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When members of the Federal Reserve make public statements, investors tend to listen. Over the past two decades, central bankers have consistently shared key information about the future trajectory of important inputs like interest rates. The Fed’s forward guidance on interest rates amid historic inflation has taken stock markets for a ride in 2022. As investors wait for a pivot, a panel of experts explains why many in the market choose not to fight the Fed.
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On the same day that that the Bahamas extradited FTX co-founder and former CEO Sam Bankman-Fried to the U.S. to face criminal charges, two former executives at FTX and Alameda Research pleaded guilty Wednesday to federal fraud charges.
Caroline Ellison, 28, the former chief executive of Alameda Research — the crypto trading company founded by Bankman-Fried — and Zixiao (Gary) Wang, 29, co-founder of crypto platform FTX and its former chief technology officer, were charged for their roles in contributing to the crypto platform’s collapse.
The pair each faced decades-long prison sentences if convicted, and pleaded guilty to charges that included wire fraud, securities fraud and commodities fraud in exchange for leniency. In a video Wednesday night, U.S. Attorney Damian Williams of the Southern District of New York said both were cooperating in the continuing investigation into FTX and Bankman-Fried.
Williams added that Bankman-Fried, 30, was in FBI custody and will appear in court in “as soon as possible,” and suggested more charges in the FTX case could be forthcoming.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams said. “We are moving quickly and our patience is not eternal. … and we are far from done.”
In a parallel action, the Securities and Exchange Commission on Wednesday also charged Ellison and Wang “for their roles in a multiyear scheme to defraud equity investors in FTX.”
According to the SEC complaint, Ellison helped manipulate the price of FTX-issued crypto token FTT, which served as collateral for undisclosed loans from FTX customers’ assets to Alameda. In addition, the SEC alleges Bankman-Fried misled customers by falsely claiming FTX was a safe trading platform with strict risk-mitigation measures.
The SEC claims Wang created software code to allow Alameda to divert FTX customers’ funds, and that Ellison used those funds for Alameda’s trading activity.
“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” SEC Chair Gary Gensler said in a statement. “We further allege that Ms. Ellison and Mr. Wang played an active role in a scheme to misuse FTX customer assets to prop up Alameda and to post collateral for margin trading. When FTT and the rest of the house of cards collapsed, Mr. Bankman-Fried, Ms. Ellison, and Mr. Wang left investors holding the bag. Until crypto platforms comply with time-tested securities laws, risks to investors will persist. It remains a priority of the SEC to use all of our available tools to bring the industry into compliance.”
Bankman-Fried was arrested in the Bahamas last week after he was indicted by U.S. federal prosecutors, who allege he played a key role in the collapse of FTX, diverting billions of dollars of customer assets and defrauding investors, customers and lenders.
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NASSAU, Bahamas — Bahamian authorities said Wednesday that former FTX CEO Sam Bankman-Fried has been extradited to the United States, where he faces criminal charges related to the collapse of the cryptocurrency exchange.
Bahamas’s attorney general’s office said that Bankman-Fried would be leaving for the United States later Wednesday, noting he had waived his right to challenge the extradition.
Reporters on the scene witnessed Bankman-Fried leaving a Magistrate Court in Nassau in a dark SUV earlier Wednesday. The vehicle was later seen arriving at a private airfield by Nassau’s airport, from which he is expected to be flown to the United States. He is due to land in New York and will likely appear in front of a U.S. judge on Thursday.
“The Bahamas has determined that the provisional arrest, and subsequent written consent by (Bankman-Fried) to be extradited without formal extradition proceedings satisfies the requirements of the (extradition treaty between the U.S. and the Bahamas) and our nation’s Extradition Act,” said Bahamian Attorney General Ryan Pinder, in a statement.
Bahamian authorities arrested Bankman-Fried last week at the request of the U.S. government. U.S. prosecutors allege he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and his family.
The 30-year-old could potentially spend the rest of his life in jail.
Bankman-Fried was denied bail Friday after a Bahamian judge ruled that he posed a flight risk. The founder and former CEO of FTX, once worth tens of billions of dollars on paper, had been held in the Bahamas’ Fox Hill prison, which has been has been cited by human rights activists as having poor sanitation and as being infested with rats and insects.
Once he’s back in the U.S., Bankman-Fried’s attorney will be able to request that he be released on bail.
Bankman-Fried was one of the world’s wealthiest people on paper, with an estimated net worth of $32 billion. He was a prominent personality in Washington, donating millions of dollars toward mostly left-leaning political causes and Democratic political campaigns. FTX grew to become the second-largest cryptocurrency exchange in the world.
He has said that he did not “knowingly” misuse customers’ funds, and said he believes his millions of angry customers will eventually be made whole.
At a congressional hearing last week, the new FTX CEO John Ray III, who is tasked with taking the company through bankruptcy, bluntly disputed those assertions: “We will never get all these assets back,” Ray said.
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The collapse of FTX has sent shockwaves through the cryptocurrency industry. The price of bitcoin and other major digital coins have fallen sharply as problems at FTX emerged.
