Federal Reserve members, in their most recent meeting, gave little indication of cutting interest rates anytime soon, particularly as inflation remains well above their goal of 2%, according to minutes released Tuesday 21st November 2023.
The detail of the meeting held 31st October – 1st November 2023, showed that Federal Open Market Committee (FOMC) members are still concerned that inflation could be stubborn or move higher, and that more may need to be done.
They indicated that policy would need to stay ‘restrictive’ at the very least, inflation is on a convincing move back to the central bank’s 2% goal.
Stan Lee was an American comic book writer, editor, publisher, and producer. He rose through the ranks of a family-run business called Timely Comics which would later become Marvel Comics.
Art illustration of a comic book page.‘With great power there must also come great responsibility!’
Tech execs have expressed concern that the development of artificial intelligence (AI) is concentrated in the hands of too few companies, potentially giving them too much power. OpenAI’s ChatGPT marked the start of what many in the industry have called an AI arms race, as tech giants including Microsoft and Google have sought to develop and launch AI models.
A number of tech execs have said that they feel users have lost control of their data online and that it is being harnessed by technology giants to feed their profits.
The development of artificial intelligence (AI) is concentrated in the hands of too few companies, potentially giving them excessive control over the rapidly evolving technology.
OpenAI’s ChatGPT
An explosion of interest in AI was sparked by OpenAI’s ChatGPT late last year thanks to the novel way in which the chatbot can answer user prompts. Its popularity contributed to the start of what many in the tech industry have called an AI arms race, as tech giants including Microsoft and Google seek to develop and launch their own artificial intelligence models. These require huge amounts of computing power as they are trained on massive amounts of data.
Meredith Whittaker reportedly said of large tech companies and the current deployment of AI…
‘Right now, there are only a handful of companies with the resources needed to create these large-scale AI models and deploy them at scale. And we need to recognize that this is giving them inordinate power over our lives and institutions’,Meredith Whittaker, president of encrypted messaging app Signal, is reported to have said. ‘We should really be concerned about, again, a handful of corporations driven by profit and shareholder returns making such socially consequential decisions’.
Whittaker previously spent 13 years at Google but became disillusioned in 2017 when she found out the search giant was working on a controversial contract with the Department of Defence known as Project Maven. Whittaker grew concerned Google’s AI could potentially be used for drone warfare and helped organize a walkout at the company that involved thousands of employees.
‘AI, as we understand it today, is fundamentally a technology that is derivative of centralized corporate power and control’, Whittaker reportedly said. ‘It is built on the concentrated resources that accrued to a handful of large tech corporations, largely based in the U.S. and China via the surveillance advertising business model, which gave them powerful computational infrastructure and huge amounts of data; large markets from which to pull that data; and the ability to process and structure that data in ways useful for creating new technologies.’
In essence, BIG TECH has far too much power in AI technology.
Tim Berners-Lee
The inventor of the web, Tim Berners-Lee, has also raised concerns about the concentration of power among the tech giants. Jimmy Wales, the founder of Wikipedia, says it is the state of social media that is of particular concern right now. On AI, however, he feels that while the technology giants now are leading the way, there is space for disruption.
Big tech and social media giants are inflicting profound damage on our society, and he believes AI could make this worse.
Binance is still open for business and is now being run by, Richard Teng. But who is the new boss of Binance?
Mr Teng, from Singapore joined Binance just over two years ago as the chief executive of the Singapore business. That was the year when Binance came under a Justice Department investigation, and as regulatory scrutiny of the company and Zhao intensified. Richard Teng was rapidly climbing the ranks in the background.
He only stayed in his original position as the Singapore CEO for five months, according to his LinkedIn page, before he was promoted to regional head of Europe, Asia and the Middle East and North Africa in April 2023.
Mr Teng later moved to become head of regional markets in May 2023 before he was appointed to the top job on Tuesday 21st November 2023.
In announcing his successor, Mr Zhao called Mr Teng a ‘highly qualified leader‘, adding that ‘with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth’.
Traditional financial background
Prior to joining Binance, Mr Teng worked in the more traditional financial sectors as a director of corporate finance at the Monetary Authority of Singapore (MAS) and a chief regulatory officer of the Singapore Exchange (SGX). He then moved on to the become chief executive of the Abu Dhabi Global Market (ADGM), an international financial centre in the United Arab Emirates, where he stayed for six years. The ADGM regulates the trading of digital assets.
