|
|
|
|
|
Mashinsky Before Celsius; Voyager to Release Fund; Alex Jones Hit With Massive Penalty
|
|
|
|
|
|
Good day and welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, August 8. Before Alex Mashinsky led crypto lender Celsius Network to its crash, he was known for big ideas and battles that often left a trail of unhappy friends, colleagues and investors; Voyager Digital said its customers are expected to be able to withdraw cash through their apps start Thursday from a fund held at the Metropolitan Commercial Bank; And conspiracy theorist Alex Jones on Friday was ordered to pay $45.2 million in punitive damages to Sandy Hook parents of a 6-year-old boy, on top of the $4.1 million awarded the day before for actual damages to the same parents.
|
|
|
|
|
Alex Mashinsky at the Blockchain Week Summit in Paris this spring.
PHOTO: BENJAMIN GIRETTE/BLOOMBERG NEWS
|
|
|
|
Before crypto lender Celsius crashed, CEO Alex Mashinsky was known for big ideas and battles. For some 30 years, Alex Mashinsky barreled into whatever was the hot technology of the time, promising revolutions in long-distance calling, airport rides and, most recently, crypto. He often left a trail of unhappy friends, colleagues and investors.
His latest venture, Celsius Network LLC, pitched itself as both safe and subversive. It was a way for regular people to tap the moneymaking potential of crypto, and to upend traditional banking. Last month, Celsius filed for bankruptcy protection, and its customers worry they might never get their money back.
Public records and interviews with people who know Mr. Mashinsky paint a picture of a brash, confident serial entrepreneur with a constant stream of big ideas. Some of his companies have been more successful than others, but they often had a common thread: Mr. Mashinsky frequently left them under tense circumstances.
|
|
|
|
Crypto brokerage Voyager Digital sought bankruptcy protection last month after customers flooded it with withdrawal requests.
PHOTO: GABBY JONES/BLOOMBERG NEWS
|
|
|
|
|
Voyager secured approval to return $270 million in customer cash, which accounts for a small portion of investor assets that have been locked up since its bankruptcy filing last month.
Judge Michael Wiles of the U.S. Bankruptcy Court in New York, who is overseeing Voyager’s bankruptcy, ruled on Thursday that the company provided “sufficient basis” to support its contention that customers should be allowed access to the custodial account held at New York-based Metropolitan Commercial Bank.
|
|
|
|
|
|
|
Alex Jones, outside the courthouse in Austin this week, said under oath that he now believes the shooting was ‘100% real.’
PHOTO: BRIANA SANCHEZ/AMERICAN-STATESMA/ZUMA PRESS
|
|
|
|
Alex Jones ordered to pay punitive damages to Sandy Hook parents. Alex Jones was ordered by a jury to pay $45.2 million in punitive damages to the parents of a 6-year-old boy killed in the Sandy Hook school shooting, a judgment that recognizes that the popular conspiracy theorist went far beyond accepted norms in repeatedly calling the tragedy a hoax.
The verdict follows a separate $4.1 million award granted by the same jury on Thursday for actual damages, or the harm suffered directly by the parents of the murdered child. The trial in Mr. Jones’s hometown is the first of several seeking damages for statements made after the shooting.
Infowars’ parent, Free Speech Systems LLC, filed for bankruptcy protection last week—the second time the platform has attempted to enter chapter 11 in recent months. Lawyers for Sandy Hook families have accused Mr. Jones of diverting money to protect the business from potential judgments, an accusation Mr. Jones’s lawyer denies.
|
|
|
Disclosure of text messages adds to legal woes for Alex Jones. Last week’s nearly $50 million damages verdict against far-right radio host Alex Jones for defamation came after an unexpected twist in court proceedings that revealed his lawyers mistakenly turned over his personal text messages and other phone records to the opposing legal team.
The material could prove damaging for Mr. Jones as he faces additional defamation cases focused on his on-air spreading of falsehoods that the 2012 Sandy Hook Elementary School massacre was a hoax. It also could open him up to further scrutiny from lawmakers and law-enforcement officials investigating his actions surrounding the Jan. 6, 2021, insurrection at the U.S. Capitol.