Jakub Porzycki | Nurphoto | Getty Images
There are “no signs of spillover” from cryptocurrency into more traditional assets, according to an investment analyst from AJ Bell.
Billions of dollars were lost when the exchange FTX collapsed, raising questions about whether movements in the crypto sphere could ricochet through to other financial systems.
“Crypto has a lot of money but it’s kind of built up as a separate ecosystem,” head of investment analysis Laith Khalaf said on “Squawk Box Europe” Wednesday.
But that doesn’t necessarily mean there couldn’t be some overlap in the future.
“If we had a more system-wide issue you could start see it affecting other assets,” Khalaf said, “but I don’t really see that,” he added.
In two separate court filings, FTX’s lawyers said in November that it likely had more than 1 million creditors, and owes its top 50 unsecured creditors $3.1 billion.
The founder and former CEO of the exchange, Sam Bankman-Fried, was then charged with defrauding investors Tuesday after being arrested Monday.
Khalaf was reluctant to make predictions as to where cryptocurrency will go next because it’s so changeable as an asset.
“We could be sitting here talking this time next year and [Bitcoin] could be at $5,000 or $50,000. It just wouldn’t surprise me because the market is so heavily driven by sentiment,” Khalaf said.
And while there are questions as to the long-term adoption of cryptocurrency, Khalaf made one point with a lot of certainty.
“For the foreseeable, [cryptocurrency] remains highly volatile and speculative asset,” he said.
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President of the European Central Bank Christine Lagarde attends a hearing of the Committee on Economic and Monetary Affairs in the European Parliament on November 28, 2022 in Brussels, Belgium.
Thierry Monasse | Getty Images News | Getty Images
The European Central Bank opted for a smaller rate hike at its Thursday meeting, taking its key rate from 1.5% to 2%.
It also said that from the beginning of March 2023 it would begin to reduce its balance sheet by 15 billion euros ($16 billion) per month on average until the end of the second quarter of 2023.
It said it would announce more details about the reduction of its asset purchase program (APP) holdings in February, and that it would regularly reassess the pace of decline to ensure it was consistent with its monetary policy strategy.
The widely-expected 50 basis point rate rise is the central bank’s fourth increase this year.
It hiked by 75 basis points in October and September and by 50 basis points in July, bringing rates out of negative territory for the first time since 2014.
“The Governing Council judges that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target,” the ECB said in a statement.
“We have more ground to cover … we are in a long game,” ECB President Christine Lagarde said in a press conference following the announcement.
The euro rose from a 0.5% loss against the dollar to a 0.4% gain following the announcement, but European equities in the Stoxx 600 index plunged 2.4%.
The central bank said it was working on inflation forecasts that had been “significantly revised up,” and sees inflation remaining above its 2% target until 2025.
It now expects average inflation of 8.4% in 2022, 6.3% in 2023, 3.4% in 2024 and 2.3% in 2025.
However, it sees a recession in the region being “relatively short-lived and shallow.”
It comes after the latest inflation data for the euro zone showed a slight slow in price rises in November, although the rate remains at 10% annually.
Lagarde told CNBC’s Annette Weisbach during the press conference: “One of the key messages, in addition to the hike, is the indication that not only will we raise interest rates further, which we had said before, but that today we judged that interest rates will still have to rise significantly, at a steady place.”
“It is pretty much obvious that on the basis of the data that we have at the moment, significant rise at a steady pace means we should have to raise interest rates at a 50 basis point pace for a period of time,” she said.
Regarding the announcement on quantitative tightening, she said the ECB wanted to follow the principles of being predictable and measured.
The central bank’s decision to make on average 15 billion euro reductions in its APP over four months represents roughly half the redemptions over that period of time, and was based on advice from its market team and all central banks and other officials involved in its decision making, Lagarde explained.
“It seemed an appropriate number in order to normalize our balance sheet, bearing in mind that the key tool is the interest rate,” she said.
The U.S. Federal Reserve on Wednesday increased its main rate by 0.5 percentage points, as did the Bank of England and Swiss National Bank on Thursday morning.
“In contrast to the Bank of England, this is a hawkish hike, given the language on [quantitative tightening] and a definitive start date,” said analysts at BMO Capital Markets.
However, they noted the ECB was lagging other central banks in reducing its balance sheet and that reinvestments under its pandemic emergency purchase program would continue.
“The language in the statement has an operational feel to it, and the Bank is leaving the path of QT open-ended,” they wrote in a note.
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WASHINGTON — Sam Bankman-Fried, founder and former CEO of the failed cryptocurrency exchange FTX, helped 1,500 Bahamian investors remove $100 million from their accounts while other customers around the world were locked out of the exchange, according to the company’s new CEO, who testified before a House committee Tuesday
FTX CEO John Ray III, who has guided dozens of companies, including Enron, through bankruptcy restructuring, called FTX’s collapse one of the worst business failures he has seen — a “paperless bankruptcy,” fueled by an “unprecedented lack of documentation.”
