In an effort to compete with Apple Pay and PayPal, several banks are reported to be developing a digital wallet that integrates debit and credit cards. According to The Wall Street Journal, the digital wallet will be operated by Early Warning Services, a joint venture between several banks that also operates Zelle. According to the report, Wells Fargo, JPMorgan Chase, and Bank of America are among the major banks involved. The new wallet would initially be launched with Visa and Mastercard already on board. The company has confirmed to CNBC that it intends to launch a wallet product in the near future. Read More
The bitcoin price had held steady above $21,000 for the last two days, bringing it back above the price it was when Sam Bankman-Fried’s crypto exchange, FTX, began its decline toward bankruptcy. The bitcoin price has remained steady above $21,000 since Monday, well above its Nov. 2 price of $20,283. Bitcoin’s price has risen more than 22% in the last seven days, according to data published by CoinMarketCap. The bitcoin price fell by that same amount in less than a day, between Nov. 7 and Nov. 8, as investors tried to assess the impact of a potential FTX collapse and the prospects of a Binance-backed FTX rescue. It dipped below $16,000 several times in the following weeks.
CoinDesk first reported on irregularities at FTX’s sister hedge fund, Alameda Research, on November 2. Billions of dollars worth of cryptocurrencies began to flow out of FTX in a few days. A potential rescue deal with ChangPeng Zhao’s Binance fell apart on November 8, and FTX and Alameda declared bankruptcy on November 11. Over that period, bitcoin, long the most prominent and well-capitalized cryptocurrency, became a vessel for investor concern. The surge in price coincides with deep uncertainty in the broader industry. On Thursday, the Securities and Exchange Commission charged two crypto companies, Genesis Trading and Gemini, with offering and selling unregistered securities. There have been multiple rounds of layoffs at crypto exchanges, including Coinbase and Crypto.com. In recent months, bitcoin has experienced a substantial rally that has outpaced the gains made by other cryptocurrencies, according to data from CoinMarketCap. During the past seven days, ether prices have increased by more than 18%. Binance’s exchange token, BNB, and ripple prices have risen by 10% and over 11%, respectively. But ether competitor Solana has seen its price rise by over 44% in the last seven days, propelled partly by the minting of a dog-based non-fungible token, Bonk Inu, on Solana’s blockchain.
FTX has recovered over $5 billion in liquid assets, including cash and digital assets, according to attorneys representing FTX in Delaware bankruptcy court. The news comes after federal prosecutors announced plans to seize at least $500 million worth of FTX-connected assets as part of their ongoing prosecution of FTX co-founder Sam Bankman-Fried. It will be a welcome boon to FTX customers following the collapse of the crypto exchange in November. FTX’s new CEO, John J. Ray, previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen. Read More
Esther George, president of the Kansas City Federal Reserve, is urging her colleagues to remain aggressive in their efforts to deal with runaway inflation as she nears the end of her 40-year central banking career. She stated on Thursday that the Fed should raise its benchmark borrowing rate to above 5% and maintain it there until substantial evidence that prices are stabilizing. “Holding that until we get evidence that inflation is actually coming down is really the message we’re trying to put out there,” she told CNBC’s Steve Liesman during a “Squawk Box” interview. “I’ll be over 5%, and I see staying there for some time, again, until we get the signal that inflation is really convincingly starting to fall back toward our 2% goal.” Read More
Despite recent turmoil and concern over Elon Musk’s priorities, Morgan Stanley remains bullish on Tesla stock. In a client note, longtime Tesla advocate Adam Jonas cut his price target on the stock to $250 from $330, his new forecast calls for a 122% upside from Wednesday’s close. Tesla will extend its lead over electric-vehicle competitors, and the Inflation Reduction Act will benefit the company. Those are the reason for Jonas’ optimistic outlook. Read More
According to a person with knowledge of the situation, Goldman Sachs, the storied investment bank, plans on cutting up to 8% of its employees as it girds for a tougher environment next year. The layoffs will impact every division of the bank and will likely happen in January, according to the person who declined to be identified as speaking about personnel decisions. That’s ahead of an upcoming conference for Goldman shareholders in which management is expected to present performance targets. The New York-based investment bank typically pays bonuses in January, and it’s possible the layoffs could be a way to preserve bonus dollars for remaining employees. Read More
Despite a muted level of inflation, consumers pulled back on their spending in November, according to data released Thursday by the Commerce Department. Retail sales declined by 0.6% for the month, exceeding the Dow Jones estimate of a 0.3% decline. The number is not adjusted for inflation as gauged by the Labor Department’s consumer price index, which increased by 0.1% in November and was below expectations. Measures that exclude autos and both autos and gas sales showed 0.2% declines. Stocks fell sharply following a mostly disappointing round of economic data released Thursday morning. The Dow Jones Industrial Average was off nearly 500 points in early trading. Read More
On Tuesday, Robinhood Markets CEO Vlad Tenev said he did not know what the disgraced former CEO of FTX, Sam Bankman-Fried, intends to do with his 7.6% stake in his trading app. “I’m not surprised that it’s one of the more valuable assets they have on their balance sheet because it is public company’s stock,” Tenev said on CNBC’s “Squawk Box.” “We don’t have a lot of information that you guys don’t have. We’re just watching this unfold and … it’s going to be locked up in bankruptcy proceedings, most likely for some time. And so we’re just kind of seeing how that plays out.” Read More
On Thursday, the Commerce Department reported that inflation grew roughly in line with estimates in October, suggesting that price increases might stabilize, at least for the time being. The core personal consumption expenditures price index, which excludes food and energy and is favored by the Federal Reserve, rose 0.2% for the month and was up 5% from a year ago. The monthly increase was less than the 0.3% estimate by Dow Jones, while the annual growth was in line with estimates. The gains reflect a slowdown from September, which saw a 0.5% monthly increase and a 5.2% annual increase. Including food and energy, headline PCE was up 0.3% on the month and 6% every year. The monthly increase was the same as in September, while the annual gain was a step down from the 6.3% pace. Read More
According to a new bankruptcy filing, troubled cryptocurrency exchange FTX may have more than 1 million creditors hinting at the huge impact of its collapse on crypto traders. Last week, when it filed for Chapter 11 bankruptcy protection, FTX showed that it had more than 100,000 creditors with claims in the case. But in an updated filing Tuesday, lawyers for the company said: “In fact, there could be more than one million creditors in these Chapter 11 Cases.” Typically in such cases, debtors are required to provide a list of the names and addresses of the top 20 unsecured creditors, the lawyers said. However, given the scale of its debts, the group instead intends to file a list of the 50 largest creditors on or before Friday. According to the filing, five new independent directors have been appointed at each of FTX’s main parent companies, including the former Delaware district judge, Joseph J. Farnan, who will serve as a lead independent director.
Over the past 72 hours, FTX has been in contact with “dozens” of U.S. and overseas regulators, the company’s lawyers wrote. These include the U.S. Attorney’s Office, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. This year has seen a spate of crypto firms, including Celsius and Voyager Digital, fail as they contend with a slump in digital asset prices and ensuing liquidity issues. In earlier bankruptcy cases, traders on these platforms have been designated “unsecured creditors,” meaning they’ll likely be at the back of a long queue of entities seeking repayment, from suppliers to employees.