Meet Crypto Nomads – The New York Times

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Some of the world’s most important cryptocurrency exchanges – platforms like Binance and FTX – are not based in the United States. Yet its founders grew up in North America and traced their professional roots to Wall Street.

American regulations prevent these trading giants from offering crypto investors’ favorite products, so they went abroad where the rules are more liberal on the riskiest types of transactions. Eric Lipton and DealBook’s Ephrat Livni will continue to act to avoid pressure. report for The Times.

“It needed a non-US base of operations” Sam Bankman-Fried, founder and CEO of FTX, talked about his platform, which operates from Hong Kong. “The most important part for us – and I think for most of the industry as a whole – are derivatives,” he said. FTX specializes in this type of transaction and this is outside the borders of US retail merchants. Change Raised $900 million This week to fund its global expansion at a valuation of $18 billion.

Derivatives exchanges allow traders to take large amounts of leverage, Up to 101x on FTX and up to 125x on Binance. This turns a small upfront payment into a big bet that can pay out big bucks or lead to forced sales that initiate gradual liquidations and affect the prices of the underlying cryptocurrency. Despite the ban, billions of dollars of investment from clients with ties to the US reached some offshore exchanges, according to last year’s trade data.

Stock market executives admit leverage increases volatility but say a few traders actually use the extreme leverage their platforms advertise. Binance’s Changpeng Zhao said the numbers were a “marketing gimmick”. Bankman-Fried acknowledged it was time to reduce leverage, calling it a “double-edged sword.”

The seven-day moving average of global Bitcoin transaction volumes by market

“I am not saying that this will cause the next financial crisis” Timothy Massad, former head of the Commodity Futures Trading Commission, which regulates derivatives, said. “But could it be something like the butterfly flapping its wings in Brazil and starting a hurricane in Texas?” Different types of derivatives played a crucial role in the financial crash of 2008. high leverage bets home mortgages went bad and caused the collapse of major financial institutions.

Regulators around the world are turning the screws. Since June, Binance has been targeted by financial authorities with warnings or other enforcement actions. Britain, Cayman Islands, Hong Kong, Lithuania, Italy, Poland and Thailand, many watch for highly leveraged derivatives offerings. Meanwhile, Bankman-Fried said she is considering relocating to Singapore, as regulators in Hong Kong point out that potentially restrictive rules are coming soon. For now, this is where his crypto nomad friend Zhao lives.

Reading full story about crypto nomads and extended interviews With Bankman-Fried and Zhao.

People are traveling like 2019. Expenditure on airlines Briefly surpassed 2019 levels For the first time since the pandemic began. While domestic leisure travel is at or above pre-pandemic levels, business travel and international travel still lag behind.

Intel says the global semiconductor shortage could extend into 2023. “We still have a long way to go,” said Pat Gelsinger, Intel’s CEO. He told The Wall Street Journal. General Motors said it was planning yesterday. slow production of pickup trucks because of chip shortage.

A “pingdemic” engulfs the UK. With the increase of Covid cases, more than 600 thousand people pinged The government’s testing and tracking application has asked them to self-isolate for 10 days as they are near someone who has tested positive. This has led to staff shortages for truck drivers, train drivers, supermarket workers and more.

Amazon is stopping using the arbitration process to resolve customer disputes. e-commerce giant let customers know in a five sentence note about the updated “terms of use”. Disputes will now have to go to federal court, rather than a private and confidential arbitration process that critics say puts consumers in a difficult position. disadvantage.

A tech firm hit by ransomware gets the key to unlocking customers’ data. Kaseya’s breach this month led to extortion attempts by hundreds of software company customers, prompting President Biden to call Russian President Vladimir Putin, where the attacks came to light. Kaseya just said that a “third party” had provided a key to unlock victims’ compromised systems.

Uber announced yesterday that it will acquire the logistics technology company. Change location With a deal worth over $2.2 billion from TPG Capital. It’s a bet on growing Uber’s transportation business, an important but less high-profile unit than any of the ride-hailing giant’s other businesses.

Uber reshaped its business during the pandemic, this took a serious hit to the basic ride-hailing service. Company sold his bike and scooter business Strengthens its food distribution division with a $2.65 billion buyout deal mail friends, a $1.1 billion deal to buy the alcohol distribution business foggy and this week a partnership Albertsons.