For nearly four hours, without a break, Ray told lawmakers about the lack of oversight and financial controls that he discovered since taking over FTX a month ago. He found a loan where Bankman-Fried was both the issuer and the recipient. There were expenses approved by emoji. FTX didn’t have accountants. For record-keeping, employees used QuickBooks, pre-packaged software typically used by small and medium-sized businesses, to manage FTX’s finances.
“Nothing against QuickBooks,” Ray said. “It’s a very nice tool, just not for a multibillion-dollar company.”
At its peak, FTX’s market value topped $30 billion.
Notably absent from the hearing before the House Financial Services Committee was Bankman-Fried, who was arrested in the Bahamas just hours before he was scheduled to testify. The arrest was made at the request of the U.S. government, which on Tuesday announced criminal charges against Bankman-Fried including wire fraud and money laundering.
The timing of Bankman-Fried’s arrest frustrated many committee members. Republican Rep. William Timmons, of South Carolina, called the timing “bizarre” and added that, as a former prosecutor, he couldn’t imagine why any prosecutor wouldn’t want “hours of congressional grilling for the target of an investigation” to help make a case.
FTX filed for bankruptcy protection on Nov. 11, when the firm ran out of money after the cryptocurrency equivalent of a bank run. The collapse of crypto’s second-largest exchange has garnered worldwide attention, and prompted worries in the crypto industry that the pain could become widespread. Ray estimated that about $8 billion of customer funds are missing.
Some customers in the Bahamas, where FTX was based, were able to recover some money, Ray said. That’s because the Bahamian government and Bankman-Fried agreed to let them get their money out of FTX while customers in other countries were blocked from doing so, Ray said.
Ray, who took over FTX on Nov. 11, told the committee that the problems at FTX were a cumulation of months or even years of bad decisions and poor financial controls.
“This is not something that happened overnight or in a context of a week,” he said.
However, Ray didn’t answer numerous questions about what regulations could have stopped the collapse of FTX. Instead, he focused on how unusual FTX was — having no board of directors, having no real structure that prohibited money invested by consumers in FTX to be shifted to Bankman-Fried’s hedge fund Alameda Research for other investments or lavish purchases, without the original investors’ knowledge.
In his prepared remarks, Ray painted a picture of a company acting with little to no oversight.
“FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray said.
In interviews since FTX filed for bankruptcy protection, Bankman-Fried acknowledged that the company lacked proper financial controls and corporate governance, but denied any fraud had been committed.
U.S. prosecutors and financial regulators disagreed with that assessment. An indictment unsealed Tuesday charged Bankman-Fried with a host of financial crimes and campaign finance violations, alleging he played a central role in the rapid collapse of FTX and hid its problems from the public and investors. The Securities and Exchange Commission said Bankman-Fried illegally used investors’ money to buy real estate on behalf of himself and family.
Ray’s comments supported those allegations.
“This is just old fashion embezzlement, taking money from others and using it for your own purposes,” he said. “This is not sophisticated at all.”
A lawyer for Bankman-Fried, Mark S. Cohen, said Tuesday he is “reviewing the charges with his legal team and considering all of his legal options.”
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Reporter Ken Sweet contributed.
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Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, which faced a colossal collapse this year, was arrested in the Bahamas on Monday, and is facing criminal charges in the United States, according to a Bahamian official.
The Attorney General of the Bahamas, through spokesman Latrae Rahming, posted a statement on Twitter detailing the arrest. Bankman-Fried, commonly known as SBF, lives in the Bahamas, where the cryptocurrency exchange was also based.
“SBF’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition,” the statement reads.
The U.S. Attorney for the Southern District of New York later tweeted that his office had filed a sealed indictment, which led to the arrest.
“We expect to move to unseal the indictment in the morning and will have more to say at that time,” Damian Williams said in a tweet from the office’s official Twitter account.
The Securities and Exchange Commission and the Justice Department are investigating the company, and the New York Times reported last week that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of cryptocurrencies TerraUSD and Luna to benefit FTX and his Alameda hedge fund. The former chief executive of FTX was expected to testify remotely in front of a House Financial Services Committee panel on Tuesday.
FTX, one of the largest cryptocurrency exchanges in the world, filed for bankruptcy protection in November, and Bankman-Fried resigned as CEO. The new CEO of FTX, John J. Ray III, is expected to testify in front of members of Congress on Tuesday, and in prepared remarks released Monday, he said that Bankman-Fried’s management of FTX was an “utter failure” that lacked any level of financial control.
MarketWatch staff writer Robert Schroeder contributed to this article.
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CAIRO — Iran’s currency fell to a record low against the dollar on Sunday, with nationwide anti-government protests now in their third month. A breakdown in negotiations to restore Tehran’s nuclear deal has also hurt the value of the rial.
Traders in Tehran were exchanging the rial at around 370,000 to the dollar on Sunday, up from 368,000 on Thursday. Iran’s currency was trading at 32,000 rials to the dollar at the time of the 2015 nuclear accord that dropped international sanctions in exchange for tight controls on Iran’s nuclear program.
