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FTX Collapses While 75% of Bitcoin Investors Have Lost Money

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Study Finds 75% of Bitcoin Investors Have Lost Money

According to a study published Monday, roughly 75 percent of people who purchased bitcoin lost money as the cryptocurrency sector reels from the collapse of FTX, which has sapped confidence.

Economists at the Bank of International Settlements, widely regarded as the central bank of central banks, examined data on cryptocurrency investors in 95 countries between 2015 and 2022.

“Overall, back-of-the-envelope calculations indicate that roughly three-quarters of users have lost money on their bitcoin investments,” the researchers wrote in their study.

During the study period, the price of bitcoin increased from $250 in August 2015 to nearly $69,000 in November 2021. It is now worth around $16,500.

During the same time period, the number of people using smartphone apps to buy and sell cryptocurrencies increased from 119,000 to 32.5 million.

“Our analysis has revealed that, globally, bitcoin price increases have been linked to increased entry by retail investors,” the researchers wrote.

Furthermore, they discovered that “as prices rose and smaller users bought bitcoin, the largest holders (the so-called ‘whales’ or ‘humpbacks’) sold, making a profit at the expense of the smaller users.”

The researchers lacked direct data on individual investors’ gains and losses. However, they were able to extrapolate based on the price of bitcoin when new investors began using cryptocurrency trading apps and the roughly $20,000 it was worth last month.

The study also discovered that men under 35, commonly identified as the most “risk-seeking” segment, made up roughly 40% of new cryptocurrency investors.

Researchers discovered that most cryptocurrency investors viewed it as a speculative investment and that young men were more active in trading in the months following a significant increase in the bitcoin price.

According to them, the increase in investors following price increases should raise questions about whether more consumer protection is required.

Regulators Circle FTX

Following the spectacular collapse of a cryptocurrency exchange last week, regulators launched investigations. On Monday, FTX and rival exchanges sought to reassure nervous investors about their own stability, weighing on cryptocurrencies.

The collapse of FTX, once a crypto industry darling with a $32 billion valuation as of January, has prompted investigations by the US Justice Department, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, according to a source familiar with the investigations.

According to a second source with knowledge of the investigation, the SEC investigation is also targeting FTX executives, their knowledge of handling customer funds, and any potential violations of securities laws.

While the crypto industry has marketed digital assets as fundamentally different from traditional finance, the sector has proven to be vulnerable to the same risks and should be subject to the same regulations, according to Federal Reserve Vice Chair Lael Brainard on Monday.

“Crypto finance, because it is no different than traditional finance in terms of the risks that it exposes,” she told Bloomberg in an interview, echoing a long-held belief.

Separately, the Fed’s top regulatory official, Michael Barr, hinted on Monday that stricter oversight of cryptocurrencies is on the way. This includes “safeguards” to ensure crypto companies follow the same rules as other financial firms, according to Barr’s written testimony released ahead of his appearance before the Senate Banking Committee on Tuesday.

The committee’s Democratic chairman, U.S. Senator Sherrod Brown, spoke out.

“My focus has always been on the crypto industry’s fraud, scams, volatility, and outright theft,” he said. “FTX’s bankruptcy and numerous other recent instances of insecurity have demonstrated why we require a comprehensive regulatory approach that protects consumers.”

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

FTX Files for Bankruptcy

On Friday, FTX filed for bankruptcy in one of the most high-profile crypto meltdowns after frenzied traders withdrew $6 billion from the platform in 72 hours and rival exchange Binance abandoned a rescue deal.

According to a New York Times interview published on Monday, FTX’s former CEO, Sam Bankman-Fried, said his company had grown too quickly.

Bitcoin fell below $16,000 early Monday before recovering to trade at $16,401, up 0.56% at 5:56 p.m. EST (2256 GMT).

The sudden demise of FTX, once a saviour for struggling crypto firms, sent shockwaves through the crypto industry, bracing for more damage.

LedgerX LLC, an FTX subsidiary, withdrew its December request to the Commodity Futures Trading Commission to offer products that are not fully collateralized on Monday.

BlockFi, a cryptocurrency lender, said it has significant exposure to FTX after signing a deal with it to provide it with a $400 million revolving credit facility with an option to buy it for up to $240 million.

Other cryptocurrency exchanges have published details of their reserves and promised additional disclosures to calm investor nerves amid unverified rumours.

Kris Marszalek, CEO of Singapore-based crypto exchange Crypto.com, which made headlines in 2021 with a $700 million deal to rename Los Angeles’ Staples Center the Crypto.com Arena, refuted suggestions that the company was in trouble.

