The noose seems to be tightening around Sam Bankman-Fried after a judge revived his bail and sent the FTX founder to jail for trying to influence the statement of witnesses in the fraud brought against him. While the SEC seems to be growing cold feet in approving Bitcoin ETFs, PayPal has launched its own stablecoin.
Inflation continues to be the hottest topic when it comes to finances. While Disney is increasing streaming prices, less than 10% of Americans plan to wait until 70 to receive their social security benefits.
Here is a snapshot of financial news that made headlines in the last week.
Sam Bankman-Fried headed to jail as judge revokes bail
Sam Bankman-Fried has been sent to jail after a federal magistrate determined that the founder of FTX likely attempted to tamper with witnesses on two occasions.
Extracts from the private diaries of Caroline Ellison, the former chief of the cryptocurrency exchange’s affiliated hedge fund Alameda Research, revealed that she had a romantic relationship with the FTX founder.
Prosecutors have identified Bankman-Fried as the source of the New York Times articles that they believe were intended to intimidate Ellison.
Bankman-Fried was released on a $250 million bond. He’d been under house arrest at his parents’ home in Palo Alto, Calif., since December last year. He is awaiting trial on fraud charges arising from the collapse of his cryptocurrency exchange FTX.
Just 10% of Americans plan to wait until age 70 to claim Social Security
Most investors acknowledge that waiting longer could result in larger monthly social security payments.
Nevertheless, according to a survey of 2,000 Americans, only 10% of non-retired Americans intend to wait until age 70 to begin receiving their monthly benefits.
40% of respondents intend to begin receiving Social Security retirement benefits between the ages of 62 and 65. According to the results, 17% of respondents between the ages of 60 and 65 are on the verge of retirement.
Concern that Social Security may run out of money and cease making payments, indicating a “crisis of confidence” in the system, was cited by 44% of respondents as the leading reason for claiming benefits early.
Other reasons included:
- needing the money, which accounted for 36%
- desiring access to the money as soon as possible, which accounted for 34%
- advice to claim earlier than age 70, which accounted for 13%
PayPal launches Stablecoin
PayPal is the first major U.S. financial institution to establish its own stablecoin backed by the U.S. dollar – PayPal USD (PYUSD).
Customers who purchase PayPal USD in the coming weeks will be able to:
- transmit it to compatible external crypto wallets
- make peer-to-peer payments
- make purchases
- convert any of PayPal’s supported cryptocurrencies
Stablecoins are typically backed by a physical asset, such as commodities like gold or fiat currencies like the U.S. dollar. This allows them to maintain a relatively stable price.
This is not PayPal’s first venture into cryptocurrency. The company began enabling users to transfer, send, and receive a variety of prominent digital tokens, such as bitcoin and ether, in the past year.
Disney hikes streaming prices.
Disney has announced a big round of price hikes that will make the ad-free versions of its most popular services, Disney+ and Hulu, more than 20% more expensive.
The new monthly price for a Disney+ contract without ads would go from $10.99 to $13.99. The price of a Hulu account without ads has gone up from $14.99 a month to $17.99 a month. The new prices will go into effect in October. Disney is trying to switch to a model that puts streaming first.
The company’s streaming business lost a lot less money in the most recent quarter than it did in previous quarters. But, Disney+ lost domestic users for the second quarter in a row.
The company also said it would stop people from sharing passwords, just like Netflix has been doing recently.
AMC stock conversion plan approved
The plan to turn AMC Preferred Equity, or APE, units into common shares has been approved by Judge Morgan Zurn of the Delaware Chancery Court.
The settlement, which was passed on Friday, gives individual investors more shares, even though thousands of them were against it.
Judge Zurn’s ruling ends a long and bitter legal battle over AMC’s preferred equity units, or APEs. These put the company’s top executives against some of its retail investors and led to a lawsuit by those investors.
Retail shareholders plan lawsuit to contest UBS’ takeover of Credit Suisse
About 500 retail investors who lost money as a result of UBS’s takeover of Credit Suisse in March this year are challenging the bank’s controversial acquisition of the latter in court.
On Monday, the shareholders who will be represented by the Swiss Investor Protection Association (SASV) will file a claim with the Zurich commercial court.
It is the second class action filed by Credit Suisse shareholders against UBS. Numerous lawsuits are being pursued by wiped-out bondholders.
Credit Suisse employees have inquired about pursuing legal action following the cancellation of their AT1-related incentives. In the meantime, attorneys in the US are pursuing former Credit Suisse managers for their role in the bank’s demise.
Exxon awarded $77 million in $1.4bn claim against Venezuela
The World Bank arbitration court awarded $77 million to Exxon Mobil Corp. in a resubmitted claim worth $1.4 billion over the nationalization of Venezuela’s Cerro Negro and La Ceiba crude projects in 2007.
The award is the result of a lengthy legal battle.
It concluded when the International Centre for the Settlement of International Disputes ruled on July 10 that the majority of the $984.5 million compensation granted to Exxon had already been paid in a separate claim with the International Chamber of Commerce.
This resulted in Exxon receiving $907.5 million in 2001.
The quantity of the initial compensation awarded to Exxon was contested by the ICSID in 2017. It was annulled in part a previous ruling ordering Venezuela to pay $1.4 billion.
Exxon was the first international oil corporation to leave Venezuela after the late President Hugo Chávez nationalized the country’s oil assets a decade ago.