“Just a scam”

The legal prosecution of crypto-accused villains, scammers, and fallen stars has moved to a faster pace, a shift that contributes to more volatility in digital asset prices.

Topping Friday’s crypto bulletin is the SEC’s decision to accuse Singapore-based Terraform Labs and its founder Do Kwon of orchestrating a multi-billion dollar scam. The announcement came after a federal judge in New York made it clear that Sam Bankman-Fried, founder of bankrupt cryptocurrency exchange FTX, could face jail time and, of course, harsher bail conditions if he doesn’t waive. from your internet habits.

The US Securities and Exchange Commission faces the difficult task of bringing Terraform’s Kwon to justice. The South Korean native has been on the run since triggering a cryptocurrency crash last spring that wiped out investors and wiped out other companies.

The collapse of Terra “brought a shock to the cryptocurrency markets.” said SEC law enforcement chief Gurbir Grewal. The value of the stablecoin was supposed to be pegged to other tokens using a complex mathematical formula. It turned out to be “just a scam,” Grewal said, accusing Kwon of deliberately misleading investors. He is also wanted by Singapore authorities.

In the meantime, Mr. Bankman-Fried could lose his coveted Internet access—or worse. Bankman-Fried is now under house arrest at his parents’ home in California, awaiting trial on fraud and conspiracy charges. He faces new restrictions. The prosecutor’s office told the judge that the current bail conditions failed to “keep a technologically sophisticated person … with a desire to avoid detection and surveillance.” They pointed out that he was using a virtual private network or VPN and an encrypted messaging app.

Lawyers for Mr. Bankman-Fried said the VPN is for watching football matches; the judge ordered both parties to propose new restrictions to him for consideration next week. If prosecutors get their way, Mr. Bankman-Fried, an avid gamer, may not continue to play League of Legends. Letter to the court from S. Keightley” in Texas suggested, “Why not just revoke bail and put him in jail?”

Cryptocurrency exchange Binance has resumed verification. Earlier this week, the New York City Department of Financial Services ordered cryptocurrency firm Paxos to stop issuing the popular dollar-pegged Binance-branded stablecoin due to “unresolved issues” with Binance. Changpeng Zhao, the founder of Binance, distances himself by calling the stablecoin a product of Paxos.

The price of bitcoin fell by almost 5 percent to $23,798 at 7 a.m. ET Friday. Law and order news coupled with hawkish comments from Fed officials on interest rates seem to be cooling off on bitcoin’s recent rally.

THIS IS HAPPENING

Fox News stars and executives have privately denied allegations of rigged 2020 elections. Hosts Tucker Carlson, Sean Hannity, Laura Ingram and others mocked Donald Trump’s advisers who claimed the presidency was stolen, according to a lawsuit filed by Dominion, the voting machine maker, seeking $1.6 billion in damages against Fox. Meanwhile, a special Georgia grand jury investigating Trump’s interference in the 2020 election found no evidence of “widespread fraud.”

A major Chinese banker has gone missing. Bao Fan, founder of investment bank China Renaissance, has not been in contact for about two days. The bank’s shares fell on Friday due to investors’ fears that Beijing is planning another crackdown on the financial sector.

Susan Wojcicki, longtime CEO of YouTube, is stepping down. Ms. Wojcicki, an early Google employee, is one of Silicon Valley’s most prominent female executives and the latest to leave her leadership position. She will remain an advisor to Google’s parent company, Alphabet.

Tesla is recalling more than 362,000 vehicles equipped with Full Self Driving..” The company’s driver assistance technology is designed to steer, accelerate and brake a car without human intervention. The National Highway Traffic Safety Administration found that this posed “an unreasonable risk to vehicle safety.” Tesla shares closed up 5.7% on Thursday.

Dodge a bullet?

The Munich Security Conference kicks off on Friday, and the agenda of heads of state, diplomats and Business leaders will include Russia’s invasion of Ukraine and how “Vladimir Putin’s arming of energy has led to a global energy crisis.”

As the war in Ukraine approaches the anniversary of the war, analysts are counting huge economic losses and modeling what comes next.