Study Finds 75% of Bitcoin Investors Have Lost Money, FTX Collapses

Missing Money

Marszalek stated in an “ask-me-anything” YouTube Livestream that the exchange always kept reserves to match every coin customers held on its platform and that an audited proof of Crypto.com’s reserves would be published within weeks.

The move came after investors took to Twitter over the weekend to question a $400 million ether token transfer to the Gate.io exchange on Oct. 21.

On Sunday, Marszalek tweeted that the ether had been recovered and returned to the exchange, but the Wall Street Journal reported that withdrawals at Crypto.com had increased over the weekend.

A Crypto.com spokesperson declined to comment whether the platform’s outflows continued on Monday.

Crypto.com is one of the top ten exchanges in turnover worldwide, but it is smaller than FTX and market leader Binance.

On Sunday, Kraken, another cryptocurrency exchange, announced on Twitter that it had frozen the accounts of FTX, affiliated crypto trading firm Alameda Research, and their executives.

“We have actively monitored recent developments with the FTX estate, are in contact with law enforcement, and have frozen Kraken account access to certain funds we suspect to be associated with FTX-related ‘fraud, negligence, or misconduct,” a Kraken spokesperson said.

Changpeng Zhao, the CEO of Binance, the world’s largest cryptocurrency exchange, stated that he plans to establish an industry recovery fund to assist projects that are “otherwise strong but in a liquidity crisis.”

Binance signed a nonbinding letter of intent to buy FTX’s non-US assets last week but backed out, causing the company to go bankrupt. Zhao has since issued a warning about a “cascading” cryptocurrency crisis.

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Death Toll In Moscow Concert Hall Attack Rises To 140 After Another Victim Dies In Hospital

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MOSCOW — The death toll from last week’s music hall attack in Moscow increased to 140 on Wednesday, with another victim dying in a hospital, according to Russian officials.

That victim was one of five who remained hospitalized in “extremely grave condition,” and physicians “did everything they could” to rescue them, according to Russia’s Health Minister, Mikhail Murashko.

According to the official, 80 individuals were hurt in the attack and are hospitalized, while 205 others sought outpatient medical care.

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Death Toll In Moscow Concert Hall Attack Rises To 140 After Another Victim Dies In Hospital

The Friday night shooting at Crocus City Hall, a huge shopping and entertainment complex on the northwestern outskirts of Moscow, was the bloodiest terrorist act on Russian soil in nearly two decades. Four attackers with automatic rifles targeted thousands of concertgoers and set fire to the arena.

An Islamic State affiliate claimed credit for the violence, while US intelligence confirmed the group’s involvement. French President Emmanuel Macron stated that France has intelligence pointing to “an IS entity” as responsible for the attack.

The day following the attack, Russia’s Federal Security Service (FSB) announced the arrest of 11 people, including four alleged gunmen. The four guys, all Tajik nationals, appeared in court in Moscow on Sunday on terrorist accusations and appeared to have been severely beaten. One person appeared to be barely conscious during the hearing.

Russian officials, meanwhile, have asserted that Ukraine and the West played a role, which Kyiv categorically rejects. Ukrainian President Volodymyr Zelenskyy accused his Russian counterpart, Vladimir Putin, of attempting to incite frenzy as his forces fight in Ukraine.

Alexander Bortnikov, the FSB chief, also said that Western intelligence services may have been involved. “We believe that radical Islamists planned the action, while Western special services assisted it, and Ukrainian special services had a direct role in it,” Bortnikov added without providing further information.

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Death Toll In Moscow Concert Hall Attack Rises To 140 After Another Victim Dies In Hospital

He echoed Putin’s claim that the four gunmen were attempting to flee to Ukraine when they were apprehended, citing it as evidence of Kyiv’s claimed involvement.

However, Belarus’ autocratic President Alexander Lukashenko, who stated on Tuesday that the suspects were on their way to Ukraine because they were concerned about tight border controls, called this allegation into question.

The Islamic State organization, which lost much of its territory after Russia’s military intervention in Syria in 2015, has long targeted Russia. In October 2015, IS bombed a Russian airplane over the Sinai desert, killing all 224 persons on board, the majority of them were Russian vacationers returning from Egypt.

The group, which primarily works in Syria and Iraq but also Afghanistan and Africa, has claimed multiple strikes in Russia’s dangerous Caucasus and other areas in recent years. It has recruited fighters from Russia and other former Soviet republics.

On Monday, Putin warned that similar strikes could occur, citing probable Western participation. He made no mention of the United States classified warning to Moscow about a probable imminent terrorist strike two weeks before the raid.

