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Factbox: From Binance to Voyager, crypto firms' exposure to FTX is coming to light – Reuters

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LONDON, Nov 14 (Reuters) – After major crypto exchange FTX filed for U.S. bankruptcy protection on Friday, the crypto industry is bracing for further fallout.

Some of FTX’s investors have said they are writing their investment down to zero.

Other crypto firms may be exposed to FTX by having held tokens on the exchange or by owning FTX’s native token, FTT, which plunged around 94% last week .

While the extent of the contagion across crypto markets remains unclear, here are some firms who have given information about their exposure to FTX.

BINANCE

Binance Chief Executive Changpeng Zhao sparked concerns among investors on Nov. 6 when he said in a tweet that Binance would sell its holdings of FTT.

Zhao told a Twitter spaces event on Monday that Binance had previously held $580 million worth of FTT, of which “we only sold quite a small portion, we still hold a large bag”.

BLOCKFI

Embattled cryptocurrency lender BlockFi said it had significant exposure to FTX and that withdrawals from its platform continue to be paused.

“We do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” BlockFi said.

In July, FTX had signed a deal with the troubled crypto lender to provide it with a $400 million revolving credit facility with an option to buy it for up to $240 million.

CELSIUS NETWORK

Bankrupt crypto lender Celsius Network said in a tweet on Nov. 11 that it had 3.5 million Serum tokens (SRM) on FTX as well as around $13 million in loans to FTX-linked trading company Alameda Research. The loans were under-collateralised, mostly by FTT tokens, Celsius said.

COINBASE

Coinbase Global Inc (COIN.O) said in a blog post on Nov. 8 that it had $15 million worth of deposits on FTX. It said it had no exposure to FTT, no exposure to Alameda Research, and no loans to FTX.

It said it had $5 billion in cash and cash equivalents at the end of Q3.

COINSHARES

Crypto asset manager CoinShares has $30.3 million worth of exposure to crypto exchange FTX, CoinShares said in a statement on Nov. 10.

CoinShares CEO Jean-Marie Mognetti said that the group’s financial health remains “strong”, adding that its net asset value at the end of Q3 was 240.6 million pounds ($282.51 million).

CRYPTO.COM

Singapore-based crypto exchange Crypto.com said on Nov. 14 it had moved about $1 billion to FTX over the course of a year, but most of it was recovered and exposure at the time of FTX’s collapse was less than $10 million.

CEO Kris Marszalek said the firm would prove all naysayers wrong on the platform being in trouble, and that it has a robust balance sheet and took no risks.

GALAXY DIGITAL

Crypto financial services company Galaxy Digital Holdings Ltd (GLXY.TO) said in its third-quarter earnings statement on Nov. 9 – the day after FTX froze withdrawals – that it had a $76.8 million worth of exposure to FTX, of which $47.5 million was “in the withdrawal process”.

In the earnings call, Novogratz said Galaxy had more than $1 billion in cash and $1.5 billion in liquidity.

GALOIS CAPITAL

Hedge fund Galois Capital had half its assets trapped on FTX, co-founder Kevin Zhou told investors in a recent letter, the Financial Times reported, estimating the amount to be around $100 million.

Galois did not respond to Reuters comment requests sent via email and its website.

GENESIS

U.S. cryptocurrency broker Genesis Trading’s derivatives business has approximately $175 million in locked funds on FTX, the company said in a tweet on Nov. 10.

“Genesis has no material exposure to FTT or any other tokens issued by centralized exchanges,” the firm said in a tweet on Nov. 9.

KRAKEN

Cryptocurrency exchange Kraken said on Nov. 10 that it held about 9,000 FTT tokens on the FTX exchange and was not affected “in any material way”.

Kraken also said on Sunday it had frozen the accounts of FTX, Alameda Research and their executives.

SILVERGATE CAPITAL CORP

Silvergate Capital Corporation (SI.N) said on Friday FTX represented less than 10% of $11.9 billion deposits from all digital asset customers as of Sept. 30.

The financial solutions provider to digital assets also said Silvergate has no outstanding loans or investments in FTX, and FTX is not a custodian for Silvergate’s bitcoin-collateralized Silvergate Exchange Network (SEN) leverage loans.

VOYAGER DIGITAL

FTX won crypto lender Voyager Digital’s assets in a $1.42-billion bid at an auction in September months after the lender spurned an earlier proposal and called it a “low-ball bid dressed up as a white knight rescue”.

Voyager said on Nov. 11 it had reopened the bidding process for the company and maintained a balance of approximately $3 million at FTX when the embattled crypto exchange filed for protection from creditors.

($1 = 0.8516 pounds)

Reporting by Elizabeth Howcroft in London and Mehnaz Yasmin and Medha Singh in Bengaluru; Editing by Jan Harvey and Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

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Nike sues Lululemon for infringement of footwear patents – CBC.ca

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Nike Inc. sued Lululemon Athletica Inc. on Monday, saying that at least four of the Canadian athletic apparel company’s footwear products infringe its patents.

In a complaint filed in the U.S. federal court in Manhattan, New York, Nike said it has suffered economic harm and irreparable injury from Lululemon’s sale of its Blissfeel, Chargefeel Low, Chargefeel Mid and Strongfeel footwear.

Nike, based in Beaverton, Ore., said the three patents at issue concern textile and other elements, including one addressing how the footwear will perform when force is applied.

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Nike is seeking unspecified damages. 

Lululemon, based in Vancouver, did not immediately respond to requests for comment.

This wasn’t the first time Nike has sued Lululemon for patent infringement — on Jan. 5, 2022, it accused the athleisure brand of making and selling the Mirror Home Gym and related mobile apps without authorization.

Nike accused its smaller rival of infringing six patents, including technology that enables users to target specific levels of exertion, compete with other users and record their own performance.

Nike has sought triple damages for Lululemon’s alleged willful infringement and a variety of other remedies regarding the Mirror Home Gym and related mobile apps.

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Stock market news live updates: Stocks sell off to start blockbuster week – Yahoo Canada Finance

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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 S&P 500 (^GSPC) was down 1.3%, while the Dow Jones Industrial Average (^DJI) lost nearly 0.8%. The technology-heavy Nasdaq Composite (^IXIC) declined by roughly 2%.

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.

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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.

Chair of the Board of Governors of the Federal Reserve System Jerome H. Powell participates in a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023. TT News Agency/Claudio Bresciani/via REUTERS      ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALES IN SWEDEN.
Chair of the Board of Governors of the Federal Reserve System Jerome H. Powell participates in a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023. TT News Agency/Claudio Bresciani/via REUTERS      ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALES IN SWEDEN.


Chair of the Board of Governors of the Federal Reserve System Jerome H. Powell participates in a panel during a Central Bank Symposium at the Grand Hotel in Stockholm, Sweden, January 10, 2023. TT News Agency/Claudio Bresciani/via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALES IN SWEDEN.

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.

The heavy earnings slate includes reports from tech heavyweights Amazon (AMZN), Apple (AAPL), Alphabet (GOOG), and Meta Platforms (META).

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.

Shares of Johnson & Johnson (JNJ) fell nearly 4% Monday after an appeals court said the company can’t use bankruptcy to end cancer lawsuits.

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

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J&J Can’t Use Bankruptcy to End Cancer Suits Over Baby Powder, Court Says – Yahoo Finance

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(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.

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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.

Texas Two-Step

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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