February 24, 2023

Top stories today: 1) SBF now faces 12 counts, 2) Gensler calls "everything other than bitcoin" securities, and 3) China proposes peace plan for Russia-Ukraine war.

Hi, and welcome to today's Bay Area Times daily newsletter. Top stories today: 1) SBF now faces 12 counts, 2) Gensler calls "everything other than bitcoin" securities, and 3) China proposes peace plan for Russia-Ukraine war.

0. Data and calendar

All values as of 3 AM PT / 6 AM ET, other than S&P500 close (1 PM PT / 4 PM ET).

All times are ET.

1. SBF now faces 12 counts in updated indictment

  • The updated 12-count list: Conspiracy to commit wire fraud on customers of FTX, wire fraud on customers of FTX, conspiracy to commit fraud on customers of FTX in connection with purchase and sales of derivatives, fraud on customers of FTX in connection with purchase and sales of derivatives, conspiracy to commit securities fraud on investors in FTX, securities fraud on investors in FTX, conspiracy to commit wire fraud on lenders to Alameda Research, wire fraud on lenders to Alameda Research, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, conspiracy to commit money laundering, conspiracy to make unlawful potential contributions and defraud the FEC. - Indictment, Bloomberg

  • Too much strong evidence against him:

    • The hidden code that allowed Alameda to get $65B in interest-free credit from FTX.

    • Guilty pleas from his co-founder Gary Wang, Alameda CEO Caroline Ellison, and potentially from CTO Nishad Singh too.

  • He could plead guilty and testify against others being investigated by the DOJ, including all his partners named above but also potentially his competitors. The DOJ is investigating Bitfinex and Tether, and Alameda's was one of its largest clients, for example.

  • Criminal trial to start in October.

2. Gensler calls "everything other than bitcoin" securities

  • Leaving even Ethereum out. His views are not shared by many lawmakers and most of the industry, to say the least. It is possible that a crypto case will get to the Supreme Court, where conservatives have a 6-3 majority. - NY Mag interview

  • Claims he was tough on during in-person meeting with FTX. "I indicated to them they could take their slide deck down on the second slide, and that I didn’t think that they should — with all respect — that it was not a valuable use of their time."

  • Doesn't see crypto use case: "I don’t think there’s much economic use for a micro-currency, and we haven’t seen one in centuries. Most of these tokens will fail, because the question is about these economics. What’s the ‘there’ there?"

3. China proposes Ukraine peace plan, end of sanctions

  • Document has dog whistles to both Russia and the West: it calls for "respecting the sovereignty of all countries", while at the same time calling it the "Ukraine crisis" and saying it "opposes unilateral sanctions unauthorized by the UN Security Council." - China's Ministry of Foreign Affairs

  • U.S. officials respond with skepticism. "It could stop at point one, which is: Respect the sovereignty of all nations," said National Security Adviser Jake Sullivan. "We would like to see nothing more than a just and durable peace, [but] we are skeptical that reports of a proposal like this will be a constructive path forward," said State Department spokesman Ned Price. - AP, ABC

Yet, in parallel, China is negotiating to sell kamikaze drones to Russia

  • 100 ZT-180 drones by April 2023: Chinese drone manufacturer Xi'an Bingo Intelligent Aviation Technology is said to be negotiating with the Russian military. The plans also include falsifying shipping papers, to make it seem that the drones are actually civilian parts. - Spiegel International

  • Hard to see how China is being rational here. Its actions are only accelerating the creation of an economically fractured world, which is bad for everyone, and may increase the chance of World War III.

U.S. sending additional 100-200 troops to Taiwan

  • Training program to protect against China: in addition to sending its own troops to China, some Taiwanese troops are coming to Michigan for training. The U.S. currently has 30 troops in Taiwan, so the increase is significant. - WSJ

4. Earnings roundup

Performance includes after-hours if company reported earnings after market close.

  • Alibaba's revenue grows 2% to $35.9B (USD), profits up 69% to $6.8B.

  • Moderna drops as revenue declines 30% to $5.08B; guidance lowered.

  • Intuit grows revenue 14% to $3B, 2023 guidance is 10-12%.

  • Booking's revenue increases 36% to $4B on growing travel demand.

  • Autodesk's revenue grows 9% to $1.32B.

  • Block shares are up as revenue and gross profits beat expectations.

5. Russia war leads to increased U.S. energy exports to Europe

  • U.S. provided 50% of Europe's liquefied natural gas in 2022, plus 12% of its oil. Russia has shifted its exports to the "neutral" part of the developing world and to China.

  • Still, trade restrictions lead to inefficiency. The most efficient system is one that everyone can trade with everyone. The transition to a bipolar world might be painful, especially given the U.S.'s current (mostly import) relationship with China. - POLITICO

6. Americans think opioids, obesity, guns are greatest threat to health, ignoring age-related diseases

Actually, the top killers are heart disease and cancer

  • Age-related diseases are the most underfunded and ignored public policy matters. Most people will die of one, yet funding and attention for the research of its cures is less than 1% of the total budget.

  • The FDA takes 12 years to approve new drugs, which leads to higher costs of development, higher prices, and underinvestment from the private sector. It's all a huge problem, and it should be a top priority of any administration.

7. Other headlines




  • Coinbase announces its own L2 Base, no new token, will use ETH.

  • Dapper Labs to lay off another 20% of employees, after 22% in November.

  • Folkvang still stands as a market-maker after losing half ($200M) of its funds to FTX.

  • Cathie Wood adds another $4M of Coinbase to her funds.

Washington and more

  • Vivek Ramaswamy has been on FOX a lot, pitching himself as Trump 2.0, potentially positioning himself as a VP candidate.

  • Trump deposition in FBI firing case ordered by federal judge.

  • Marianne Williamson becomes 1st announced Democratic candidate.

  • 1st GOP debate to be held in Milwaukee in August.

  • Semafor launching World Economy Summit to compete with WEF Davos.

  • Succession show to end in its 4th season.

8. Interesting tweets, memes, and visuals

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