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Death Toll In Moscow Concert Hall Attack Rises To 140 After Another Victim Dies In Hospital

Three days before the incident, Putin condemned the US Embassy’s March 7 notification urging Americans to avoid crowds in Moscow, particularly concerts, as an attempt to intimidate Russians and “blackmail” the Kremlin ahead of the presidential election.

Bortnikov said Russia appreciated the warning, but it was quite vague.

SOURCE – (AP)

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Baltimore Bridge Collapses After Powerless Cargo Ship Rams Into Support Column; 6 Presumed Dead

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BALTIMORE — A cargo ship lost power and slammed into a major bridge in Baltimore early Tuesday, demolishing it in seconds and dumping it into the river in a horrifying collapse that might shut down a vital maritime port for months. Six persons were missing, probably dead.

Maryland’s governor said the ship’s crew issued a mayday call moments before the collapse that brought down the Francis Scott Key Bridge, allowing officials to restrict car traffic on the span.

The spacecraft hit one of the bridge’s supports, causing the structure to fall like a doll. A part of the span came to rest on the vessel’s bow, which caught fire and emitted dense, black smoke.

Maryland Gov. Wes Moore said that with the ship approaching the bridge at “a very, very rapid speed,” officials had barely enough time to prevent automobiles from crossing.

“These people are heroes,” Moore remarked. “They saved lives last night.”

On the 1.6-mile (2.6-kilometer) bridge, which 12 million vehicles used last year, the incident happened in the middle of the night, well before the hectic morning commute.

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Baltimore Bridge Collapses After Powerless Cargo Ship Rams Into Support Column; 6 Presumed Dead

According to Paul Wiedefeld, the state’s transportation secretary, the six unaccounted-for persons were part of a construction crew fixing potholes on the bridge.

A top executive at the company that employed the workers stated Tuesday afternoon that they were considered dead due to the depth of the water and the time since the collision.

Jeffrey Pritzker, executive vice president of Brawner Builders, said the crew was working in the middle of the bridge when it collapsed. No bodies have been found, and rescue workers resumed their search into the late afternoon.

“This was completely unexpected,” Pritzker remarked. “We do not know what more to say. We take great satisfaction in our safety measures, which include cones, signs, lights, barriers, and flaggers. But we never expected the bridge to collapse.”

Jesus Campos, who has worked on the bridge for Brawner Builders and knows several of the team, said he was told they were on break and some were sitting in their vehicles when it collapsed.

“I was there a month ago, and I know what it feels like when the trailers pass,” he said. Imagine being aware that you are falling. It is so difficult that one doesn’t know what to do.”

Rescuers plucked two persons from the water. One person was treated in a hospital and released several hours later. Although authorities believed no one was inside, multiple automobiles also entered the river.

“It looked like something out of an action movie,” said Baltimore Mayor Brandon Scott, who described it as “an unthinkable tragedy.”

According to Maryland Transportation Authority first responder radio communications acquired from the Broadcastify.com archive, a police dispatcher called immediately before the collapse to inform officers that a ship had lost its steering and requested that all traffic be stopped.

One cop who had stopped traffic said he would drive onto the bridge to notify the construction crew. But seconds later, a frightened cop exclaimed, “The entire bridge just collapsed. “Start, whoever, everybody… the entire bridge just collapsed.”

On a second radio channel for maintenance and construction personnel, someone reported that cops were blocking traffic because a ship had lost steering. There was no follow-up evacuation order, and the bridge collapsed 30 seconds later, leaving the waterway silent.

The World Association for Waterborne Transport Infrastructure reports that between 1960 and 2015, ship or barge collisions led to 35 significant bridge collapses.

The collapse is expected to cause a logistical nightmare for months, if not years, throughout the East Coast. It will halt ship movement at the Port of Baltimore, a major shipping hub. The accident will also cause congestion in cargo and commuter traffic.

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Baltimore Bridge Collapses After Powerless Cargo Ship Rams Into Support Column; 6 Presumed Dead

“Losing this bridge will devastate the entire area and the entire East Coast,” Maryland State Sen. Johnny Ray Salling said.

Speaking at a news conference near the site, Transportation Secretary Pete Buttigieg said it was too early to determine how long it would take to clear the channel, approximately 50 feet (15 meters) deep.

“I do not know of a bridge that has been constructed to withstand a direct impact from a vessel of this size,” he said.

Synergy Marine Group, which runs the Dali, said that the ship collided with a bridge pillar around 1:30 a.m. while piloted by one or more local specialists who assist in securely guiding vessels into ports. Grace Ocean Private Ltd. owns the ship.

