China cracks down harder on cryptocurrency, banning all transactions.
The clampdown comes as China’s central bank has been testing its own digital currency. The price of Bitcoin dropped on the news.
A worker in a cryptocurrency mining farm in Dujiangyan in China’s southwestern Sichuan Province.Credit…Agence France-Presse — Getty Images
China intensified its crackdown on cryptocurrency on Friday, declaring all financial transactions involving cryptocurrencies illegal and issuing a nationwide ban on cryptocurrency mining, the power-hungry process in which vast computer networks compete for newly created crypto tokens.
Bitcoin, the world’s largest cryptocurrency, dropped as much as 7 percent, to around $41,100, on the news, but recovered somewhat as the day went on.
The clampdown in China comes as the country’s central bank has been testing its own digital currency, the electronic Chinese yuan. A notice posted by the central bank explicitly called out Bitcoin and Ether, the two most popular cryptocurrencies, for being issued by “non-monetary authorities.”
George Selgin, an economist and senior fellow at the Cato Institute, said that creating a central bank digital currency and making crypto transactions illegal were part of the Chinese government’s broader effort to channel citizens away from popular private financial services providers, such as AliPay and WeChat. A state-controlled digital currency would allow the government to collect data and keep tabs on citizens’ everyday transactions and would make it easier for the government to control access to an individual’s funds, among other concerns.
“This is really about establishing a state monopoly in payments,” he said. “The most obvious implication is that the state will have more opportunities to monitor citizens’ economic activity.”
In a joint statement by 11 Chinese government entities, the authorities vowed to work closely to punish “illegal” crypto mining activities to help prevent the “hidden risks caused by the blind and disorderly development” of the industry and to help the country achieve its carbon reduction goals.
China’s central bank also announced that other activities tied to cryptocurrencies, like trading, token issuance and derivatives for virtual currencies, would be strictly prohibited. The bank reiterated that it was illegal for offshore crypto exchanges to serve customers in mainland China, one way that traders there have skirted a longstanding ban on domestic crypto exchanges.
The moves on Friday were the latest signal of Beijing’s determination to turn the screws on cryptocurrencies. China banned domestic cryptocurrency exchanges years ago, but trading has continued clandestinely by other means. And China has remained a major hub for cryptocurrency mining operations, in which computer farms compete to solve complex equations in return for Bitcoin, despite restrictions on the practice.
In May, China’s State Council, the government’s main administrative cabinet, vowed to crack down on Bitcoin trading and mining, leading local authorities in several parts of China to shut down crypto mining operations. As recently as 2017, Chinese mining groups generated more than two-thirds of all Bitcoin issued daily.
In terms of the environmental impact of crypto mining, there are probably only limited benefits derived from China’s latest announcement, said Alex DeVries, an economist in the Netherlands who studies the environmental effects of the crypto industry.
“Altogether, as long as other countries don’t implement similar policies, the overall effect on the global environmental impact of mining will remain low,” he said.
A regulatory blitz by the Chinese authorities is also cracking down on the country’s tech, education and property sectors.
China is not the only country to have restricted access to crypto exchanges and related services. But crypto traders have found workarounds, masking their locations or using peer-to-peer methods to buy and sell digital currencies.
U.S. officials have also recently expressed concern about users gaining access to offshore crypto exchanges that operate under different rules. The exchanges are required to block access to U.S. users, which has prompted some to hop countries in search of more amenable jurisdictions.
Worldwide, governments are racing to keep up with developments in the $2 trillion cryptocurrency industry, which is growing fast and beginning to disrupt traditional banking and finance. Some officials fear these digital tokens could become a systemic risk, threatening the wider financial system. The rules on what is allowed in cryptocurrency vary from country to country, to the dismay of industry executives who say a lack of regulatory clarity or overly prescriptive rules hamper innovation.
U.S. banking regulators have held interagency “crypto sprints” in recent months to lay out pathways for regulation. Financial regulators have met under the Treasury Department’s guidance to prepare a report this fall on the risks of a particular kind of cryptocurrency, known as a stablecoin, that has exploded in use in recent months.
In some smaller nations, like El Salvador, which recently adopted Bitcoin as legal tender, the open, global financial network based on cryptocurrencies is being promoted as a tool to foster financial inclusion and economic growth.