Uber launched Uber Freight in 2017and the unit raised $500 million last year at a $3.3 billion valuation from Greenbriar Equity Group. Freight accounted for less than 10 percent of Uber’s sales in the first quarter. “We’re expanding shipping very aggressively,” Uber’s CEO Dara Khosrowshahi said at the company’s shareholder meeting in May. “And when autonomous technology is developed and completely safe, we definitely want autonomous trucks and autonomous drivers to be on the freight platform, so to speak.”

Can trucking help Uber drive profitability? That’s the key question as Uber’s core consumer business struggling with driver shortage. Uber says the deal will allow it to expand into Mexico and help keep the losing freight segment (on a business basis) at par by the end of next year.


— Dan Ives of Wedbush Securities on how many tech companies have had a lucrative epidemic. “Technology is triumphant in a way that even the most evangelical leaders could not imagine,” says David Streitfeld of The Times. Examining the scene in Silicon Valley.


Fear, in part, that the economic recovery will slow Delta variant The coronavirus appears to have receded among stock investors. But bond buyers are still frightened. Yields on 10-year Treasuries have been falling for months and are just under 1.3 percent, close to the lowest level since February, when expectations for the economy were much shaken. Who should we believe?

A drop in yield often signals slower growth ahead, which seems to contradict what’s going on. Yes, the Delta variant has suspended some reopening plans, but overall the economy seems to be moving pretty fast. Most economists think 2021 growth will be the strongest since the mid-1980s.

This has led some Wall Street strategists to conclude that the bond market has deteriorated.

  • Vincent Deluard, a global macro strategist at institutional brokerage StoneX, says the long-held belief that bonds can somehow predict the economy better than stocks doesn’t make sense in our current situation. The Fed’s stimulus included buying large doses of market-distorting bonds. The popularity of target-dated funds, which balance stocks and bonds against the predicted retirement date of investors, is also making bonds move for reasons unrelated to the economy. “I find it hard to take it seriously when the bond market says we’re not going to have inflation and a hot economy,” Deluard said.

  • Tom Atteberry, who runs the FPA New Income bond fund, one of the most conservative around, says there’s another possibility: Economic recovery is slowing one after another. Growth peaked at around 5 percent in the 1990s, 4 percent in the mid-2000s, and around 3 percent before the pandemic.

The biggest difference this time around is that the government is spending trillions to get the economy out of a deep recession. What if that masks something fundamentally wrong? What if growth has already peaked? What if the new long-term ceiling is even lower than the old one? Atteberry thought about it, “but then I get back to ‘no’,” he said. Interest rates will rise and the economy will be much better than it is now,” he said.

Opportunities

  • The Carlyle Group is reportedly in talks to raise a $27 billion buyout fund that will be the largest in the industry. (Bloomberg)

  • Shares of Indian food delivery company Zomato rose 80 percent on the first day of trading amid concerns about the strong IPO price. (BBC)

  • Delivery startup Gopuff is in talks with investors, including Blackstone, to raise $1 billion. (TechCrunch)

  • “Grills Are Trendy In A Scorching Public Offering Market” (WSJ)

  • Former baseball star Alex Rodriguez’s venture capital firm has backed online brokerage startup Tornado in hopes of fueling the retail investor spree. (Bloomberg)

Policy

  • What the US can learn from Europe’s national health experiences is passed on. (NYT)

  • The White House-Facebook coronavirus battle is getting away from the real problem: We can’t agree on anything. (NYT)

  • President Biden has appointed more federal judges in his first six months than any president since Nixon. (axioms)

  • “Congress Should Not Risk Making Inflation Worse” (Times Opinion)

best of the rest

  • One of the fastest growing and most controversial private equity firms consists of other private equity firms. (FT)

  • excitement and blow up Both beat earnings expectations as the ad market rebounded. (NYT, CNBC)

  • “What is the price of an uncleaned hotel room?” (NYT)

  • Crocs, unofficial pandemic shoes, says Sales will increase by 60% this year. (Elle, CNBC)

  • Where is Larry Page? The Google co-founder reportedly spent time on the remote Fiji islands, which was disconnected from most travelers during the pandemic. (insider)

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