Collapsed crypto exchange FTX said on Saturday it was moving funds into offline storage following a series of “unauthorized transactions,” with analysts saying millions of dollars worth of assets had been withdrawn from the platform.
FTX U.S. general counsel Ryne Miller said in a tweet on Saturday that the exchange was expediting the process of shifting all digital assets into cold storage “to mitigate damage upon observing unauthorized transactions.”
Cold storage refers to crypto wallets that are not connected to the internet to guard against hackers.
Late on Friday, Miller tweeted that he was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges.”
Hundreds of millions
Figures from Singapore-based analytics firm Nansen showed a one-day net outflow from FTX of about $266 million US, with $73 million US withdrawn from FTX U.S. alone.
FTX did not respond to a Reuters request for comment.
Prior to Miller’s tweets, FTX officials appeared to confirm rumours of a hack on the firm’s Telegram channel, according to a CoinDesk report that said that the exchange had instructed customers to delete FTX apps and avoid its website.
“FTX has been hacked,” an account administrator in the FTX Support Telegram channel wrote in a message, according to CoinDesk.
Reuters could not immediately verify the details posted on FTX’s private Telegram channel.
FTX, affiliated crypto trading firm Alameda Research and about 130 of its other companies have filed for bankruptcy court protection from creditors in Delaware, FTX said on Friday.
The distressed crypto trading platform had struggled to raise billions as traders withdrew $6 billion US in crypto tokens from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal this week.
Stock market news live updates: Stocks sell off to start blockbuster week – Yahoo Canada Finance
U.S. stocks tumbled Monday as investors await a blockbuster week that includes the latest Fed meeting, a flurry of heavyweight earnings reports, and jobs data.
The yield on the benchmark 10-year U.S. Treasury note ticked up to 3.546% on Monday morning. The dollar index ticked up 0.32% to $102.26.
Stocks closed a winning week Friday following data that pointed to stronger-than-expected U.S. economic growth. All the major market averages finished higher for the week, with the S&P 500 gaining 2.5%, the Dow Jones Industrial average ending up 1.8% and the Nasdaq climbing north of 4%.
The Commerce Department said Friday the personal consumption expenditures price index, excluding energy and food, showed prices rose 4.4% from a year earlier. Friday’s report came in a day after the government reported a better-than-expected 2.9% gain in gross domestic product for the fourth quarter, boosting hopes that the Federal Reserve may head toward the elusive “soft landing” scenario.
Fed officials will be meeting in Washington, D.C., Tuesday and Wednesday. The meeting will wrap up with Fed Chair Jerome Powell holding a press conference Wednesday afternoon as he offers signs of the central bank’s path forward on rate hikes.
“The FOMC’s work is not yet done, even if the recent declines in inflation and wage growth give it more time to assess the effects of past policy actions. A key challenge for the FOMC will be to execute its transition to smaller rate hikes without furthering expectations that an end to its hiking cycle is imminent,” the team at Barclays wrote.
At the end of week, investors will get another clue of the Fed’s path as the government’s January jobs report is set to be released Friday morning. Economists surveyed by Bloomberg expect 185,000 jobs were added to the economy last month, a slowdown from the gain of 223,000 jobs in December.
Meanwhile, it’s the biggest week of the fourth-quarter earnings season, with Big Tech results taking the spotlight amid thousands of layoffs in the industry. Despite the already announced job cuts, the tech companies’ are in part to blame for the disaster, Yahoo Finance’s Dan Howley writes.
Elsewhere in markets, shares of Lucid (LCID) sank nearly 9%. On Friday, the electric-vehicle maker surged more than 88% following speculation that a Saudi Arabia Public Investment Fund (PIF) is considering buying its remaining stake in the company.
Alibaba (BABA) shares fell 6% Monday after reports that the Chinese e-commerce site is moving its headquarters out of the country, suggesting the new campus could be in Singapore, according to reports.
SoFi Technologies (SOFI) shares rose 12.5% Monday after the digital financial services company posted an upbeat earnings guidance for the year ahead.
In the cryptocurrency market, Bitcoin (BTC-USD) has fallen over 1% to $23,168 over the last 24 hours, according to CoinMarketCap. However, the largest token is on its way for its best January since 2013, per Bloomberg, on bets that monetary tightening and the sector’s crisis are both receding.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
J&J Can’t Use Bankruptcy to End Cancer Suits Over Baby Powder, Court Says – Yahoo Finance
(Bloomberg) — Johnson & Johnson can’t use bankruptcy to resolve more than 40,000 US cancer lawsuits over its now-withdrawn baby powder, a federal appeals court ruled.
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The three-judge panel in Philadelphia sided with cancer victims, who argued J&J wrongly put its specially created unit, LTL Management, under court protection to block juries around the country from hearing the lawsuits and handing out damage awards.
