FTX founder and former CEO Sam Bankman-Fried was arrested by Bahamian authorities on Monday evening in the Bahamas and is expected to be extradited to the U.S. The U.S. Attorney’s Office for the Southern District of New York shared a sealed indictment with the Bahamian government leading to Bankman-Fried’s arrest. More: - The Justice Department unsealed the indictment on Tuesday.
- Bankman-Fried is charged with eight counts, including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, money laundering, and violations of campaign finance laws.
- Bankman-Fried is accused of misappropriating customer deposits to pay debts and expenses of his private trading firm Alameda Research and to make other investments.
- U.S. Attorney for the Southern District of New York Damian Williams called it one of the largest financial frauds in U.S. history.
- Bankman-Fried was denied bail in the Bahamas on Tuesday over flight risk.
- U.S. prosecutors signaled that they could pursue other individuals involved in the exchange’s collapse.
In related news: - The U.S. SEC also filed civil charges against Bankman-Fried, accusing the former CEO of orchestrating a fraud that began the day FTX was launched and continued at his personal direction until November.
- The SEC said FTX used customer deposits to make undisclosed venture investments, luxury real estate purchases, and large political donations.
- FTX unexpectedly filed for Chapter 11 bankruptcy on Nov. 11 following a liquidity crunch. Bankman-Fried stepped down as CEO.
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U.S. lawmakers unveiled a bipartisan bill on Tuesday that aims to ban TikTok in the U.S. TikTok is owned by Chinese company ByteDance. As the app’s popularity has risen, there have been broad concerns in the U.S. about the Chinese government gaining access to U.S. users’ data through the platform. More: - TikTok has insisted that U.S. user data is stored outside of China.
- The company has been in talks with the Committee on Foreign Investment in the U.S. over data concerns.
- Last week, The Wall Street Journal reported these talks had been halted over national security concerns.
- Last month, FBI Director Christopher Wray testified before Congress, saying he was extremely concerned about the Chinese government’s potential influence on U.S. users through TikTok.
- The bill, dubbed the ANTI-SOCIAL CCP ACT, was introduced by Sen. Marco Rubio, R-Fla., and Reps. Mike Gallagher, R-Wisc., and Raja Krishnamoorthi, D-Ill.
- On news of the new bill, Meta and Snap shares rose more than 6% and 3%, respectively.
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FTX's new CEO, John J. Ray III, testified before the House Committee on Financial Services on Tuesday, making his first public comments on the crypto exchange's collapse since taking over the role in November. Ray oversaw the liquidation of Enron following the energy company's bankruptcy filing in late 2001. More: - Ray said FTX released more than $100M to roughly 1,500 customers in the Bahamas a day before the company's U.S. Chapter 11 filing.
- Ray added that FTX's former CEO, Sam Bankman-Fried, was aware the company was preparing to file for bankruptcy.
- Ray said FTX creditors should anticipate some massive losses, as the crypto exchange would not be able to recover all the lost funds.
- Current estimates put FTX's uncounted funds at around $8B.
- Ray said the company has been working on uncovering FTX's assets, and it could take months or more for these to be found and unlocked.
- Ray said the scheme at FTX and its sister company Alameda was unsophisticated, referring to what occurred as "just plain old embezzlement."
- Bankman-Fried was scheduled to testify before the House Committee on Wednesday but has backed out of the hearing. He was arrested late Monday in the Bahamas.
- Bankman-Fried's attorneys added that the FTX founder would not accept service of a subpoena to force his testimony before the Committee.
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U.S. inflation rose 7.1% in November compared to last year, its slowest growth since December 2021, but still way above the Fed’s 2% target. Consumer prices rose 7.7% in October compared to last year. Core CPI, which excludes food and energy, rose 6% in November compared to the previous year and down from 6.3% reported in October. More: - Month to month, inflation rose 0.1% in November, compared to 0.4% in October.
- Core CPI rose 0.2% in November from October, down from 0.3% reported in October.
- As inflation appears to ease, analysts expect the Fed to announce a 0.50% interest rate hike at their meeting on Wednesday.
- The central bank has had four consecutive 0.75% rate hikes at its previous meetings.
- Following the release of inflation data, U.S. stocks rose:
- The Dow gained 103.60 points, or 0.3%, to 34,108.64.
- The S&P 500 rose 0.73% to 4,019.65, and the Nasdaq rose 1.01% to 11,256.81.
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Twitter re-launched its Twitter Blue subscription service on Monday, weeks after it suspended the feature. Twitter said subscribers to Twitter Blue would get access to features such as the ability to edit tweets and the company’s blue verification check mark. More: - With the re-launch, Blue subscribers would need their accounts reviewed to get verified and receive the blue check mark.
- Accounts must also be at least 90 days old and have a confirmed phone number to subscribe to Twitter Blue.
- Twitter owner Elon Musk said users with the basic subscription would see 50% fewer ads than non-subscribers.
- Twitter plans to launch a Twitter Blue tier with no ads next year.
- Users who subscribe through the web would pay $8 a month for the service; mobile subscribers would pay $11 a month.
- Musk had previously referred to the 30% fee App Store operators like Apple charge developers as a tax.
In related news: - Elon Musk has disbanded Twitter’s Trust and Safety Council.
- The council was set up in 2016.
- The council was comprised of civil society groups and advised Twitter on how to enforce its policies around content like hate speech.
- In an email sent to council members, Twitter said it was re-evaluating how best to bring external insights into its product and policy development work.
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According to sources, China is working on a support package for its semiconductor industry worth more than 1T yuan ($143B). The move comes weeks after the U.S. announced export restrictions on advanced chipmaking equipment to China. On Monday, Bloomberg reported that Japan and the Netherlands have agreed in principle to join the U.S. in these measures. More: - China’s chip support package aims to help the country become self-sufficient and counter export measures taken by the U.S. and others.
- The incentives would be rolled out over five years and come in subsidies and tax credits.
- According to sources, the package could start rolling out as soon as Q1 2023.
- Most of the financial support would go toward subsidizing the costs China firms would incur from buying domestic semiconductor production equipment, primarily semiconductor fabrication plants.
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- Twitter founder Jack Dorsey wrote a blog post admitting mistakes during his time in charge and saying the company still has problems.
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 |  | Vanessa Omeokachie is a writer for Inside.com; she writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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