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The Morning Risk Report: Crypto Market Turmoil Highlights Personal Risks for Compliance Chiefs
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Good morning. The recent crash in the price of some cryptocurrencies, along with a series of hacks and bankruptcies as well as potential new regulatory regimes, underscores the importance of compliance programs in helping protect crypto firms from running afoul of the law, reports Risk & Compliance Journal's Mengqi Sun.
But the increased pressure and attention placed on the industry has stoked the anxiety of individual crypto compliance officers and other legal professionals, who see regulators more willing to hold them personally accountable for the problems at their firms, according to industry experts.
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The Road Taken: Medtronic’s CLO on Creating Career Opportunities
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Regulators can potentially charge compliance chiefs working in all sectors, including traditional finance, for conduct relating to their job-related duties. However, for those individuals working in the nascent crypto sector, where the rules are still evolving, the personal liability risks can be higher. Legal and compliance professionals at crypto firms are often asked to turn on a dime to make judgment calls and might not have the staff and resources that are available to a larger financial services business.
“There is more risk because there is no clear rulebook,” Jeff Horowitz, chief compliance officer at Palo Alto, Calif.-based crypto custodian BitGo Inc., said. Read more.
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WSJ Risk & Compliance Forum
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Sign up for the next WSJ Risk & Compliance Forum on Nov. 16 for discussions on the critical issues facing corporate risk & compliance professionals, including keeping up with sanctions, screening for forced labor, and proposed U.S. rules on climate change and cybersecurity. Register here for a discounted ticket.
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A worker at a hydroelectric power plant operated by RusHydro, which Russian leader Putin has deemed a strategic business. PHOTO: VLADIMIR SMIRNOV/ZUMA PRESS
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Russia has barred investors from nations it deems unfriendly from selling shares in certain strategic enterprises through the end of the year, a move that further strains relations between Moscow and countries that have leveled sanctions against Russia for its war in Ukraine.
The ban went into immediate effect following a decree signed by Russian President Vladimir Putin Friday and is part of a range of other special measures being enacted in the sphere of finance and fuel and energy, Russia’s state news agency, TASS, reported.
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Ericsson is being sued by hundreds of Americans who say the company’s alleged payment of bribes to al Qaeda and Islamic State—protection money meant to let it operate in Iraq—also helped fund acts of terror.
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The Stockholm-based telecommunications company, which was sued Friday in federal court in Washington, D.C., faces claims from more than 500 U.S. service members and civilians who were victims of terrorist attacks and hostage takings from 2005 to 2021, along with the families of those killed in attacks.
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Indiana-based companies Eli Lilly & Co. and Cummins Inc. spoke against the state’s new abortion law, saying the restrictions could hurt the companies’ ability to keep and attract employees and could affect where the businesses grow.
The Saturday statements came after Indiana’s governor on Friday signed a near-total ban on abortions shortly after lawmakers approved it. The ban takes effect Sept. 15 and includes exceptions.
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Chinese state media said this photo showed a missile being launched during the drills. PHOTO: WANG YI/XINHUA/ZUMA PRESS
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Four days of exercises around Taiwan offered a rare glimpse into China’s progress toward its goal of prevailing in any major conflict, including against the U.S. in a potential war over the island.
What the drills demonstrated, military analysts said, is the progress China has made coordinating different branches of its armed services, a hallmark of a modern military. China appeared to lack the military assets to impose a total blockade on Taiwan, they said, but Beijing showed it had enough maritime firepower to severely disrupt the island’s economy.
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FM Global, one of the nation’s leading business insurers, will provide a 5% reduction in annual premium to its roughly 1,500 policyholders to spur them to better protect their property against risks including wildfire, floods and hurricanes.
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The carrier is taking the innovative step of providing what it calls a “resilience credit” as concern mounts worldwide that climate-related catastrophes are becoming more frequent and severe. The credit would total about $300 million.