In a statement on Wednesday 22nd November 2023, Mr Teng said he was honoured to take this position, adding that he would focus on reassuring Binance’s 150 million users about ‘the financial strength, security and safety of the company’.
Despite this, Mr Teng has reiterated that Binance is ‘here to stay‘, adding that company’s foundation stands ‘stronger than ever’.
Binance chief Changpeng Zhao pleaded guilty Tuesday to criminal charges and stepped down as the company’s CEO as part of a $4.3 billion settlement with the Department of Justice, according to court documents.
The plea arrangement with the U.S. government resolves an investigation into the world’s largest cryptocurrency exchange.
Zhao said Tuesday in a post on X, that he had ‘made mistakes’ and ‘must take responsibility’. He said Richard Teng, the company’s former global head of regional markets, is the new CEO of Binance.
Action taken against Binance
The action against Binance and its founder was a joint effort by the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department. The Securities and Exchange Commission (SEC) was absent.
Treasury Secretary Janet Yellen reportedly said in a release Tuesday 21st November 2023 that the cryptocurrency exchange permitted ‘illicit actors’ to make transactions that supported activities such as terrorism and illegal narcotics and that it allowed more than 1.5 million virtual currency trades that violated U.S. sanctions.
Plea deal
Zhao personally pleaded guilty to violating and causing a financial institution to violate the Bank Secrecy Act, according to the plea agreement. The DOJ is also recommending that the court impose a $50 million fine on Zhao.
Zhao has been released on a $175 million bond secured by $15 million in cash and has a sentencing hearing scheduled for 23rd February 2024.
Continue to operate
Binance will continue to operate but with new strict rules. The company will be required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money-laundering standards. The company is required to appoint an independent compliance monitor.
The case against Binance shows that three criminal charges were brought against the exchange, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy. Binance has agreed to forfeit $2.5 billion to the U.S. government, as well as to pay a fine of $1.8 billion.
SEC takes aim too
The SEC targeted the company with a lawsuit in June 2023, alleging that Binance was running an illegal securities exchange and mishandling customer funds.
The SEC also challenged rival crypto exchange Coinbase with a similar lawsuit, alleging it is operating as an unauthorized securities exchange, broker and clearing agency.
And on Monday 20th November 2023 the SEC sued Kraken, alleging that the exchange commingled $33 billion in customer crypto assets with its own company assets, creating the potential for a significant risk of loss to its users.
Binance battered as CEO Changpeng Zhao (CZ) pleads guilty to federal charges, steps down.
In the charges brought against Binance by the SEC, the agency accused Binance of ‘commingling’ billions of dollars in customer money with Binance’s own funds, similar to allegations made against the now bankrupt and disgraced crypto exchange FTX. The founder of FTX, Sam Bankman-Fried was convicted of fraud and now awaits sentencing.
EC Chair, Gary Gensler reportedly said, ‘Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law’.
Binance origin
Started by the Chinese-born entrepreneur in 2017, Binance went from being a relatively obscure name to being a major force in crypto in a matter of weeks. Binance remains the world’s largest crypto exchange globally, processing billions of dollars in trades every year.
While its holding company is based in the Cayman Islands, Binance doesn’t have a global headquarters and Zhao frequently resisted calls to create one, saying he wanted the platform to run on a ‘decentralized’ operating model.
UK ban
In 2021, the U.K.’s Financial Conduct Authority (FCA) barred Binance’s U.K. unit from operating in the country, saying it wasn’t authorized to carry out regulated activities. More recently, Binance scrapped plans to pursue a full U.K. license after the regulator said its ‘know-your-customer and anti-money-laundering’ controls didn’t meet its requirements.
Binance and Zhao filed a motion in July 2023 to dismiss the CFTC’s suit. The U.S. arm of the exchange is also pushing back on the SEC’s lawsuit, filing a protective order against what they call the SEC’s ‘fishing expedition’.
Crypto industry concern
Of particular concern for the crypto industry are the implications of the crypto crackdown for a myriad of altcoins or tokens and blockchains, not just the exchanges.
The SEC maintains that several of the tokens Binance and Coinbase offer on their platforms such as: Solana’s SOL, Cardano’s ADA , and Polygon’s MATIC are all securities that should have been registered.
