🐂 Dubious

Markets

Stocks saw an upward trend yesterday, but there is anticipation of potential market turbulence due to the ongoing conflict in Israel. The news triggered a surge in oil prices as worries about the conflict's potential to disrupt the supply led to a rally. Leading defense corporations, Lockheed Martin and Northrop Grumman, experienced their most successful non-earnings days since 2020.

Higher Bond Yields Likely to Extend Fed Rate Pause

The Federal Reserve's potentially historic cycle of increasing interest rates might be winding down in an underwhelming manner due to the persistent elevation of long-term Treasury yields.

Key figures within the central bank have conveyed in recent days that they may refrain from further hikes in short-term interest rates as long-term rates remain close to their recent peaks and as inflation shows signs of moderation.

In July, the Fed elevated its benchmark federal-funds rate to a range spanning from 5.25% to 5.5%, marking a 22-year high. Officials maintained the rates at their most recent meeting last month and indicated their intention to raise rates during one of their two remaining meetings this year.

International

How Hamas has fundraised using Crypto

The Israeli police's cyber division recently disclosed that Israel has taken measures to freeze multiple cryptocurrency accounts on the Binance exchange, suspecting that these accounts were being used by Hamas to raise funds. However, it remains uncertain whether these closed accounts directly contributed to the recent attack on Israeli civilians, which marked the beginning of the ongoing conflict between Israel and Hamas.

The exact number of frozen accounts and the total amount of cryptocurrency seized were not specified, but authorities have indicated that the confiscated funds will be redirected to Israel's state treasury.

This action is not unprecedented, as Israel has previously confiscated 190 other Binance wallets believed to be linked to Hamas or the Islamic State group since 2021, as reported by Reuters in May.

Hamas has gained recognition for being a proficient user of cryptocurrency for financing its activities, according to a former US treasury official interviewed by the Wall Street Journal. As a group primarily funded by Iran, Hamas leverages cryptocurrencies solicited through social media to circumvent international banking sanctions imposed due to its designation as a terrorist organization by the US and EU.

Hamas publicly initiated crypto fundraising in 2019 via its Telegram channel, raising approximately $30,000 in bitcoin for one wallet during that year. Between the summer of 2021 and the summer of 2023, roughly $41 million worth of cryptocurrency was deposited into wallets associated with Hamas, as reported by the Tel Aviv-based analytics firm BitOK.

Other US- and EU-designated terrorist groups involved in the conflict against Israel, such as the Palestinian Islamic Jihad (PIJ) and Hezbollah, have also partially funded their operations using digital currency:

• The PIJ raised $93 million in cryptocurrency between August 2021 and June 2023 and transferred more than $12 million in digital currency to Hezbollah, according to Elliptic, a crypto analytics provider.

• In June, Israel seized $1.7 million in cryptocurrency from wallets connected to Hezbollah and the Iranian military.

Zooming out, the anonymity and relative difficulty of tracing cryptocurrency transactions have made it an attractive choice for terror financing. According to UN estimates, crypto-assisted attacks have increased substantially in recent years. However, advancements in blockchain tracking technology and requirements for user identification on crypto platforms have made it somewhat easier for authorities to identify and seize illicit funds.

Politics

Biden calls Hamas attacks “sheer evil.

In a compelling address, President Biden strongly condemned the killing of Israeli civilians by Hamas, drawing parallels to the ruthless tactics employed by the Islamic State group. He underscored the unwavering support of the United States for Israel. President Biden also confirmed that American citizens are among the approximately 100-150 individuals taken as hostages from Israel to Gaza. Disturbing reports have emerged from journalists who visited Kfar Aza, a southern Israeli kibbutz where a tragic massacre took place.

Meanwhile, Israel continued its airstrikes on Gaza, with preparations for a large-scale ground operation aimed at eliminating Hamas. The airstrikes have resulted in the loss of at least 900 Palestinian lives, and Gaza's hospitals are grappling with dwindling supplies to treat the numerous injured individuals.

Crypto

Caroline Ellison says she committed crimes with SBF

It's not a common occurrence for the US government to request individuals to publicly criticize their former partners, but Caroline Ellison found herself in that position as she testified in the fraud trial of Sam Bankman-Fried.

As the key witness for the prosecution against the former CEO of FTX, she pointed to SBF as the mastermind behind the alleged crimes, stating, "He directed me to commit these crimes."

Caroline Ellison, the former CEO of Alameda Research, plays a pivotal role in this case. The government alleges that FTX unlawfully utilized customer funds to support Alameda, the crypto hedge fund she led. Additionally, Ellison had an on-and-off romantic relationship with SBF and shared a penthouse in the Bahamas with him. In December, she pleaded guilty to seven criminal charges, including conspiracy to commit wire fraud and conspiracy to commit money laundering. As part of her agreement with the prosecutors, she agreed to cooperate.

During her testimony, Ellison revealed the following:

• SBF instructed her to use customer funds from FTX to settle Alameda's debts.

• Alameda received approximately $14 billion from FTX customer funds.

• SBF believed he had a slim 5% chance of becoming the President of the United States.

In the broader context of the trial, the defense is attempting to portray SBF as a daring, unconventional individual with limited business acumen. On the other hand, the prosecution aims to use testimony from Ellison and FTX co-founder Gary Wang to establish the financial interconnectedness between Alameda and FTX, asserting that SBF was aware of it.

The cast of characters in the SBF trial includes various key figures involved in this legal proceeding.

State

California to ban popular candy ingredients

Over the weekend, California's governor signed a groundbreaking law, positioning the state as the first to prohibit the production and sale of food items containing specific additives, including red dye No. 3, potassium bromate, brominated vegetable oil, and propylparaben. These chemicals are currently present in approximately 12,000 food products, but some studies have raised concerns about their safety.

Although the legislation became colloquially known as the "Skittles ban," it's worth noting that Californians will still be able to enjoy the taste of the rainbow, as a chemical found in Skittles was excluded from the ban before it was enacted. Furthermore, a modified version of Skittles is available in the European Union (EU), which has already banned this particular additive. The law will come into effect in California in 2027.