Synergy said all crew members and the two pilots were safe, and no injuries were reported.

The governor said the ship was going at 8 knots, or around 9 mph (14.8 kph).

Jagged portions of the bridge could be seen protruding from the water’s surface. The on-ramp abruptly halted where the span had begun.

Donald Heinbuch, a former Baltimore fire chief, claimed he awoke to a powerful rumble that shook his house for several seconds. “It felt like an earthquake,” he explained.

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Baltimore Bridge Collapses After Powerless Cargo Ship Rams Into Support Column; 6 Presumed Dead

He drove to the river’s edge and could not believe what he saw.

“The ship was there, and the bridge was in the water, like it was blown up,” he said.

The bridge, which opened in 1977, crosses the Patapsco River at the entrance to a thriving harbor that connects to the Chesapeake Bay and the Atlantic Ocean. It is named for the author of “The Star-Spangled Banner.”

Wiedefeld stated that all vessels that travel into and out of the port will be suspended until further notice. However, the facility would remain available to trucks.

President Joe Biden said he plans to visit Baltimore and that the federal government will cover the entire cost of reconstruction.

“This is going to take some time,” Biden explained. “The people of Baltimore can count on us, though, to stick with them at every step of the way until the port is reopened and the bridge is rebuilt.”

According to Marine Traffic, the Dali was on its way from Baltimore to Colombo, Sri Lanka, and was flying the Singapore flag. According to the website, the container ship is around 985 feet (300 meters) long and 157 feet (48 meters) broad.

bridge

Baltimore Bridge Collapses After Powerless Cargo Ship Rams Into Support Column; 6 Presumed Dead

Inspectors discovered a fault with Dali’s machinery in June, but a more recent inspection revealed no deficiencies, according to the maritime tracking system Equasis.

The Danish shipping company Maersk said it had rented the vessel.

According to the state, the Port of Baltimore handled a record 52.3 million tons of foreign cargo worth $80 billion last year.

The president of a supply chain management firm said Americans can expect commodity shortages due to the fall in ocean container shipping and East Coast transportation.

“It’s not just the Baltimore port that will be affected,” said Ryan Petersen, Flexport’s CEO.

The collapse, however, is unlikely to impact global trade because Baltimore is not a significant container port, but its facilities are more vital for products such as farm equipment and automobiles, according to Judah Levine, head of research for global freight booking platform Freightos.

SOURCE – (AP)

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With Its Soldiers Mired In Gaza, Israel Is Fighting A Battle At Home Over Drafting The Ultra-Orthodox.

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JERUSALEM — As Israel fights a long war in Gaza, broad exemptions from mandatory military service for ultra-Orthodox men have reopened a deep schism in the country and shaken the government coalition, with Prime Minister Benjamin Netanyahu’s fellow War Cabinet members staunchly opposed to his proposed new conscription legislation.

By the end of the month, Israel’s government must introduce legislation to increase recruiting among the religious community. As the deadline approaches, public debate has become increasingly poisonous, starkly contrasting to early-war expressions of solidarity.

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With Its Soldiers Mired In Gaza, Israel Is Fighting A Battle At Home Over Drafting The Ultra-Orthodox.

So far, Netanyahu’s government has weathered the public outrage caused by Hamas’ October 7 strike, which launched the war, but the draft issue has put him in a bind. The fall of the three-member War Cabinet would jeopardize the country’s stability at a critical juncture in the conflict. However, losing the ultra-Orthodox parties would bring down his broader ruling coalition, forcing the country into new elections, as Netanyahu and his Likud party are losing in opinion polls.

“Politically, this is one of the most concrete threats to the government,” said Gilad Malach, an ultra-Orthodox researcher at the Jerusalem-based Israel Democracy Institute.

The typical Jewish male service commitment is almost three years, then several years of reserve duty. Jewish women must serve two required years. However, the politically influential ultra-Orthodox, who account for approximately 13% of Israeli society, have typically been granted exemptions provided they are enrolled full-time in religious seminaries. The exemptions and the government stipends that many seminary students get until they reach the age of 26 have outraged the general population.

The Supreme Court declared the current system discriminatory and gave the administration until April 1 to offer a bill and June 30 to pass it.

Yoav Gallant and Benny Gantz, who serve in Netanyahu’s War Cabinet, argue that the prime minister’s proposed measure does not go far enough to increase the number of ultra-Orthodox soldiers. Critics argue that some components, such as raising the exemption age, could reduce the numbers.