The ruling means J&J will most likely need to defend itself against claims that tainted talc in its baby powder causes cancer. The company has lost a number of such cases — including one that was appealed all the way to the US Supreme Court, before J&J was forced to pay more than $2 billion to one group of victims.
Shares of J&J dropped as much as 7.2% in New York on Monday before closing down 3.7%. J&J removed its iconic talc-based baby powder from the US market in 2020 and is slated to have it off markets across the globe by the end of this year.
The judges found only companies directly threatened with financial troubles can use bankruptcy. Since J&J itself never claimed to be in immediate danger, it can’t benefit from Chapter 11 of the bankruptcy code by putting a unit under court protection, the judges found.
“Good intentions — such as to protect the J&J brand or comprehensively resolve litigation — do not suffice alone,” to file for bankruptcy, Judge Thomas Ambro wrote. “What counts to access the Bankruptcy Code’s safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not. Thus we dismiss its petition.”
The ruling may drive a settlement, according to Holly Froum, a litigation analyst for Bloomberg Intelligence. A settlement of the more-than 40,000 suits could total $5 billion, according to Froum, who in a note Monday pegged the chances of a deal at 70%.
J&J plans to challenge the ruling. The bankruptcy was filed in good faith to “equitably resolve” talc claims, it said in a statement. If the company’s appeals aren’t successful, plaintiffs’ lawyers predicted Monday J&J could face a wave of talc trials starting this summer.
J&J can now ask that all judges on the Philadelphia appeals court hear their appeal of the three-judge panel’s decision. If that’s denied, the company has the right to ask the US Supreme Court to hear its arguments that the Chapter 11 case should be allowed to proceed.
“The doors to the courthouse, which had been slammed shut by J&J’s cynical legal strategy, are once again open,” said Leigh O’Dell, a lawyer representing thousands of talc users whose claims have been consolidated in New Jersey for pre-trial information exchanges. Plaintiff lawyers will be scrambling to get talc suits back on trial dockets across the US in the wake of the appeals court’s ruling, O’Dell said.
A J&J lawyer Monday indicated the company was preparing for more talc litigation in a trial against consumer-products maker Colgate-Palmolive Co. Allison Brown, one of Colgate’s attorneys who has represented J&J in past talc cases, asked a California judge to put on hold Francis Coit’s case against multiple defendants over injuries allegedly tied to talc-based powders.
“Given plaintiff’s allegations in the complaint about Johnson’s Baby Powder, and that if they are permitted to do so, they will seek to bring J&J into the complaint, Colgate would request a continuance, Your Honor, to see what happens with the J&J bankruptcy and if J&J truly will need to come into this case to defend itself against the allegations” against its baby powder, Brown told Judge Richard Sebolt, according to a copy of a court transcript.
The bankruptcy case had put all talc litigation on hold while the appellate court decided whether the so-called Texas-Two Step technique J&J relied on for its talc bankruptcy was flawed.
After several talc litigation losses, J&J turned to the maneuver, which is designed to block the cases from trial and force claimants to negotiate in the Chapter 11 case of LTL.
In 2021, the health-care giant sought to funnel the suits into what it acknowledged was a “shell company” without any operations. That unit, LTL, immediately filed for bankruptcy to block the litigation while trying to negotiate settlements.
J&J has long argued that there is no good scientific evidence linking its baby powder to cancer. The company argued LTL’s case was the only way of managing talc litigation costs and ensuring victims get a fair payment.
US Bankruptcy Judge Michael Kaplan, who is based in Trenton, New Jersey — not far from J&J’s headquarters in New Brunswick — ruled last year that LTL’s bankruptcy was legitimate and a better solution than continuing to have juries weigh claims nationwide. Cancer claimants appealed Kaplan’s decision.
A handful of companies, including Koch Industries’ Georgia-Pacific unit, used the strategy before J&J. Those cases remain in bankruptcy court in North Carolina. The Philadelphia court’s decision will not have any direct impact on the North Carolina cases.
Last year, a bankruptcy judge in Indianapolis refused to halt about 230,000 lawsuits against 3M Co. even though its subsidiary, Aearo Technologies, had filed a legitimate Chapter 11 case. 3M has appealed that decision.
LTL’s bankruptcy was the first Texas Two-Step to reach an appeals court. After victim groups challenged Kaplan’s ruling, the appeals court in Philadelphia agreed to expedite the case.
J&J’s strategy has been condemned by some legal scholars and members of Congress because the company received a major benefit of Chapter 11 rules — a halt to lawsuits — without filing for bankruptcy, where it would be subject to court oversight of its spending and other practices.
The handful of the companies that have used the strategy since it emerged in 2017 have faced suits targeting their use of asbestos, a toxic industrial material. The cases take advantage of special rules set up by Congress for companies threatened with insolvency by such litigation.