Iran has been gripped by nationwide protests since September. Demonstrations broke out following the death of 22-year-old Mahsa Amini in the custody of the country’s morality police. She was detained by the force for allegedly violating the Islamic Republic’s strict dress code for women. The status of the morality police remains unclear after Iran’s chief prosecutor, Mohamed Jafar Montazeri, said last week that the force had ‘’closed down.” Iranian state media has distanced itself from Montazeri’s claim.
Protesters have focused much of their anger on the country’s heavy-handed policing and the deep-rooted power of its Islamic clergy. But the poor state of Iran’s economy is also another factor driving the protests, with soaring prices, high unemployment and corruption a common complaint among protesters.
Iran’s government for months has been trying to argue that foreign nations are driving the unrest but has offered no evidence to support this claim.
So far, at least 485 people have been killed and over 18,200 others arrested in the protests and the violent security force crackdown that followed, according to Human Rights Activists in Iran, a group monitoring the demonstrations. On Friday, Iran said it executed the first person convicted of a crime allegedly committed during the protests. At least 12 other protesters have been handed death sentences by Iranian courts since the demonstrations began, according to data recorded by HRNA.
Efforts to revive Iran’s nuclear deal stalled months ago. The United States and European Union have since imposed further sanctions on Tehran for its crackdown on the demonstrators and its decision to supply Russia with hundreds of drones for its war against Ukraine.
Last week, Iran began construction on a new power plant. Last month, Iranian authorities said they had begun producing enriched uranium at 60% purity, one short, technical step away from weapons-grade levels of 90%.
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“Investors are underpricing the robustness of the potential recovery over the next couple of months.
Kathy Lien
BK Asset Management
“We’re just beginning to see the recovery in the currency,” Kathy Lien, managing director of FX strategy at BK Asset Management told CNBC’s “Street Signs Asia” on Thursday. She said the Chinese currency could strengthen even further to 6.8 against the U.S. dollar.
The currency weakened past 7.3 against the greenback in early November, its weakest since January 2008. However, it quickly recovered to 6.96 within about a month as Chinese health authorities continued to announce further easing measures.
“Investors are underpricing the robustness of the potential recovery over the next couple of months,” Lien told CNBC, ahead of the scheduled release of a slew of Chinese economic data next week, which includes industrial production and retail sales.
“We’re going to see what is depressed Chinese data, turn into what is more consistent upside surprises,” she said. “That will renew the demand for the Chinese yuan and drive the yuan even higher than it is right now.”
China’s pivot away from its zero-Covid policy has played an important part in optimism about its recovery.
Beijing has been rolling back the restrictions “pretty quickly,” and the surge in demand for the yuan comes with a sooner-than-expected easing measures, Lien said.
HSBC’s chief economist for greater China Jing Liu said the lifting of restrictions will boost growth further.
“The enhanced relaxation of COVID-19 measures, together with more proactive fiscal and accommodative monetary policies, may help to engineer growth of above 5% in 2023,” she said, adding that the latest adjustments in policy will “pave way for further relaxations.”
Woman holds Chinese Yuan banknotes in this illustration taken May 30, 2022.
Dado Ruvic | Reuters
Lien of BK Asset Management said clarity in China’s health measures going forward is what could drive investors back to the Chinese market.
“There was a lot of uncertainty over the past months, particularly over the past couple of weeks, about how China would handle the protests,” Lien said.
“A lot of businesses have started to rethink their plans and I think everyone anticipated a longer period of zero-Covid policy,” she added.
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FTX founder Sam Bankman-Fried is being investigated by federal prosecutors over whether he manipulated prices of two cryptocurrencies to benefit his companies, according to a new report, and has also been ordered to testify before a Senate committee about the collapse of his crypto platform.
The New York Times reported Wednesday night that Manhattan-based federal prosecutors are investigating whether Bankman-Fried steered prices of TerraUSD and Luna to benefit FTX and his Alameda hedge fund. Terra and Luna saw more than $50 billion in market value wiped out when they collapsed in May. That contributed to a wider crypto crash, and eventually the implosion of FTX.
The Times reported the probe is in its early stages, and is part of a wider investigation into FTX’s collapse and the potential misappropriation of billions of dollars of customers’ funds, which are now missing. Additionally, the Times confirmed a November Bloomberg report that FTX was also being investigated for potentially violating U.S. money-laundering laws months before FTX’s collapse.
FTX, once one of the world’s largest cryptocurrency exchanges, collapsed and filed for Chapter 11 bankruptcy protection in November after running into liquidity issues. Bankman-Fried resigned as CEO, and saw his personal fortune of about $23 billion all but evaporate. About $8 billion remains missing from FTX’s balance sheet; Bankman-Fried said in a Bloomberg interview the funds were “misaccounted,”
Separately, the Senate Banking Committee late Wednesday ordered Bankman-Fried to testify about the collapse of FTX on Dec. 14, and said it is prepared to issue a subpoena if he does not voluntarily agree to comply by the end of the day Thursday.