Gantz, Netanyahu’s main political challenger, warned that he would resign from the Cabinet if the enlistment law were reduced or if it was not passed by the deadline. Defense Minister Gallant stated that he would only accept a new law if Gantz and other centrist members of the country’s interim wartime administration agreed.

The administration consists of ultranationalist religious and Orthodox groups, which Gantz and a group of other former military generals joined in the early stages of the conflict. The merger was intended as a display of unity in the aftermath of October 7. However, the parties disagreed strongly on conscription.

Following the Hamas attack, Israel activated 360,000 reservists, its greatest mobilization since the 1973 Middle East war. Many have been freed but are anticipated to return to active duty in the following months. The increasing reserve duty and ideas of expanding mandatory service have fueled public outrage.

Israel’s Jewish majority views mandatory military service as a melting pot and rite of passage. The ultra-Orthodox argue that integrating into the army will jeopardize their generations-old way of life and that their devout lifestyle and adherence to Jewish precepts defend Israel as much as a powerful army.

“We prefer dying to serving in the Israeli army,” said Yona Kruskal, 42, a father of 11 and full-time seminary student, as he and some 200 others blocked traffic in Jerusalem last week in one of the many rallies against the conscription bill. “There’s no way you can force us to go to the army, because we are hell-bent that the army and religion contradict one another.”

As the ultra-Orthodox clashed with police during the protest, other Israelis chanted, “Shame! Shame!”

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With Its Soldiers Mired In Gaza, Israel Is Fighting A Battle At Home Over Drafting The Ultra-Orthodox.

“My friends are sitting in Gaza while you’re here, sitting on the ground,” the man said. A woman yelled at the demonstrators, saying her son was serving in Gaza to protect them.

According to Oren Shvill, founder of Brothers in Arms, a protest group representing reserve troops who oppose Netanyahu, the ultra-Orthodox benefit from the army’s protection without actively participating. “There’s one law for everyone, and it should be enforced equally,” he said.

Economists believe the system is unsustainable. With its high birthrate, the ultra-Orthodox community is the fastest-growing portion of the population, rising approximately 4% each year. Every year, some 13,000 ultra-Orthodox males reach the conscription age of 18, yet less than 10% enlist, according to the Israeli parliament’s State Control Committee, which recently convened a hearing on the issue.

“One of the things that was debatable in the past but is now much clearer is that we need more soldiers,” said Yoaz Hendel, a former Netanyahu confidant and Cabinet member who recently completed four months of reserve duty as head of a special forces unit. He stated that the service burden should be distributed fairly across all community sectors.

The shock of the October 7 attack appeared to stoke some enthusiasm among the ultra-Orthodox to serve, but no big enlistment occurred, according to Israeli media. The army refused to comment on the ultra-Orthodox enrollment rate.

The subject has long split Israel, and court rulings have consistently ruled the system wrong. However, Israeli leaders have frequently postponed, citing pressure from ultra-Orthodox parties. It’s unclear if Netanyahu will be able to do so again.

As Netanyahu’s administration advanced a legal system overhaul with support from ultra-Orthodox coalition partners who sought to overturn court rulings on conscription, the rift over exemptions grew worse last year. The administration halted the overhaul after the war broke out.

The army has attempted to accommodate the ultra-Orthodox by forming distinct battalions that allow them to keep their religious traditions while reducing interaction with women.

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With Its Soldiers Mired In Gaza, Israel Is Fighting A Battle At Home Over Drafting The Ultra-Orthodox.

Ephraim Luff, 65, a full-time seminary student in the ultra-Orthodox city of Bnei Brak, rejected such efforts, claiming that the men who enlist in these units are not “real Haredim,” as the ultra-Orthodox are known in Hebrew.

“The army is the final stage of Israeli education to make people into secular Israelis and to disconnect them from their Jewish heritage,” said Luff, who described how one of his eight children “strayed from the path” of full-time learning and served in the army as a truck driver for a year and a half.

Yitzhak Yosef, one of the country’s two chief rabbis, stated last month that the ultra-Orthodox “will all move abroad” if compelled to join. According to Malach of the Israel Democracy Institute, the comment elicited both outrage for urging Israelis to leave amid a national crisis and derision because many secular Israelis would not mind the ultra-Orthodox departing en masse.

On the contrary, Malach believes that the ultra-Orthodox leadership’s refusal to compromise, even as other segments of Israeli society make major sacrifices, has alienated a larger portion of the population.

“I don’t see a real opportunity for change in this government,” he told reporters. But if there are elections and there is a coalition without haredim or with weakened haredim, there could be a change.”

SOURCE – (AP)

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