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The first convoy of ships carrying Ukrainian grain sailed from the port of Odessa, in a sign that last month’s agreement with Russia on facilitating Ukrainian food exports is holding even as fighting raged across the country.
A convoy consisting of the bulk carriers Navi Star, Rojen and Polarnet left Odessa, Ukraine, on Friday morning carrying nearly 60,000 tons of corn, passing the city whose horizon has been largely clear of vessels since the war began on Feb. 24. In Russian-occupied southern Ukraine, north of the port city, meanwhile, shelling hit a nuclear power plant.
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U.S. employers added a robust 528,000 jobs last month, helping the economy recoup the 22 million positions lost early in the pandemic, as hirers clamored for workers despite a slowdown in economic growth.
The jobs recovery took nearly 2½ years and included a stretch in the first half of the year when payrolls grew faster than during any other post-World War II period that also featured the start of an economic contraction. The unemployment rate dropped to 3.5% last month, a half-century low also seen just before the pandemic in early 2020, the Labor Department said Friday.
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Israel and Gaza militant group Islamic Jihad agreed to a cease-fire late Sunday after three days of fighting that saw more than 40 Palestinians killed and rockets fly deep into Israel’s heartland, in the most intense exchange of fire since an 11-day conflict last year.
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Dangerous heat gripped parts of the Pacific Northwest and central Plains Sunday, with temperatures in Portland, Ore., likely to top 100 degrees Fahrenheit, the National Weather Service said.
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After Celsius filed for bankruptcy protection, Alex Mashinsky said the move was right ‘for our community and company.’ ILLUSTRATION BY PATRICK LEGER FOR THE WALL STREET JOURNAL
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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.
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Brian Armstrong, co-founder and chief executive officer of Coinbase Inc., at the company office in San Francisco in 2017. PHOTO: MICHAEL SHORT/BLOOMBERG NEWS
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Brian Armstrong, an early devotee of blockchain technology, built the cryptocurrency exchange Coinbase Global Inc. to be big.
He hired employees by the hundreds, pushed into new markets and scaled up the number of digital tokens available on the platform. Coinbase became the largest crypto exchange in America and went public in spring 2021 with a market value of nearly $86 billion.
This year’s crypto collapse has dropped that value to roughly $21 billion. And it has left Mr. Armstrong to wrestle with a sprawling business now faced with high expenses, dwindling cash and, more recently, a challenge from federal regulators.
“Coinbase expanded wildly before it got its sea legs,” said Adam Dell, chief executive of Domain Money, an app that enables investors to buy investments including crypto and is a Coinbase competitor. “They grew so fast that it got away from them.”
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Oracle Corp. laid off hundreds of employees this week as the business software provider prioritizes its healthcare IT services and cloud businesses, according to people familiar with the company’s actions.
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Pfizer Inc. has agreed to buy Global Blood Therapeutics Inc. for $5.4 billion, according to people familiar with the matter, in a deal that would give the big drugmaker a foothold in the treatment of sickle-cell disease.
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Shale companies are reporting banner profits but are warning that inflation in the oil patch is leading them to increase their spending.
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Snickers maker Mars Wrigley has apologized for referring to Taiwan as its own country. PHOTO: JOHN THYS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Mars Wrigley, the manufacturer of the Snickers candy bar, apologized Friday for promotional material that referred to Taiwan as its own country.
The American candy-maker had been promoting what appeared to be an online event with the South Korean boy band BTS in a video on social media. The video, meant for audiences outside China, said attendance was restricted to people of certain countries, and included a flag of Taiwan.
After several nationalistic influencers shared a screenshot of the Snickers promotional video on Weibo, a popular Chinese social media site, thousands of Chinese internet users slammed it for describing Taiwan as a country, and some threatened to boycott the brand.
The social media firestorm prompted Mars Wrigley to issue two apologies on Friday. The company said it had reached out to its regional team in Asia to ask that the language be adjusted.
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