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Inside the Frantic Texts Exchanged by Crypto Executives as FTX Collapsed

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Inside the Frantic Texts Exchanged by Crypto Executives as FTX Collapsed

The day earlier than the embattled cryptocurrency change FTX filed for chapter, Changpeng Zhao, the chief govt of the rival change Binance, despatched an alarmed textual content to Sam Bankman-Fried, FTX’s founder.

Mr. Zhao was involved that Mr. Bankman-Fried was orchestrating crypto trades that would ship the business right into a meltdown. “Cease now, don’t trigger extra harm,” Mr. Zhao wrote in a bunch chat with Mr. Bankman-Fried and different crypto executives on Nov. 10. “The extra harm you do now, the extra jail time.”

FTX and its sister hedge fund, Alameda Analysis, had simply collapsed after a run on deposits uncovered an $8 billion gap within the change’s accounts. The implosion unleashed a crypto disaster, as companies with ties to FTX teetered on the point of chapter, calling the way forward for the complete business into query.

The sequence of a couple of dozen group texts between Mr. Zhao and Mr. Bankman-Fried on Nov. 10, which have been obtained by The New York Occasions, present that key crypto leaders feared that the state of affairs might get even worse. Their frantic communications supply a glimpse into how enterprise is carried out behind the scenes within the business, with not less than three high officers from rival firms exchanging messages in a bunch on the encrypted messaging app Sign.

The texts additionally present that business leaders have been acutely conscious that the actions of a single agency or fluctuations within the worth of 1 digital forex might destabilize the entire business. The exchanges turned more and more tense as Mr. Bankman-Fried and Mr. Zhao traded barbs.

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Earlier that week, Mr. Zhao had agreed to purchase FTX and save the change, earlier than backing out of the deal. Within the Nov. 10 texts, he appeared sure that FTX wouldn’t survive, and anxious that it might carry the remainder of the business down with it. Throughout a crypto crash in Might, two cash had plunged in worth, triggering an industrywide meltdown and forcing a number of outstanding companies out of business.

Within the Nov. 10 texts, Mr. Zhao particularly accused Mr. Bankman-Fried of utilizing his hedge fund to drive down the worth of Tether, a so-called stablecoin whose value is designed to stay at $1.

Tether, which is issued by an organization with the identical identify, is a linchpin of crypto buying and selling worldwide and is often utilized by digital asset fanatics to conduct transactions. Business insiders have lengthy feared that if Tether’s value fell, it could trigger a domino impact that may carry the business to its knees. (Tether finally didn’t find yourself shedding its $1 peg.)

A spokeswoman for Binance declined to touch upon the textual content exchanges. In an announcement, Mr. Bankman-Fried, 30, stated Mr. Zhao’s claims have been “absurd.”

“Trades of that measurement wouldn’t make a cloth influence on Tether’s pricing, and to my information neither myself nor Alameda has ever tried to deliberately depeg Tether or another stablecoins,” he stated. “I’ve made a variety of errors over the previous 12 months however this isn’t considered one of them.”

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A spokeswoman for Tether stated in an announcement that the corporate had “demonstrated its resilience to assaults.” She added that FTX’s actions “don’t mirror the ethos and dedication of a whole business.”

FTX, a market the place individuals might purchase and promote digital currencies, collapsed early final month when clients rushed to withdraw deposits, partly in response to tweets by Mr. Zhao that referred to as the corporate’s funds into query. FTX quickly folded, sparking investigations by the Justice Division and the Securities and Trade Fee into whether or not the crypto change had damaged the legislation by utilizing its clients’ funds to prop up Alameda.

The Justice Division can also be investigating whether or not Mr. Bankman-Fried engaged in market manipulation within the spring by making trades that contributed to the failure of two outstanding cryptocurrencies.

For years, critics of the crypto business have stated that Tether may be susceptible to a collapse. Tether has lengthy claimed its stablecoins are backed by money and different conventional property, and that in a disaster, all its clients might redeem their cash for the equal quantity in {dollars}. However regulators have beforehand accused Tether of mendacity in regards to the standing of its reserves, sowing doubts in regards to the coin’s reliability.