“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry. The American people need answers about Sam Bankman-Fried’s misconduct at FTX,” Sens. Sherrod Brown, D-Ohio, and Pat Toomey, R-Pa., said in a statement.
“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators said in a letter to Bankman-Fried.
On Tuesday, Binance Chief Executive Changpeng Zhao called Bankman-Fried a “master manipulator” and “one of the greatest fraudsters in history.”
Read more: Coinbase CEO Brian Armstrong says it’s ‘baffling’ that Sam Bankman-Fried isn’t in custody
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Sam Bankman-Fried opened up his wallet to Washington in a big way during the 2022 election cycle, donating about $40 million publicly.
So which politicians got money from the founder and former CEO of collapsed cryptocurrency exchange FTX?
MarketWatch has compiled an interactive list below of the candidates and committees who received funds from Bankman-Fried based on the latest disclosures to the Federal Election Commission.
Overall, he gave almost all of the $40 million to Democratic politicians or groups, and just over $200,000 to Republicans, according to the disclosures.
In a wide-ranging interview at the New York Times Dealbook Summit last week, Bankman-Fried said donations were made to candidates who voiced support for pandemic prevention.
At least two Democratic senators received over $20,000 each from Bankman-Fried through joint political action committees tied to their candidacies. Those are Michigan’s Debbie Stabenow and New Hampshire’s Maggie Hassan. New York Democratic Sen. Kirsten Gillibrand got at least $10,000. Gillibrand is the co-sponsor of a crypto bill that would have the Commodity Futures Trading Commission oversee bitcoin, ether and most other digital assets and give a secondary regulatory role to the Securities and Exchange Commission.
In the wake of FTX’s collapse, politicians have been saying they will donate or have donated the money that they received from SBF to charities or other groups, or they’re giving it back.
Gillibrand spokesman Evan Lukaske said the senator donated her funds to Ariva Inc., a Bronx-based nonprofit that offers free financial counseling. Stabenow, whose own bill empowering the CFTC to regulate crypto was backed by Bankman-Fried, plans to donate the contributions to a local charity. A representative for Sen. Hassan did not respond to requests for comment.
Related: ‘Bedazzled by money’: Democratic ties to Sam Bankman-Fried under scrutiny after FTX collapse
While 50 Democratic House and Senate candidates received donations, only eight Republican Senate candidates received money from the former CEO.
SBF — known for being a Democratic megadonor — has claimed he made contributions that don’t show up in FEC disclosures. He told video blogger Tiffany Fong that he donated as much to Republicans as he did to Democrats, but the GOP donations were “dark-money” contributions, making his claim difficult to verify. Such secret contributions, allowed by the Supreme Court’s 2010 Citizens United ruling, wouldn’t show up in the FEC disclosures used to compile MarketWatch’s list.
Another FTX exec, Ryan Salame, became known as a Republican megadonor earlier this year, with a MarketWatch analysis in October finding that he publicly gave about $17 million to GOP groups.
Use our interactive below to search through donations as reported to the FEC.
Donations also filtered into committees associated with Bankman-Fried himself — Guarding Against Pandemics and GMI PAC.
MarketWatch’s Victor Reklaitis contributed to this story.
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Hedge-fund titan Bill Ackman appears to be walking back comments he made via Twitter last week about Sam Bankman-Fried that some interpreted as implicit support for the 30-something who presided over one of the most epic bankruptcies in financial markets in recent memory.
Last week, Ackman tweeted that Bankman-Fried’s statements made during a widely watched interview, streamed to New York from the crypto founder’s location in the Bahamas, was “believable.”
“Many have interpreted my tweet to mean that I am defending SBF or somehow supporting him. Nothing could be further from the truth,” Ackman wrote Saturday, referring to Bankman-Fried by his initials SBF.
Ackman went on to describe the implosion of Bankman-Fried’s crypto exchange FTX, and some of its associated businesses, as “at a minimum, the most egregious, large-scale case of business gross negligence that I have observed in my career.”
Check out: The Sam Bankman-Fried roadshow rolls on: 10 crazy things the FTX founder has just said
Ackman, who is the chief executive of Pershing Square Capital, a prominent investor in traditional markets, and an advocate of crypto, last week, tweeted this message following the widely watched interview of Bankman-Fried at the New York Times Dealbook Summit:
“Call me crazy, but I think SBF is telling the truth.”
Ackman has been chastised by some for seemingly offering verbal succor to a person who some have accused of, at the least, an epic mismanagement of client assets.
Speaking against the wishes of his lawyers, Bankman-Fried on Wednesday, during the Dealbook interview, admitted to making mistakes but said that he never intended to mingle client funds with those of the firm to make leveraged bets on crypto via hedge fund Alameda Research, which he founded before he started FTX.
“I didn’t know exactly what was going on,” Bankman said at the time.
At least one response to Ackman’s Saturday tweet, questioned whether the hedge funder might be responding to blowback from his own clients.
