 2022 midterms, received the $1 million donation on Oct. 27, according to its most recent filing with the Federal Election Commission. Only a couple of weeks later, more than a 100 FTX-related companies, including the US arm, filed for bankruptcy, and Bankman-Fried resigned as head of the corporate group. 

The contributor listed on the FEC donation report is West Realm Shires Services Inc. and FTX US is its commercial name. 

The Senate Leadership Fund did not immediately respond to a request for comment. The super-PAC spent $239 million in the midterms on behalf of Republican candidates, according to OpenSecrets, which tracks money in politics.  

While several members of Congress, including Illinois Senator Richard Durbin, a Democrat, and Republican Representative Kevin Hern of Oklahoma have said they would return donations from FTX executives or give the money to charities, there isn’t a requirement in election law for committees to return donations to companies that go bankrupt.

FTX US also gave $750,000 to the Congressional Leadership Fund and $150,000 to the American Patriots PAC, both of which supported House Republican candidates. It gave $100,000 to the Alabama Conservatives Fund, which backed Republican Katie Britt’s successful run for the state’s open Senate seat.

Individual executives at the broader FTX company have given far more money. Bankman-Fried emerged as major donor to Democratic candidates leading up to the Nov. 8 midterm elections, donating most of the $39.4 million that he gave to them, FEC records show. One of his top lieutenants, Ryan Salame, gave $23.6 million -- mostly to Republicans.

As Congress weighs bills that would regulate digital currencies, the crypto industry became a major player in the 2022 election cycle, with industry players donating $84.1 million through mid-October. But most of that amount, some 84%, came from Bankman-Fried and other FTX executives. Committees in the House and Senate have scheduled hearings next month on the firm’s collapse, with Bankman-Fried as a potential witness.

--With assistance from Allyson Versprille.

©2022 Bloomberg L.P.

Dr. Fauci defends China from blame for COVID-19 pandemic — but takes shot at Trump for 'anti-China approach'

CHRIS ENLOE

November 28, 2022

Dr. Anthony Fauci was confronted on Sunday about communist China's alleged cover-up of the COVID-19 pandemic origins.

The director of the National Institute of Allergy and Infectious Diseases and chief medical adviser to President Joe Biden responded by taking a shot at the Trump administration.

What did Fauci say?

Speaking on CBS' "Face the Nation," Fauci seemingly defended China's refusal to be transparent, even apparently justifying it because the Chinese are "suspicious" of anyone trying to blame them for the pandemic.

"The Chinese — not necessarily the scientists that we know and we have dealt with and collaborated with productively for decades — but the whole establishment ... even when there's nothing at all to hide, they act secretive, which absolutely triggers an appropriate suspicion," Fauci said.

But he quickly dismissed the possibility that COVID-19 was anything but a "natural occurrence."

"If you look at the examination by highly qualified international scientists, with no political agendas, they've published in peer-reviewed journals that the evidence is quite strong that this is a natural occurrence," Fauci said.

To uncover the origins of COVID-19, then, Fauci said there must be collaboration between China and the rest of the world in a "non-accusatory way," which was a clear shot at former President Donald Trump, who vocally blamed China for the pandemic.

"What happens is that if you look at the anti-China approach that clearly the Trump administration had right from the very beginning, and the accusatory nature," Fauci said, "the Chinese, they're going to flinch back and say, 'No, I'm sorry, we're not going to talk to you about it,' which is not correct."

When host Margaret Brennan noted the Chinese are not cooperating with the Biden administration either — thus suggesting their lack of transparency is not rooted in Trump's "accusatory nature" — Fauci doubled down on his claims.

"I think that horse is out of the barn and they're very suspicious of anybody trying to accuse them," he said.

What else did he say?

In another interview on NBC's "Meet the Press," Fauci was more explicit in denying that China is to blame.

"I don't mean this in a broad pejorative way, but in anything that we've had to do over decades — whether it's bird flu, H5N1, H7N9, or the original SARS in 2002 — even when there's nothing to hide, [the Chinese government] act in a suspicious, non-transparent way just probably because they don't want to make it look like there's a blame," Fauci said.

"When the reality is, if something evolves in your country, it’s not to blame, but let's find out what went on so we can be transparent about it and prevent it for the next time happening," he added.

'Not going to happen': Dr. Fauci mocks

Rand Paul's threats after Republicans

lose the Senate

David Edwards
November 27, 2022

Dr. Anthony Fauci outs Rand Paul for profiting off of attacking him (Photo: Screen capture)

Dr. Anthony Fauci noted that Sen. Rand Paul (R-KY) will never be able to follow through with his promise to chair hearings about the pandemic response because Republicans did not gain control of the Senate in the midterm elections.

"There have been all these House Republican calls for investigations into the origins of COVID and saying they're gonna bring you up to Capitol Hill," CBS host Margaret Brennan told Fauci in an interview that aired on Sunday. "Do you think that wanes as you step down?"

"Well, I don't think it's gonna wane for me because they're already saying, the Republicans, that had they won the Senate, they would be bringing me before the committee that Rand Paul would likely be chairing," Fauci said.

"That's not going to happen because the Senate is not in the Republican control. But the Republican House has said that they're going to and that's fine with me," he added. "I'm very much in favor of- of legitimate oversight. Absolutely. I mean, I've testified before Congress, given the 38 years that I've been director, literally hundreds of times, in many oversight hearings."

Watch the video below from CBS or at the link.