In one of many Nov. 10 messages to the group chat, Mr. Zhao identified a $250,000 commerce by Alameda that he stated was designed to destabilize Tether. The commerce was seen on the blockchain, a public ledger of cryptocurrency transactions that anybody can view.

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In response to Mr. Zhao’s accusations, Mr. Bankman-Fried appeared nonplused. “Huh?” he stated. “What am I doing to stablecoins?”

“Are you claiming that you simply assume that $250k of USDT buying and selling would depeg it?” he added, utilizing a typical shorthand to seek advice from the Tether forex.

Mr. Zhao responded that he didn’t assume a commerce of that measurement would achieve destroying Tether, however that it might nonetheless trigger issues.

“My trustworthy recommendation: cease doing every little thing,” Mr. Zhao stated. “Placed on a go well with, and return to DC, and begin to reply questions.”

“Thanks for the recommendation!” Mr. Bankman-Fried shot again.

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Emily Flitter contributed reporting.

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Column: The GOP’s suicidal shutdown plan will murder America’s safety net

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Column: The GOP’s suicidal shutdown plan will murder America’s safety net

It’s all well and good to treat the House Republicans’ careening toward a government shutdown as a cabaret farce staged for our amusement.

However, the threat to ordinary Americans, especially those dependent on government programs, is no joke.

Even if the Republicans don’t provoke the shutdown currently likely to begin at 12:01 a.m. Sunday, the budget cuts House Speaker Kevin McCarthy (R-Bakersfield) has said he would support to meet the demands of his caucus’ far-right wing would devastate government assistance to the most vulnerable Americans.

As outlined by the Center for American Progress and the Center on Budget and Policy Priorities, two progressive think tanks working from official communications including the budget resolution released Sept. 20 by House Budget Committee Chair Jodey Arrington (R-Texas), they would involve these cuts in the social safety net:

  • A cut of $14.7 billion, or 77%, in Title I education grants to school districts with high levels of poverty, which fund services and supports for students from low-income or disadvantaged backgrounds. The CBPP calls this funding “a core federal support for K-12 education.”

The ancient Greek philosopher Diogenes went about with a lantern in search of an honest man. We don’t even need that much: Just a man with a hint of steadfastness in his makeup. Apparently we’ll have to keep looking.

  • Reduction of the fruit and vegetable benefit in the U.S. Department of Agriculture’s Special Supplemental Nutrition Program for Women, Infants and Children (WIC) by 56% to 70%, affecting about 5 million participants.
  • Unsustainable reductions in low-income assistance programs for housing and heating.
  • $1.9 trillion in Medicaid cuts over 10 years.

These cuts go well beyond those agreed upon in the debt-ceiling negotiations last May, which McCarthy accepted.

As a sop to the Republicans’ rich patrons, the House caucus would rescind all of the $88 billion in additional funding for the Internal Revenue Service that was enacted as part of last year’s Inflation Reduction Act.

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This exceeds the $21-billion cut in the debt-ceiling negotiations. It’s the usual GOP penny-wise-and-plain-foolish approach to IRS funding, since it hamstrings the agency’s enforcement capabilities and taxpayer services such as phone advice.

Every dollar spent on enforcement yields multiples in recovered taxes. The IRS reported in July that it had recovered $38 million in delinquent taxes from more than 175 high-income taxpayers in previous months, using the enforcement funding provided by the Inflation Reduction Act. Obviously, that sticks in the craw of a party devoted to protecting its patrons from paying their obligations.

The absurd truth of all this “negotiating” is that it won’t help Speaker McCarthy, America’s most outstanding political invertebrate, get a funding proposal through his chamber that would be even remotely acceptable to the Senate. That includes Senate Republicans, who have signed on to a bipartisan spending scheme.

There are doubts that McCarthy can get any proposal through his caucus, which is in effect controlled by extremists who keep moving the goalposts by insisting on ever more draconian spending cuts. They show every sign of determination to shut the government down this weekend, even though it’s a political article of faith that the public always blames the GOP for shutdowns (as it should), leading to disaster at the ballot box.