It isn’t the first time that Ackman has cast Bankman-Fried’s actions in a positive light. As the implosion of FTX was unfolding, Ackman said, in a now-deleted tweet, that he’d never before seen a CEO take responsibility as the crypto exchange operator did and that he wanted to give him “credit” for his actions. “It reflects well on him and the possibility of a more favorable outcome” for FTX, he wrote.
On Saturday, one Twitter user asked Ackman if had any ties to Bankman-Fried, which the investor bluntly said he doesn’t.
Bankman-Fried had been viewed as a financial darling inside and outside the crypto industry until his empire collapsed on Nov. 11 and it was revealed that affiliated hedge fund Alameda lost billions in FTX client money in leveraged crypto bets.
John Ray, the new chief executive of FTX, in a filing to the U.S. Bankruptcy Court for the District of Delaware, described the state of the crypto platform “as a complete failure of corporate controls and such a complete absence of trustworthy financial information.”
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NEW YORK — Stocks are wavering in early trading on Wall Street ahead of a speech by Jerome Powell, the chair of the Federal Reserve, on the outlook for the economy and inflation. Treasury yields were higher and crude oil prices rose. The S&P 500 index was hovering around the breakeven line after the first few minutes of trading Wednesday. The tech-heavy Nasdaq was up 0.3% and the Dow Jones Industrial Average fell 0.2%. European markets were trading higher and Asian markets closed mixed overnight. The yield on the 10-year Treasury note, which influences mortgage rates, rose to 3.77%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. markets are flat ahead of a highly anticipated that may give clues about future interest rate hikes.
On the last trading day of the month, futures for the Dow Jones industrials and the S&P 500 appeared static. Major U.S. indices are clinging to small gains in November, which if they hold, would be the second straight month of advances after a miserable September.
There is hope on Wall Street that the Fed will slow the scale and pace of its interest rate hikes and investors are closely watching the latest data on inflation, consumer spending and the employment market. They’ll be looking for any signs of a shift in policy when Powell speaks at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday.
The Fed’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.
The U.S. government will be releasing several reports about the labor market this week. A report about job openings and labor turnover for October will be released Wednesday, followed by a weekly unemployment claims report Thursday. The closely watched monthly report on the job market will be released on Friday.
Investors were also keeping tabs on China, where protests have erupted over the “zero-COVID” strategy that has confined millions of people to their homes, sometimes for months.
China has eased some controls after demonstrations in at least eight mainland cities and Hong Kong. It’s unclear if protests will start up again after authorities detained an unknown number of people and stepped up surveillance.
Renewed restrictions on businesses and other activity have hit manufacturing, with an official survey announced Wednesday showing the purchasing managers index falling to 48.0 in November from 49.2 the month before. The index is on a scale of 0 to 100 where readings 50 and above show expansion.
“A further fall in the new orders and new export orders indices suggests this was largely driven by weakening domestic and foreign demand,” Capital Economics said in a report. “Today’s surveys suggest that intensified virus disruption has delivered another blow to the economy this month.”
Japan’s benchmark Nikkei 225 lost 0.2% to finish at 27,968.99 after reports said industrial production contracted 2.6% in October, compared with 1.7% in September, amid weakening demand from China and other world markets.
Other regional markets advanced.
Hong Kong’s Hang Seng added 2.1% to 18,584.49. The Shanghai Composite index inched up less than 0.1% to 3,151.34. Australia’s S&P/ASX 200 rose 0.4% to 7,284.20, while South Korea’s Kospi rose 1.6% to 2,472.53.
“Due to a more reflective approach to the recent zero-COVID measures, Chinese stocks have taken substantial leaps and bounds this week. However, that optimism is giving way to hawkish contemplation as traders twiddle their thumbs awaiting a speech from Federal Reserve Chair Jerome Powell later Wednesday,” Stephen Innes, a managing partner at SPI Asset Management, said in a report.
Shares in Europe climbed higher at midday after a report showed that inflation in the 19 countries that use the euro currency eased for the first time in more than a year as energy prices retreated from painful highs. But the 10% rate, a drop from 10.6% in October, still hovers near a record that has robbed consumers of their spending power and led economists to predict a recession.
Britain’s FTSE 100 and France’s CAC 40 each added 0.8%, while Germany’s DAX gained 0.4%.
In energy trading, benchmark U.S. crude gained $1.67 to $79.87 a barrel. Brent crude, the international standard, added $1.72 to $85.97 a barrel.
In currency trading, the U.S. dollar rose to 138.72 Japanese yen from 138.65 yen. The euro cost $1.0365, up from $1.0331.
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Kageyama reported from Tokyo; Ott reported from Washington.
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SAN SALVADOR, El Salvador — El Salvador’s government announced Tuesday that it will make a second buyback of its sovereign debt bonds maturing in 2023 and 2025 as it tries to calm market concerns that it could default on its debt.
The government set the maximum for the repurchase at $74 million. The 2023 and 2025 bond offerings were $800 million each.
In September, the government bought back $565 million of those bonds.