In Germany and in neighboring countries, it seems that Europe has dodged a bullet. The reason: a sharp drop in energy prices led by natural gas, which began in late summer.

Europe appears to have enough natural gas reserves to stave off an economic downturn. “According to our base case … the EU will also postpone next winter,” Salomon Fiedler, an economist at Berenberg Bank, wrote in a research note Friday.

The optimistic calculation assumes that the Europeans will continue to save on natural gas (Mr Fiedler estimates that they have managed to cut consumption by 20 percent since the start of the war), that the weather will not drop to abnormally low temperatures, and that energy imports from countries outside of Russia – I think, liquefied natural gas gas from the US will remain at the same buoyant level.

Risks for this model: China. If China’s demand for LNG rises sharply amid a massive recovery in its economy, it could undermine the global energy market.

Murdoch’s next move?

Ever since Rupert Murdoch abandoned his plans to consolidate the remnants of his empire into a single business, media observers have wondered how he can appease shareholders and close one last deal before the 91-year-old hangs up. Ed Lee of the Times considers one possible scenario.

Some investors have expressed concern that merging Fox, its television business, with News Corp, its newspaper business, would result in an unfair valuation of the latter. (Mr. Murdoch’s children, who are members of a trust that controls 40 percent of shareholder votes, are divided on the issue.)

Here’s one solution that would be in line with what activists are calling for: spin off The Wall Street Journal Publisher Dow Jones into a separate business that could potentially give News Corp shareholders the value they’re looking for. It would also allow Mr. Murdoch to spin off the real estate business (a move suggested by at least one activist) and raise money through a new share offering. The two additional incomes are likely to add up to a larger amount than the current one.

Magazine publisher Dow Jones could be worth up to $8.9 billion, based on a price-to-earnings multiple of comparable media companies including The New York Times, if sold separately. News Corp itself is valued at just $11 billion.

To add a little urgency to this calculation, Fox is currently facing a $1.6 billion Dominion lawsuit related to its Fox News network. Losing in court can be a big blow to a business.

“We seek competition, not conflict with China. We are not looking for a new Cold War.”

— President Biden says he plans to talk to Chinese President Xi Jinping to ease tensions amid outrage over Chinese air espionage in North America. Biden also clarified that the last three downed objects were most likely research balloons, not spy vehicles, and were not necessarily related to China.

Organized Labor Leadership Class

Workers at Tesla’s Buffalo plant launched a union campaign this week. If successful, he will form the company’s first union, which has also been achieved by workers at Starbucks, Apple, Trader Joe’s and Amazon over the past few years. Managers usually get one managerial advice about organized work: avoid it. But it’s no longer hands-on education, says Roy Bahat, head of Bloomberg Beta, an early-stage venture capital firm.

DealBook spoke with Mr. Bahat about a new MBA course he is teaching at UC Berkeley on how to lead an organized workforce. The interview has been edited.

What should CEOs of organized workforces do differently?

If they assume that organized labor will destroy their business and prepare for war, then a catastrophic outcome for all becomes much more likely. Business Leaders who know how to work with a union can make a big difference. We’ve heard of businesses paying their negotiation teams and unions to go through a negotiation training program together.

You said the union could make it easier to manage. What do you mean?

Companies usually make changes to their workforce randomly. It seems much easier to sit down with a select few of this workforce and say, “Hey, we would like to innovate by introducing the next new technology. How can we work together to try and deploy it?” And there are companies that do just that. Business leaders who think a union is bad for them are not resourceful enough.

Many business leaders think that a union will make change more difficult or reinforce fringe elements in their workforce.

This is no different than any business relationship: you build trust. You show that you can be relied upon, you communicate honestly. You try things and see if they work. It’s exactly the same.

READING SPEED

Offers

• Bank of America is reportedly preparing to cut jobs in its investment banking division as the deal slump hit another Wall Street giant. (Bloomberg)

• A consortium of Qatari investors is reportedly preparing a £5bn ($6bn) offer for Manchester United. Sovereign wealth funds in the Gulf are also on the hunt for minority stakes in NBA teams. (Bloomberg)

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