The lack of character among congressional Republicans, not excepting those aligned with McCarthy, is truly amazing. These are people who have no compunctions about slandering working Americans while taking every opportunity themselves for slacking off.

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Rep. Garret Graves (R-La.), one of McCarthy’s lieutenants, remarked during the debt-ceiling negotiations that Democrats were “willing to default on the debt so they can continue making welfare payments for people that are refusing to work.”

The serene nerviness of this slander was truly impressive, given that the House of Representatives had taken 12 of 20 workdays off in April and 10 of 22 workdays (not counting Memorial Day) off in May. Overall, the House has been scheduled to be in session only 117 days in 2023, fewer than half of the 240 days most of the rest of us are at work.

The House took off the entire month of August and didn’t return to session until Sept. 12, all while the possible shutdown was looming. The rest were officially designated “district work days,” to which we can only respond, “Oh, sure.”

Graves has resurfaced during the shutdown negotiations, telling the Washington Post that the Republicans’ “bottom line is we’re singularly focused right now on achieving our conservative objectives,” which include “huge savings.”

As the Post toted up the numbers, those savings involved “taking more than $150 billion per year out of the part of the budget that funds child care, education subsidies, medical research and hundreds of additional federal operations.”

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If there’s a silver lining in the House GOP’s performative horseplay, it’s that it has cured the political press of treating the standoff as a symptom of congressional dysfunction. It’s not; as is being reported more accurately and sensibly in recent days, it’s a symptom of Republican dysfunction and, more than that, McCarthy’s dysfunction.

No one doubts that a workable budget plan can be enacted by the House. McCarthy’s problem is that it would involve House Democrats agreeing to get it over the finish line. But any action that requires him to reach agreement with the Democrats would provoke his own right wing to mount an ouster campaign. So McCarthy is as guilty as the rest of them.

The ancient Greek philosopher Diogenes went about with a lantern in search of an honest man. We don’t even need that much: Just a man with a hint of steadfastness in his makeup. Apparently we’ll have to keep looking.

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Tesla sued for ‘widespread and ongoing’ racial harassment at California plant

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Tesla sued for ‘widespread and ongoing’ racial harassment at California plant

The U.S. Equal Employment Opportunity Commission is suing Tesla Inc. for “widespread and ongoing” racial harassment of its Black employees and for retaliating against workers who spoke out about the problem, the federal agency announced Thursday.

Since at least 2015, “Black employees at Tesla’s Fremont, California, manufacturing facilities have routinely endured racial abuse, pervasive stereotyping, and hostility as well as epithets,” the commission said in a statement.

The EEOC added: “Black employees regularly encountered graffiti, including variations of the N-word, swastikas, threats, and nooses, on desks and other equipment, in bathroom stalls, within elevators, and even on new vehicles rolling off the production line.”

The lawsuit was brought by the EEOC’s San Francisco District Office, which has jurisdiction over Northern California, northern Nevada, Oregon, Washington, Alaska, Idaho and Montana.

EEOC officials said the lawsuit is seeking compensatory and punitive damages “and back pay for the affected workers, as well as injunctive relief designed to reform Tesla’s employment practices to prevent such discrimination in the future.”

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EEOC Chairperson Charlotte A. Burrows said the lawsuit “makes clear that no company is above the law.”

“The EEOC will vigorously enforce federal civil rights protections to help ensure American workplaces are free from unlawful harassment and retaliation,” she said.

Attempts to reach officials at Tesla for comment were unsuccessful.

Tesla, the world’s most valuable car company, faces similar action on several other fronts.

In February, the California Department of Fair Employment and Housing filed a lawsuit on behalf of more than 4,000 current and former Black Tesla workers — the largest racial discrimination suit ever brought by the state based on number of workers affected.