President Nayib Bukele said via Twitter that the September repurchase “was so successful that we have decided to launch ANOTHER OFFER for the remainder of the 2023 and 2025 bonds.”
The debt was issued by previous administrations in 1999 and 2004.
El Salvador last year became the first country to make the cryptocurrency bitcoin legal tender, drawing criticism from international lenders. The International Monetary Fund asked the government to reverse that decision, but Bukele dismissed the request and said the country would issue bonds denominated in bitcoin, something that has still not happened a year later.
Bukele’s government has also invested heavily in bitcoin, which has since plummeted in value.
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Just hours after filing for Chapter 11 bankruptcy in New Jersey on Monday, cryptocurrency lender BlockFi filed a lawsuit against a holding company by FTX founder Sam Bankman-Fried over his shares in trading platform Robinhood, the Financial Times reported.
The suit was filed against Bankman-Fried’s vehicle Emergent Fidelity Technologies, of whom BlockFi is seeking to recover unpaid collateral.
The filing – also lodged in New Jersey – says BlockFi entered into a pledge agreement with Emergent on Nov. 9 stating that an unnamed borrower was obliged to pledge “certain shares of common stock” and has breached the agreement by failing to comply with its payment obligations.
The Financial Times reports the collateral in question is Bankman-Fried’s 7.6% stake in Robinhood which he bought earlier this year.
“Emergent has defaulted on its obligations under the pledge agreement and failed to satisfy its obligations thereunder despite written notice of default and acceleration,” the lawsuit filing says.
The lawsuit also named London-based brokerage ED&F Man Capital Markets for refusing to “transfer the collateral” to BlockFi.
“This is a highly complex matter,” a spokesperson for ED&F Man Capital Markets told MarketWatch in an emailed statement.
“We cannot comment on matters that are subject to legal proceedings but will of course comply with any direction given by the judge,” they added.
On Monday, BlockFi, who was once valued at $3 billion, filed for bankruptcy protection after becoming the latest company to be pushed over the edge from the collapse of crypto exchange FTX.
See also: BlockFi’s big creditors include an indenture trustee firm, FTX and the SEC
The lawsuit is the latest headache for Bankman-Fried, who is already the subject of a number of investigations in the U.S. and the Bahamas – where FTX was based. The downfall of FTX has triggered a chain reaction of crypto-casualties including crypto financial-services firm Genesis.
FTX collapse to be focus of Senate hearing Thursday — here’s what to watch for
BlockFi and representatives of Bankman-Fried did not immediately respond to MarketWatch’s request for comment.
See also: Bitcoin prices under pressure as cracks spread across crypto industry
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Benchmark U.S. crude oil for January delivery rose 96 cents to $77.24 a barrel Monday. Brent crude for January delivery fell 44 cents to $83.19 a barrel.
Wholesale gasoline for December delivery was unchanged at $2.33 a gallon. December heating oil fell 2 cents to $3.22 a gallon. December natural gas fell 31 cents to $6.71 per 1,000 cubic feet.
Gold for February delivery fell $13.50 to $1,755.30 an ounce. Silver for March delivery fell 48 cents $21.13 an ounce and March copper fell 1 cent to $3.62 a pound.
The dollar fell to 138.89 Japanese yen from 139.05 yen. The euro fell to $1.0339 from $1.0412.
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U.S. stock-index futures sank Sunday night, as Asian markets fell following widespread public demonstrations in China and as oil prices hit a 2022 low.
Dow Jones Industrial Average futures
YM00,
fell more than 150 points, or 0.5%, as of 10 p.m. Eastern, while S&P 500 futures
ES00,
and Nasdaq-100 futures
NQ00,
dropped even more sharply.
Wall Street finished mixed on Friday with the Dow notching its highest close since April 21. The S&P 500
SPX,
finished down 1.1 points, or less than 0.1%, at 4,026.12; the Dow Jones Industrial Average
DJIA,
closed 152.97 points, or 0.5%, higher at 34,347.03; and the Nasdaq Composite
COMP,
shed 58.96 points, or 0.5%, to 11,226.36.
Stocks in Asia declined Monday, led by a 2% fall by Hong Kong’s Hang Seng Index
HSI,
The Shanghai Composite
SHCOMP,
slid as well, as thousands of protesters in major Chinese cities, including Shanghai, called for President Xi Jinping to resign. The unprecedented protests were spurred by frustration with China’s strict lockdowns as part of its “zero-COVID” policy.
“Sentiment has turned sour as unrest across China grows,” Stephen Innes, managing partner at SPI Asset Management, said in a note Sunday night. “The risk of the situation escalating from here and short-term volatility remains high.”
Oil prices fell sharply Sunday as well, as investors worried about slipping demand in China. West Texas Intermediate crude futures
CL.1,
were last down more than 2%, at $74.27 a barrel, its lowest price year to date. Prices for Brent crude
BRNF23,
the international standard, sank as well.
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Benchmark U.S. crude oil for January delivery fell $1.66 to $76.28 a barrel Friday. Brent crude for January delivery fell $1.71 to $83.63 a barrel.