The Bahamas created a digital “sand dollar” — a version of the Bahamian dollar that is the most advanced central bank digital currency in the world — and has welcomed crypto businesses interested in relocating. This week, the crypto derivatives exchange FTX, a large crypto platform, announced that it would move from Hong Kong to the Bahamas, which has “one of the world’s few comprehensive crypto regulatory structures,” the exchange’s founder, Sam Bankman-Fried, said in a statement explaining the move.
Binance, the world’s biggest cryptocurrency exchange, was founded by Changpeng Zhao in China in 2017, but moved to Japan within months, after Chinese officials cracked down on crypto trading platforms. After other moves, including at one point saying it had no official headquarters, Binance announced in July that it would create regional headquarters in every area of the world where it operated.
“Most people don’t understand how much work we do to follow the rules,” said Mr. Zhao, who is now based in Singapore.
Erin Griffith (@eringriffith) and Erin Woo (@erinkwoo), two of our tech reporters, are covering the trial of Elizabeth Holmes, who dropped out of Stanford University to create the blood testing start-up Theranos at age 19 and built it to a $9 billion valuation and herself into the world’s youngest self-made female billionaire — only to flame out in disgrace after Theranos’s technology was revealed to have problems.
Follow along here or on Twitter as she is tried on 12 counts of wire fraud and conspiracy to commit wire fraud. The trial is generally held Tuesdays, Wednesdays and Fridays.
We’re comparing Rosendorff’s time at the University of Pittsburgh to his time at Theranos. At Theranos, complaints about test results were “much more frequent,” and he “felt pressured to defend the company’s results to physicians,” he said.
Theranos devices failed so frequently that it raised questions about the accuracy of the results, Rosendorff testifies. Performance of Theranos assays was worse than non-Theranos analyzers.
Rosendorff is now discussing quality control. As we learned in Cheung’s testimony, quality control happened once a day, and machines would be recalibrated if they failed. This was a frequent discussion topic at Theranos, he testifies.
Rosendorff had a meeting w Holmes where he expressed his concerns. She was very nervous and was not her usual composed self, he said: She was trembling, knee was shaking, she was very upset.
In an email to Holmes, Rosendorff wrote that “A few more weeks to sort through these medical and logistical issues, and getting the proper level of training and staffing would help us tremendously.”nd staffing would help us tremendously.”
Renters living in apartment buildings with federally backed mortgages may get an eviction reprieve — even though a broad federal moratorium on evictions during the Covid-19 pandemic expired last month.
The federal agency overseeing Fannie Mae and Freddie Mac — the two big government-controlled mortgage finance firms — on Friday extended the time period for those firms to grant mortgage relief to apartment owners. Landlords that accept the relief cannot evict a tenant for nonpayment of rent.
Sandra L. Thompson. acting director of the Federal Housing Finance Authority, said the extension was needed given the “uncertain nature of this pandemic.” The forbearance period for apartment owners with federally backed mortgages was set to expire this month; it also includes an eviction ban.
The F.H.F.A. did not a put an end date on the program, which is available to landlords showing a financial hardship because of the pandemic.
It is unclear how many owners would accept the forbearance offer and how many renters would be covered. When the U.S. Supreme Court ruled in late August that the Biden administration could not extend the federal eviction moratorium without Congressional approval, it was estimated that hundreds of thousands of people were in immediate danger of eviction.
The extension comes as the federal government and states are struggling to deliver $46 billion in emergency rental assistance approved earlier this year as part the administration’s pandemic relief package. The Treasury Department on Friday said that as of the end of August, it had distributed $7.7 billion in aid to more than one million households.
Fannie and Freddie do not make home loans but instead buy mortgages and package them into government-backed securities that are guaranteed in the event of default.
The federal government could run out of cash and start missing payments on things as diverse as Social Security and military pay sometime between Oct. 15 and Nov. 4, according to a new analysis from the Bipartisan Policy Center.
That analysis, released on Friday as Congress is debating whether to lift America’s borrowing cap, showed a narrower window during which the United States could default on its debt if the limit on what the United States can borrow is not raised.