Here’s a look at the disclosures and their potential repercussions.
|
|
|
|
|
|
Roots Party candidate George Wajackoyah campaigning ahead of the election. JAMES WAKIBIA/ZUMA PRESS
|
|
|
|
Underdog bets legal marijuana will be his ticket to Kenya’s presidency. If George Wajackoyah is elected president of Kenya next week—and that is a huge if—he’ll order gardeners to pull up the flowers gracing Nairobi’s brand-new, 17-mile-long, Chinese-built elevated expressway.
And replace them with marijuana.
Also on his to-do list: Close the Chinese-built railway connecting the capital with the Indian Ocean port of Mombasa, pay off Kenya’s outstanding debts to China with bags of marijuana and install a Kenyan-built railroad.
His campaign manifesto promises to “deport foreign idlers who have taken over Kenyan jobs,”—a group, he identifies as Chinese workers brought in to build Chinese-funded infrastructure projects. Beijing has dotted Africa with ports, airports, roads and bridges, a campaign that has often left countries deeply in debt to Chinese state-owned companies.
|
|
|
“In Kenya we’re being overrun by the Chinese."
|
— George Wajackoyah
|
|
|
|
|
|
|
|
Fed Chairman Jerome Powell said recently that the U.S. economic outlook remained unusually uncertain.
PHOTO: JIM LO SCALZO/SHUTTERSTOCK
|
|
|
|
Jobs report keeps Fed on aggressive tightening path. The July jobs report defied expectations of an economic slowdown and will make it harder for the Federal Reserve to dial back the pace of rate increases at its meeting next month.
The Fed is trying to slow economic activity and hiring to bring down inflation that is running at 40-year highs. Friday’s job report shows the economy is still firing on many cylinders, making it more likely central bank officials conclude they need to raise rates to higher levels and to keep rates at those levels for longer to cool the economy.
The Fed raised rates by 0.75 percentage point at its meeting last week, following a similar increase in June, which was the largest since 1994. “Another unusually large increase could be appropriate at our next meeting,” but the decision “will depend on the data we get between now and then,” Fed Chairman Jerome Powell said at a July 27 news conference.
|
|
|
|
Snapshot of jobs market as it reaches pandemic recovery milestone. With the 528,000 added jobs last month, the U.S. economy gained back all the jobs lost early in the pandemic, the Labor Department said on Friday. The unemployment rate also fell to its prepandemic half-century low of 3.5%.
Different industries and demographic groups have fared differently as the U.S. labor-market recovery reaches a historic moment.
A shift to e-commerce has helped drive up employment in transportation and warehousing during the pandemic. The sector was still churning out jobs last month, adding about 21,000 workers. Warehouse employment was up by 36% in July 2022 compared with February 2020 just ahead of the pandemic. Couriers and messenger companies, which deliver packages to homes, also logged double-digit payroll growth over this period.
Manufacturing employment is now slightly above prepandemic levels. Employment at semiconductor manufacturers increased 0.9% in July from a month earlier and is also above February 2020 levels, which should help ease chips shortages that have roiled supply chains and auto production.
|
|
|
|
Fed governor Michelle Bowman said inflation and hiring data would guide her decision on the central bank’s next rate hike in September.
PHOTO: ZACH GIBSON/BLOOMBERG NEWS
|
|
|
|
|
Fed’s 0.75-percentage-point rate increase last month and “similarly-sized increases should be on the table until we see inflation declining in a consistent, meaningful and lasting way.” In remarks prepared for delivery Saturday to the Kansas Bankers Association, Ms. Bowman said that two months of data on inflation and another month of hiring data would guide her ultimate decision on how high to raise rates at the Fed’s Sept. 20-21 meeting.
|
|
|
“Our primary challenge is to get inflation under control."
|
— Fed governor Michelle Bowman
|
|
|
|
|
|
|
Bitcoin has already bottomed, has a fair value of $40,000, says Anthony Scaramucci. (MarketWatch)
China junk bond arranger predicts more chapter 15 bankruptcies. (Bloomberg)
|
|
|
|
|
|