Wholesale gasoline for December delivery fell 14 cents to $2.33 a gallon. December heating oil fell 12 cents to $3.24 a gallon. December natural gas fell 29 cents to $7.02 per 1,000 cubic feet.
Gold for December delivery rose $8.40 to $1,754 an ounce. Silver for December delivery rose 6 cents $21.43 an ounce and December copper rose 1 cent to $3.63 a pound.
The dollar rose to 139.05 Japanese yen from 138.48 yen. The euro fell to $1.0412 from $1.0413.
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TOKYO — Asian shares were mixed Friday as worries deepened about the regional economy and Japan reported higher-than-expected inflation.
Benchmarks fell in Tokyo, Seoul and Hong Kong, but rose in Sydney and Shanghai.
Investors have their eyes on China‘s lockdowns and restrictions to curb the spread of coronavirus infections, as the direction China takes will have great impact on the rest of Asia.
“Reopening policies have pivoted in China, which will be a gradual process. COVID control measures will vary across cities, but positive top-down approaches will be ongoing,” said Stephen Innes, Stephen Innes, managing partner at SPI Asset Management.
Japan’s benchmark Nikkei 225 lost 0.3% in afternoon trading to 28,288.38. Australia’s S&P/ASX 200 rose 0.2% to 7,259.50. South Korea’s Kospi was little changed, down less than 0.1%, at 2,440.41. Hong Kong’s Hang Seng slipped 0.9% to 17,507.03. The Shanghai Composite gained 0.3% to 3,099.19.
Data on inflation in Tokyo for November beat analysts’ expectations, with the core consumer price index showing a 3.6% rise, the highest in more than four decades.
The Federal Reserve and the world’s other central banks have been raising interest rates to try to rein in decades-high inflation. But the Bank of Japan has resisted tightening monetary policy, a move that would counter inflationary pressures by discouraging borrowing by businesses and consumers.
“With the Bank of Japan being one of the few outliers which has not embarked on a rate-hiking process, the point of pivot will be a key question into next year,” Jun Rong Yeap of IG said in a commentary.
The rising cases of COVID-19 cases and deaths in what experts are calling an eighth wave, in Japan and in other Asian nations, are also weighing on investor sentiments, but both remain relatively low so far. Many people in Japan and those nations have been vaccinated.
Shares finished higher Thursday in France, Germany and Britain. U.S. markets were closed for Thanksgiving. Wall Street will have a shortened session on Friday.
In energy trading, benchmark U.S. crude rose 50 cents to $78.44 a barrel in electronic trading on the New York Mercantile Exchange. It gave up $3.01 to $77.94 per barrel on Thursday.
Brent crude, the international standard, added 32 cents to $85.66 a barrel in London.
In currency trading, the U.S. dollar rose to 138.68 Japanese yen from 138.58 yen. The euro cost $1.0407, inching down from $1.0411.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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TOKYO — Asian shares were mixed Friday as worries deepened about the regional economy and Japan reported higher-than-expected inflation.
Benchmarks fell in Tokyo, Seoul and Hong Kong, but rose in Sydney and Shanghai. Oil prices advanced.
Investors have their eyes on China‘s lockdowns and restrictions to curb the spread of coronavirus infections, as the direction China takes will have great impact on the rest of Asia.
“Reopening policies have pivoted in China, which will be a gradual process. COVID control measures will vary across cities, but positive top-down approaches will be ongoing,” said Stephen Innes, Stephen Innes, managing partner at SPI Asset Management.
Japan’s benchmark Nikkei 225 lost 0.3% in morning trading to 28,286.40. Australia’s S&P/ASX 200 rose 0.3% to 7,262.40. South Korea’s Kospi edged down 0.1% to 2,438.19. Hong Kong’s Hang Seng slipped 0.8% to 17,521.11. The Shanghai Composite gained 0.5% to 3,105.36.
Data on inflation in Tokyo for November beat analysts’ expectations, with the core consumer price index showing a 3.6% rise, the highest in more than four decades.
The Federal Reserve and the world’s other central banks have been raising interest rates to try to rein in decades-high inflation. But the Bank of Japan has resisted tightening monetary policy, a move that would counter inflationary pressures by discouraging borrowing by businesses and consumers.
“With the Bank of Japan being one of the few outliers which has not embarked on a rate-hiking process, the point of pivot will be a key question into next year,” Jun Rong Yeap of IG said in a commentary.
Shares finished higher Thursday in France, Germany and Britain. U.S. markets were closed for Thanksgiving. Wall Street will have a shortened session on Friday.
In energy trading, benchmark U.S. crude rose 46 cents to $78.40 a barrel in electronic trading on the New York Mercantile Exchange. It gave up $3.01 to $77.94 per barrel on Thursday. Brent crude, the international standard, added 29 cents to $85.55 a barrel in London.
In currency trading, the U.S. dollar rose to 138.64 Japanese yen from 138.58 yen. The euro cost $1.0410, inching down from $1.0411.
———
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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