Republicans and Democrats in Congress have shown no signs of progress at breaking a stalemate over raising or suspending the debt limit — which restricts the government’s ability to borrow money to pay its bills. The congressional dysfunction leaves the United States potentially less than a month away from what economists warn would be a catastrophic economic shock.
“New data demonstrate that Congress has only weeks to address the debt limit,” Shai Akabas, director of economic policy at the Bipartisan Policy Center, said in a statement. “If they don’t, the U.S. government risks missing or delaying critical bills that will come due in mid-October that millions of Americans rely on, from military paychecks and retirement benefits to advanced child tax credit payments.”
The United States officially hit its statutory debt limit in late July, but the Treasury Department has been using “extraordinary measures” to curb or delay investments and stave off a default. Predicting the true deadline is harder this year because government payments related to the pandemic have reduced clarity about when certain taxes will be collected and when federal money is flowing out the door.
If Congress fails to act, the United States will be in uncharted territory.
In its analysis, the policy center said that if the true deadline for breaching the debt limit was Oct. 15, the earliest end of its projected range, the Treasury Department would be about $265 billion short of paying all its bills through mid-November. About 40 percent of the money that is owed would go unpaid.
“Realistically, on a day-to-day basis, fulfilling all payments for important and popular programs would quickly become impossible,” the report said, pointing to Social Security, Medicare, Medicaid and military active-duty pay.
The Treasury Department has said it has no official contingency plan if the debt limit is breached. However, in previous standoffs, Treasury officials have contemplated what they would do.
The Bipartisan Policy Center notes that the Treasury could try to prioritize payments, which essentially means paying some bills and not others. It could also choose to delay all bills and then make payments once enough revenue had been received to cover the payments due for an entire day.
However, either of these situations would present legal and logistical problems and probably shake up the markets as the Treasury Department struggled to pick winners and losers.
“The reality would inevitably be chaotic,” the report said.
A dramatic scene played out on “The View” on Friday morning when two of the show’s hosts, Ana Navarro and Sunny Hostin, were directed to leave the set live on the air after both had apparently tested positive for the coronavirus.
“The View” had just returned from a commercial break about 15 minutes into the show and the four hosts of were on the verge of introducing Vice President Kamala Harris for an in-person interview. ABC News had been billing it as Ms. Harris’ first in-studio interview since taking office.
Then the mayhem began.
“OK, we’re back, there seems to be something happening here that I’m not 100 percent aware of,” said Joy Behar, one of the hosts, as she glanced around the set, looking perplexed. “Can someone please apprise me of the situation?”
In the background, a producer was overheard saying, “I need the two of you to step off for a second,” apparently gesturing to Ms. Navarro and Ms. Hostin. Both came off the set.
“So shall I introduce the vice president?” Ms. Behar said, looking over to a producer.
“Yes,” the producer replied, before another person off screen barked, “No!”
“As we always do in television when we’re in a tight spot, we’ll be right back,” Ms. Behar said, before the show abruptly went into a commercial break.
When “The View” returned after a five-minute break, Ms. Behar told viewers what happened.
“OK, so since this is going to be a major news story any minute now, what happened is Sunny and Ana apparently tested positive for Covid,” Ms. Behar said. “No matter how hard we try, these things happen, they probably have a breakthrough case. They’ll be OK, I’m sure, because they are both vaccinated up the wazoo.”
ABC News did not immediately return requests for comment. Whoopi Goldberg, the show’s fifth host, was not on set on Friday.
For the next half-hour, Ms. Behar and her remaining co-host, Sara Haines, scrambled and took questions from the studio audience as they tried to, as Ms. Behar put it, “tap dance” their way through what would have been an interview with the vice president.
Ms. Harris was ushered to a remote location and joined the show for a brief interview via satellite in the final 10 minutes of the show.
WPP, the world’s largest advertising group, agreed to pay more than $19 million to settle charges from the Securities and Exchange Commission that it allowed bribery and problematic accounting practices at subsidiaries in Brazil, China, India and Peru.
The S.E.C. charged WPP, which is based in London, with violating the Foreign Corrupt Practices Act by aggressively taking control of smaller firms in high-risk markets and then allowing the leaders of the new subsidiaries to flout WPP’s internal accounting and compliance rules. When faced with repeated warning signs of corruption or loss of control, WPP did not properly respond, according to regulators.
