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Good morning. Digital asset exchanges are rushing to reassure clients that their funds are safe as the collapse of Sam Bankman-Fried’s FTX crypto exchange ricochets through the industry.
Binance, the world’s biggest crypto trading venue, as well as smaller rivals including Crypto.com, OKX and Derebit, have vowed to publish proof that they hold sufficient reserves to match their liabilities to customers. Coinbase, the US-listed exchange, has also sought to distance itself from the crisis that has engulfed FTX.
The sudden collapse last week of FTX and Bankman-Fried’s trading shop Alameda Research, once viewed as pillars of the industry, has severely eroded confidence in the digital asset market. FTX had less than $1bn in easily sellable assets against $9bn in liabilities before it went bankrupt on Friday. The collapse has also thrown a spotlight on two US accounting firms that the cryptocurrency exchange said it had used to audit its books.
Tether’s eponymous US dollar stablecoin — the largest in the industry — has faced approximately $3bn in redemptions in the past four days, according to data provider CoinMarketCap, underscoring how traders are yanking funds out of the digital asset market.
Meanwhile, balances of ether, the second-biggest cryptocurrency, have dropped 7 per cent in the past fortnight to 22.9mn across major crypto exchanges, including FTX, according to data from blockchain analytics platform Nansen. At current exchange rates, that points to a fall of about $2bn, which suggests some investors are pulling their coins from centralised venues in favour of storing them using their own systems.
Five more stories in the news
1. Biden and Xi try to steady collapsing US-China relations Joe Biden and Xi Jinping will conduct their first in-person meeting in Bali today, in what will be the most significant test yet of whether the two leaders can reverse what has been a dramatic decline in US-China relations. The US and China are at odds over issues including trade, Taiwan, nuclear weapons and Russia.
2. China extends bank deadline for capping property sector loans The People’s Bank of China is attempting to relieve pressure from the credit crunch roiling China’s real estate sector by extending a year-end deadline for lenders to cap their ratio of property sector loans. The extension has the potential to affect 26 per cent of China’s total banking loans, giving developers breathing space amid a historic downturn in the sector.
3. Saudi Arabia emboldened as energy demand ‘exposes hypocrisies’ The Ukraine war has left the EU rushing to replace Russian fossil fuels. The heightened demand has emboldened Saudi Arabia to point out the hypocrisy of the return to dirtier energy sources even as nations convene at COP27 in a commitment to shift toward a greener future.
4. Imran Khan signals desire to build bridges with Washington Pakistan’s former prime minister said he wants to mend relations with the US despite accusing it of treating Pakistan as a “slave” and claiming that Washington conspired to remove him from office a few months ago. Khan says he no longer blames the US, and if re-elected, wants a “dignified” relationship.
5. Singles Day misses the mark for China’s weary shoppers Jack Ma’s Alibaba group spent years building November 11 into the largest retail event on the planet, but this year it drew a lukewarm response from Chinese shoppers, indicating that consumers and retailers in the world’s biggest market remain spooked by Xi Jinping’s zero-Covid policy and his crackdown on excess.
The day ahead
King Charles’ birthday King Charles III turns 74 today, and will be honoured with a 41-gun salute and a rendition of “Happy Birthday” at Buckingham Palace’s changing of the guard.
100 years of the BBC Today marks the 100th anniversary of the BBC’s first radio broadcast.
Economic indicators The European Union releases monthly data on eurozone industrial production, India publishes its October consumer price index inflation rate figures and Japan will have its flash Q3 GDP figures today.
Corporate results Embraer released its Q3 results and Tyson Foods its Q4 data.
Elon Musk goes to court over Tesla pay Trial begins in Delaware Chancery Court today over Elon Musk’s $56bn remuneration at Tesla. A shareholder claims that the amount paid to the co-founder and chief executive is an excessive payout.
What else we’re reading
China’s elite seek safety abroad A flock of wealthy Chinese have taken flight from the world’s most populous country just as Xi Jinping embarks on an unprecedented third five-year term in power. Some of those leaving have cited the difficult business environment, while others fear the direction of future government policy.
US chipmakers reel from sharp boom to bust A growing number of companies, including mobile chipmaker Qualcomm, have issued unexpectedly gloomy financial forecasts. Weaker consumer spending has hit smartphone sales, signalling a round of job cuts ahead for the industry.
The real reason to get off Twitter The social media site reeks of low status, argues Janan Ganesh — but not because it is free. The culture that has built up around the site is part of its charm, and yet leaves it with an anti-aspirational feel, rife with self-mockery, political jargon and an aura of shared camaraderie over having no better options.
The mortgage time bomb ticking beneath Poland’s banks Hundreds of thousands of Polish homebuyers were advised to get mortgages in Swiss francs in the mid-aughts. Now, the legal fallout from that scheme threatens to push banks under — and rattle a fragile economy.
Beware the creeping normalisation of the hard right Many mature democracies are now experiencing the normalisation of the anti-liberal far right — and it’s not easy to combat. It is more fundamental than a struggle over political representation, writes Timothy Garton Ash, it is also a struggle over the very definition of normality.
Film
Critics Danny Leigh and Leslie Felperin review last week’s six best cinema releases, including the return of Black Panther, the first since the death of Chadwick Boseman.
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