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In that suit, three former employees alleged that racist slurs in English and Spanish were often aimed at Black employees by co-workers and supervisors. They said Tesla segregated Black workers into separate areas, gave them the hardest tasks and routinely denied them promotions. And they alleged that when they informed the company about racist treatment, their complaints went ignored or they were fired.

Tesla disputed the former employees’ accounts, stating that the three workers did not complain to the company about racism and that any discipline they received was the result of their own workplace behavior.

“Race plays no role in any of Tesla’s work assignments, promotions, pay or discipline,” attorneys for the company said in a statement at the time. “Tesla prohibits discrimination, in any form.”

Thursday’s lawsuit puts a different kind of pressure on Tesla, said attorney Clifton W. Albright, founding partner and president of Albright, Yee & Schmit, a labor and employment law firm in downtown Los Angeles.

“The EEOC’s preference is to resolve issues quietly…. They don’t have a dog in this fight,” he said, unlike lawsuits filed by private firms or civil rights organizations.

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“For the EEOC to come out so strongly, they must think there is significant evidence that the employer refuses or fails to recognize or address.”

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The unionization wave hits L.A. area bubble tea cafes

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The unionization wave hits L.A. area bubble tea cafes

Six Boba Guys locations in Los Angeles County will become the first unionized boba stores in California after a successful election, the union said Wednesday.

The bobaristas will join the California Retail & Restaurant Worker Union, which also represents workers at Genwa. The Los Angeles Korean barbecue restaurant chain unionized in 2021.

“When companies remain neutral and do not interfere with anti-union campaigns … the workers will overwhelmingly support unionizing of their workplace,” said CRRWU President José Roberto Hernández.

Hernández said the union had been engaging with workers for the last six months. They filed for a union with the National Labor Relations Board in July and counted the results of the mail-in ballot election Wednesday afternoon. Boba Guys will be the first unionized boba stores in California, if not the country, Hernández said.

CRRWU also represents workers in ongoing unionization efforts at Korean grocery outlet Hannam Chain and at air purifier manufacturer Coway.

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“We want to publicly express our support of the labor vote conducted by the National Labor Relations Board and [CRRWU],” Andrew Chau, co-founder and CEO of San Francisco-based Boba Guys, said in a statement. “We have always believed in the right to organize and have cooperated with CRRWU and the NLRB throughout the entire process.”

Chau encouraged other businesses to “follow suit and open up the conversation on the much-needed dialogue surrounding labor in this country.”

Last fall, the boba chain — known for its drinks made with organic milk, loose-leaf teas and homemade syrups — faced backlash after firing a worker from its flagship store in San Francisco’s Mission District; the worker said Boba Guys told her it was because she had made “inappropriate, disparaging” comments to co-workers that were sexual in nature, but she believed she had been fired for posting about unions in a company Slack channel.

At that store, several workers publicly complained of reduced hours, a decrease in time given to open and close stores, and fewer people working per shift. They also spoke of working through heat waves without air conditioning, dealing with vermin and having their hours cut when they took their concerns to management.

The company eventually permanently closed that location.

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Carmen Lau, a former manager at Boba Guys’ Culver City shop, said workers had been unhappy for months about their working conditions but weren’t sure what they could do about it.

“How do you fix it? How do you do more than just talk to the people in charge who have heard your complaints a number of times, acknowledge [them], but there’s no follow through?” Lau said.

She left the company in May for another professional opportunity, but also because of increasing demands at work and issues that remained unaddressed, she said.

“The increasing expectations for work, just having less time to prepare and prepare all the ingredients for opening — I found that it was getting really impossible to meet those expectations,” Lau said.

News of what happened at the Mission District store spread rapidly and drove a lot of the desire to push for increased benefits and protections, said Stephen Lightfoot, who works at the Boba Guys location in North Hollywood.

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As an actor and sound designer, Lightfoot was well aware of the benefits joining a union could bring workers and was active in spreading the word to his colleagues, who were “very excited,” he said.

Los Angeles has become a center of labor activity as screenwriters, actors, hotel employees and city staffers went on strike over the summer, and there are unionization efforts underway at companies including Starbucks, Amazon.com and Trader Joe’s.

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