The S.E.C. pointed to one example in India, where a WPP subsidiary bribed Indian government officials for advertising contracts even after the parent company received seven anonymous complaints.
“A company cannot allow a focus on profitability or market share to come at the expense of appropriate controls,” Charles E. Cain, chief of the S.E.C.’s Foreign Corrupt Practices unit, said in a statement. “Further, it is essential for companies to identify the root cause of problems when red flags emerge to prevent a pattern of corrupt behavior from taking hold.”
WPP did not admit or deny the findings but agreed to stop violating the regulations and pay $19.2 million in fines, according to regulators. The company said in a statement that the charges related to activities that took place until 2018 and that “new leadership has put in place robust new compliance measures and controls, fundamentally changed its approach to acquisitions, cooperated fully with the commission and terminated those involved in misconduct.”
Last year, roughly 2,000 public companies in the United States held their annual shareholders meetings virtually, according to Broadridge Financial Solutions. That was up from about 300 in 2019.
Now, a group of shareholder activists are pushing companies to keep those meetings virtual, or add a remote option, permanently. They are having some success, the DealBook newsletter reports.
This week, the S.E.C. ruled that two companies, Brinker International and Campbell Soup, had to allow a shareholder vote on whether the remote option for meetings would continue. The companies had asked the S.E.C. to allow them to exclude the proposals at their upcoming meetings. After the ruling, Brinker decided to make its meeting open to remote attendees. Campbell will hold a vote on the matter at its next meeting.
Shareholder meetings have traditionally been in-person affairs. Companies generally prefer that format because it limits attendees — and with it questions that board members might face. Shareholder advocates have long said that virtual meetings level the playing field for smaller investors who might not have the resources to travel to a meeting.
Virtual meetings “fundamentally change the scope of shareholder engagement and accessibility,” said Matthew Prescott, a shareholder advocate and senior director at the Humane Society. His group sponsored the proposals about virtual meetings at Brinker and Campbell.
Shareholders have long had the ability to vote remotely before a meeting. A study this year found that meetings held virtually did not tend to generate significantly more shareholder engagement than in-person meetings.
“These shareholder proposals will not garner any meaningful support,” said Douglas Chia, a corporate governance expert and the author of the study. “My prediction: The S.E.C. has now opened the door for proposals to do away with virtual-only annual meetings, so we’ll see a lot of those being submitted soon.”
New York became the first city in the nation to take aggressive steps to improve conditions for food delivery workers, approving on Thursday a groundbreaking package of legislation that will set minimum pay and address the plight of couriers employed by app-based services like Grubhub, DoorDash and Uber Eats.
The legislation prevents the food delivery apps and courier services from charging workers fees to receive their pay; makes the apps disclose their gratuity policies; prohibits the apps from charging delivery workers for insulated food bags, which can cost up to $50; and requires restaurant owners to make bathrooms available to delivery workers.
Other cities have taken steps to restrict the food delivery apps, but no city has gone as far as New York, which is home to the largest and most competitive food delivery market in the country, Jeffery C. Mays reports for The New York Times.
Stock on Wall Street fluctuated in midday trading on Friday after major indexes managed to recuperate some of the losses they posted earlier in the week.
The S&P 500 was little changed, heading to close the week with a modest gain. Markets had started to recover on Wednesday after the S&P 500 had its sharpest daily decline since May on Monday, prompted by worries about China Evergrande, the real estate company struggling to pay its debts.
Shares of China Evergrande Group fell more than 11 percent in Hong Kong trading on Friday, as a deadline to make an $83 million interest payment passed without an announcement from the company about whether it had met its commitments. China’s Shanghai Composite Index fell 0.8 percent, while Hong Kong’s Hang Seng Index dipped 1.3 percent.
Cryptocurrencies fell on Friday after China intensified its crackdown on cryptocurrency, calling all crypto mining activities “illegal.” Bitcoin fell 4.2 percent to $42,156.50, according to CoinDesk. Ethereum fell more than 7 percent to $2,897.20. Robinhood, the stock trading app, and Coinbase, the cryptocurrency trading platform, each fell more than 1 percent.
Nike fell 6.3 percent after the sportswear company reported on Thursday it would lower its sales forecast as it continues to experience supply chain disruptions.