Hi, and welcome to today's Bay Area Times daily newsletter. If you haven't yet, follow us on Twitter to receive live updates throughout the day: @bayareatimes.

Top stories today: 1) CFTC sues Binance, 2) Twitter to further promote paid users, 3) Microsoft launches new Teams, but no AI, 4) Zoom IQ to integrate OpenAI, 5) housing prices rise on the East Coast, and 6) China is almost surpassing the IMF in emergency loans.

0. Data and calendar

1. CFTC sues Binance and CZ for evading U.S. regulations, trading against customers

• Binance and CZ (Binance's CEO) have denied any wrongdoing. - The Information, Web3 is going just great, Binance, CFTC.

Just like FTX, Binance's top operatives communicate via Signal, using auto-delete

Binance allegedly has 300 "house accounts" to trade against customers

Binance allegedly had lax KYC rules to encourage U.S. persons to trade on the international exchange

Binance allegedly knew that terrorists used the platform

The CFTC thinks it needs to "protect" offshore companies using Binance, just because they have a U.S. office

We expect a settlement in the order of $100M+

• This is a civil case, not a criminal case, meaning the government's goal is to get monetary penalties and economic changes, not arrests (at least at this stage, perhaps the DOJ will initiate a criminal case against CZ, in parallel).

• We expect a $100M+ settlement because BlockFi's settlement with the SEC was $100M. And Binance is the world's #1 exchange, so the CFTC has more leverage.

2. Twitter to only show paid accounts in "For You" recommended feed

• Risky bet: will many users leave? If this policy is in fact enacted, will more users convert to Blue, or would many just choose to leave the platform? Currently, less than 0.5M of Twitter's 336M+ are paying $7/mo for Blue. As usual, never bet against Elon. - The Verge

To all critics, he had a similar reply:

Twitter also has a list of hand-picked 35 VIPs whose tweets are automatically promoted

• This story might be exaggerated as Platformer is known to have an anti-Twitter bias, and no other news outlets have confirmed this. According to Platformer, Twitter has a list of names, from LeBron James to Ben Shapiro to AOC to Elon Musk himself, whose tweets are especially boosted by the core Twitter ranking algorithm. - Platformer

• Elon has said he would open-source Twitter's recommendation algorithm. But even we are skeptical of the full algorithm being open-sourced.

• This is another example of Elon's quick decision making. Some call it crazy or arbitrary. But most of the time, he is correct.

3. Microsoft releases new Teams for Windows

• New design and faster, but no AI features yet. The AI Copilot for Teams is still in closed beta, but should be released for everyone over the next few months. - Techcrunch

• Only available for Windows users who opt into the Public Preview program. Support for other users, including Mac, is coming later this year.

Teams user growth has been low: this update shouldn't make a difference, but the AI one might

4. Zoom IQ to integrate OpenAI capabilities

• Zoom IQ is their add-on software available for an extra $79/year. Zoom's premium plans are already more expensive than Google's and Microsoft's ($149/year vs $72/year for the latter two). Assuming the two giants will launch their AI features at no additional cost, the price differential vs Zoom will only increase. - The Verge, Zoom

• Zoom is playing catch up in being a full business suite. They recently launched Zoom Mail and Calendar, which connects to your Google or Microsoft 365 email and more tightly integrates Zoom with email and calendar functionalities. However, configuring Zoom Mail and Calendar is still a pain.

• We expect Microsoft to have a slight lead in the business productivity + generative AI race, given its proximity to OpenAI, but these features should be commoditized over time.

• What saves Zoom is that its core video conferencing software is seen as better than Google Meet and Microsoft Teams. We ourselves are customers, although we are exploring moving over to Google/Microsoft, which we also pay for.

5. Housing prices fall on the West Coast and rise on the East Coast

The below map uses January data from Black Knight:

Florida and Texas saw the highest gains since Covid

Today at 9 AM ET, S&P/CS releases their housing market report for January

S&P/CS House Price Index Composite 20:

• Exp. -0.5% monthly / 2.5% yearly, from -0.5% / 4.6%.

6. China's emergency bailouts to countries reach a record $40B in 2021

Almost the size of IMF loans, which totaled $69B in 2021:

China's loans carry a slightly higher interest rate than most

• In related news, Saudi Aramco agreed to buy 10% of a Chinese refiner for $3.6B. From Ukraine to the Middle East, China is gradually increasing its presence on the global stage, and that is not good for freedom or global growth. - FT

7. Other headlines

Tech

• Apple buys AI compression startup WaveOne.

• Other China-connected apps could pose a threat: TurboVPN, others.

• Pope in a jacket: interview with the creator of the AI-generated meme.

• iOS 16.4 is out: new emojis, safari web push notifications, other small changes.

• Apple Music Classical available in the App Store.

• Amazon starts adding a "frequently returned" tag to some items.

Business

• Schwab's bet on 10+ year bonds and overreliance on deposit income could lead it to bankruptcy; 90%+ of deposits being FDIC insured helps the bank.

• Google asks judge to dismiss DOJ's ad antitrust case, which seeks to break apart Google's ad business; rare for dismissal to happen.

• Brex, Mercury, Bridge Bank, and JPM moving to take over SVB's niche.

• First Citizens Bank grew from $42B in assets 3 years ago to $219B post-SVB.

• Lyft CEO and president to step down, former Amazon exec Risher to step in.

• Snap's head of growth Jacob Andreou going to Greylock as a GP.

• Amazon seller consultant to plead guilty to bribing staffers for information.

• Alibaba to split into 6 units, plans new IPOs.

• Meta plans lower bonus payoffs for some staff.

• CNN to add Gayle King as weekly primetime host as ratings hit lowest in 3 decades.

Crypto

• Voyager's sale to Binance halted after judge OKs government request.

• Cheap FTX crypto tokens were offered to Genesis, who got their $2.5B loan repaid.

• SBF lawyers, prosecutors agree on new bail conditions.

• Disney eliminating 50-person metaverse unit as part of 7K layoffs.

• Polygon zkEVM mainnet beta goes live, days after Matter releases its own zkEVM.

• Microstrategy repays Silvergate loan at 20% discount, buys 6K BTC, now holds 139K.

• Katie Haun: "How U.S. regulators are choking crypto" (through banking).

Washington and more

• Israel: Netanyahu suspends judicial takeover, looking for compromise.

• Gun deaths: evidence-based ways to reduce them.

• Nashville student who killed 6 was a former student.

• Trump continues on themes on election fraud and honoring Jan 6. rioters.

• Matt Taibbi receives a surprise home visit from IRS agent.

• Jack Ma spotted back in China.

8. Interesting tweets, memes, and images

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