There have been ongoing talks aimed at settling the talc cases filed in both state and federal courts. Prior to J&J putting its unit into bankruptcy in 2021, the company offered to resolve the suits as much as $5 billion, according to Monday’s decision.
In Chapter 11 filings, J&J’s lawyers acknowledged the LTL subsidiary had a value of more than $61 billion and those funds could be tapped to satisfy talc liabilities, if necessary. Analysts, however, aren’t predicting the company will pay out anything near that figure to settle the cases.
The J&J bankruptcy case is LTL Management LLC, 21-30589, U.S. Bankruptcy Court, District of New Jersey (Trenton).
(Updates with $5 billion settlement offer in 24th paragraph)
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Title fraud a one-in-a-million threat in B.C., officials say
Homeowners in B.C. should rest easy: the chance they will ever have their homes stolen out from under them is literally one in a million.
While there have been a flurry of media reports in recent weeks about title fraud in Greater Toronto, there is no indication homeowners in B.C. are vulnerable to having their homes fraudulently sold by someone else, according to real estate professionals.
“It’s such an exaggerated possibility,” said Mike Holmes, a lawyer and owner of Pemberton Holmes Real Estate.
Holmes said given the safeguards in place in this province — what he called a world-class land-title registry system and a number of gatekeepers keeping watch — it would take an incredible set of circumstances to pull it off.
“It was tried in Victoria last year,” he said. “It was stopped by the various gatekeepers that protect the system — the realtors, the banks, the lawyers and the land-title system.”
The numbers back him up. According to the the province’s Land Title and Survey Authority, in the past three years there have been three reported attempts at title fraud. Two are now before the courts, and the third was thwarted by identification safeguards.
The authority typically sees more than 800,000 real estate transactions in a year, but last year it dealt with over one million.
“I don’t want to say it’s a one-in-a-million thing, because there may be frauds out there that we’re not aware of, but we certainly haven’t seen a huge proliferation in fraud claims,” said Carlos MacDonald, director of land titles for the Land Title and Survey Authority.
In most instances of title fraud, the scam artists look for homes that are vacant or have absentee owners and have clear title, which means no mortgage or charges against the title. The fraudsters, who will often rent the property, may impersonate the owners using false identification, quickly list the property for sale and take an early, reasonable offer.
Holmes said in the Victoria case, real estate agents and lawyers thwarted the attempt when they went to verify the identification.
The fraudster “may have gotten to the first base of 20, [but] it was never going anywhere,” he said.
“We have an extremely good land-title system in British Columbia, and by and large the lawyers and notaries operating here are well trained in identifying people and to look for suspicious activity and to report it,” added Kate Roome, a Duncan-based notary public.
Roome said fraudsters tend to avoid properties that have any kind of charge against them, such as a line of credit or mortgage.
“When there is a lender on title already, it makes committing that fraud just that much more complicated,” she said.
When a fraud does happen, MacDonald said, it’s typically because there have been a series of mistakes. He notes one of the cases currently before the courts alleges some of the real estate professionals did not live up to the required standard of care.
Property owners being around and involved also tends to put off the scam artists, he said.
“Absentee owners are more vulnerable to all sorts of things. If you’re a landlord and you’re checking on your place on a regular basis, you’re less likely to end up with a marijuana grow-op in your house and you’re probably less likely to end up with this type of issue,” he said.
For homeowners concerned about title fraud, there are several things they can do — including buying title insurance, which will help recover legal fees if they do experience a fraud.
MacDonald said there are two assurance funds, one run by the province and the other by the Land Title and Survey Authority.
“If an innocent homeowner loses their home or loses an interest in their title as a result of either fraud or a mistake of the registrar or his staff, the assurance fund is there to compensate the victim,” he said.
The LTSA also offers Parcel Activity Notifier subscriptions, which provide alerts if any application is submitted against a title.
“It’s a very effective way of preventing land-title fraud,” he said.
Holmes said another old-school method is also effective — the duplicate certificate of title.
“It’s hardly ever used today, but still is available where a person takes a duplicate certificate of title and lodges it with a lawyer or a bank,” he said. “Every title has a duplicate that is normally just lodged with the land-title system, but an owner can apply to take out that duplicate certificate of title. The title cannot be touched until that duplicate certificate title is put back into the land-title system.”
The downside is that reinstating a lost duplicate is not a straightforward process.
Mortgage broker Scott Travelbea advises clients with clear titles to take out a secured line of credit on their homes.
“Once it’s set up, if they ever want to borrow funds, they’ve got access to them and they generally pay nothing for it,” he said. “And it creates that layer of security because to discharge the mortgage, the lawyer has to remove it from the title of the home.”
MacDonald said since the recent media reports, the LTSA has been fielding a lot of of calls about people concerned about fraud.
“For them it’s absolutely scary, but it is uncommon,” he said.
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