Day: November 11, 2022

Musk Halts Twitter’s Blue Check Fee Program Amid Flood of Impostors

Twitter paused its recently announced $8 blue check subscription service Friday as fake accounts mushroomed and new owner Elon Musk brought back the “official” badge to some users of the social media platform.

The coveted blue check mark was previously reserved for verified accounts of politicians, famous personalities, journalists and other public figures. But a subscription option, open to anyone prepared to pay, was rolled out earlier this week to help Twitter grow revenue as Musk fights to retain advertisers.

The flip-flop is part of a chaotic two weeks at Twitter since Musk completed his $44 billion acquisition. Musk has fired nearly half of Twitter’s workforce, removed its board and senior executives, and raised the prospect of Twitter’s bankruptcy. The U.S. Federal Trade Commission said Thursday it was watching Twitter with “deep concern.”

Several users reported Friday that the new subscription option for the blue verification check mark had disappeared, while a source told Reuters the offering has been dropped.

Twitter did not reply to a request for comment.

Fake accounts purporting to be big brands have popped up with the blue check since the new roll-out, including Musk’s Tesla TSLA.O and SpaceX, as well as Roblox, Nestle NESN.S and Lockheed Martin LMT.N.

“To combat impersonation, we’ve added an ‘Official’ label to some accounts,” Twitter’s support account – which has the “official” tag – tweeted on Friday.

The label was originally introduced Wednesday, but “killed” by Musk just hours later.

Drugmaker Eli Lilly and Co LLY.N issued an apology after an impostor account tweeted that insulin would be free, amid the political backlash and scrutiny of the high prices of the medicine.

“We apologize to those who have been served a misleading message from a fake Lilly account,” the company said, reiterating the name of its Twitter handle.

A number of misleading tweets about Tesla from a verified account with the same profile picture as the company’s official account were also being circulated on the platform.

“Twitter has over the past several years worked to try to improve that (misinformation). And it seems like Elon Musk has unraveled it within a matter of weeks,” said A.J. Bauer, a professor at the University of Alabama.

Musk had said Twitter users engaging in impersonation without clearly specifying it as a “parody” account would be permanently suspended without a warning. Several fake brand accounts, including those of Nintendo 7974.T and BP BP.L, have been suspended.

On Thursday, in his first company-wide email, Musk warned that Twitter would not be able to “survive the upcoming economic downturn” if it failed to boost subscription revenue to offset falling advertising income, three people who saw the message told Reuters.

Many companies, including General Motors GM.N and United Airlines UAL.O, have paused or pulled back from advertising on the platform since Musk took over. In response, the billionaire said Wednesday he aimed to turn Twitter into a force for truth and stop fake accounts.

more

Crypto Firm FTX Files for Bankruptcy, Bankman-Fried Exits

Crypto exchange FTX filed for U.S. bankruptcy proceedings on Friday and founder Sam Bankman-Fried stepped down as CEO, in a stunning downfall that has sent shock waves through markets and drawn calls for better regulation of the digital industry.

The distressed crypto trading platform had been struggling to raise billions in funds to stave off collapse after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The company said in a statement shared on Twitter on Friday that FTX, its affiliated crypto trading firm Alameda Research and about 130 other companies have commenced voluntary Chapter 11 bankruptcy proceedings in Delaware.

FTX had raised $400 million from investors in January, valuing the company at $32 billion. It attracted money from investors such as Singapore state investor Temasek and the Ontario Teachers’ Pension Plan as well as celebrities and sports stars.

Bankman-Fried, 30, known for his trademark shorts and T-shirt attire, has morphed from being the poster child of crypto’s successes to the protagonist of the industry’s highest-profile blowup.

“The shock was that this guy was the face of the crypto industry, and it turned out that the emperor had no clothes,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

The week’s turmoil hit already-struggling cryptocurrency markets, sending bitcoin to two-year lows. Bitcoin dropped after FTX’s announcement and was down 4.3% at $16,803 on Friday afternoon.

Shares of cryptocurrency and blockchain-related firms also dropped on the news.

FTX’s token FTT plunged 30% on Friday to $2.57, facing an 88% weekly loss.

Bankman-Fried, whose net worth was estimated as high as $26.5 billion by Forbes a year ago, repeatedly apologized.

“I’m really sorry, again, that we ended up here,” he said in a series of tweets.

Bankman-Fried did not respond to requests for comment.

Possible contagion effect

In its bankruptcy petition, FTX Trading said it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors. John J. Ray III, a restructuring expert, has been appointed to take over as CEO.

“The next question is how wide of a contagion effect this is going to have on other exchanges and where the next potential losses can occur,” said John Griffin, founder of Integra FEC, which consults on financial fraud investigations.

FTX was scrambling to raise about $9.4 billion from investors and rivals, Reuters reported, citing sources as the exchange sought to save itself after customer withdrawals.

“The Chapter 11 filing is a necessary step to allow the company to assess the situation and develop plans to move forward for the benefit of stakeholders,” Ray said in a Slack memo to FTX staff seen by Reuters.

Ray, 63, oversaw the liquidation of Enron after its bankruptcy filing and served as the senior officer of what became Enron Creditors Recovery Corp. He also oversaw the bankruptcy restructuring at Nortel Networks.

He did not respond to a request for comment.

Some investors, including Sequoia and SoftBank, had already marked FTX investments to zero. SkyBridge Capital is working to buy back its FTX stake, the alternative investment firm’s founder, Anthony Scaramucci, said in an interview with CNBC on Friday.

The reverberation went beyond the financial markets where the exchange has a significant presence, with the Mercedes Formula One team suspending its partnership agreement ahead of the season’s penultimate race in Brazil.

‘The writing was on the wall’

As FTX’s troubles mounted, regulators around the world stepped in.

FTX is under investigation by the U.S. Securities and Exchange Commission, the U.S. Justice Department and the Commodity Futures Trading Commission, according to a source familiar with the investigations.

“Once Binance walked away from buying FTX after only 24 hours of due diligence the writing was on the wall for FTX,” said Antoni Trenchev, co-founder of crypto lender Nexo.

“Now we enter the next phase of the fallout, where we witness the second order effects and discover which entities were exposed to FTX and Alameda.”

more

China Reports 10,000 New Virus Cases; Capital Closes Parks

Beijing closed city parks and imposed other restrictions as the country faces a new wave of COVID-19 cases, even as millions of people remained under lockdown Friday in the west and south of China.

The country reported 10,729 new cases on Friday, almost all of them testing positive while showing no symptoms. More than 5 million people were under lockdown Friday in the southern manufacturing hub Guangzhou and the western megacity Chongqing.

With the bulk of Beijing’s 21 million people undergoing near daily testing, another 118 new cases were recorded in the sprawling city. Many city schools switched to online classes, hospitals restricted services and some shops and restaurants were shuttered, with their staff taken to quarantine. Videos on social media showed people in some areas protesting or fighting with police and health workers.

“It has become normal, just like eating and sleeping,” said food service worker Yang Zheng, 39. “I think what it impacts most is kids because they need to go to school.”

Demands for testing every 24-48 hours are “troublesome,” said Ying Yiyang, who works in marketing.

“My life is for sure not comparable to what it was three years ago,” said Ying. Family visits outside of Beijing can be difficult if the smartphone app that virtually all Chinese are required to display does not green-light travel back to the capital, Ying said.

“I just stay in Beijing,” Ying said.

Numerous villages on the capital’s outskirts that are home to blue-collar workers whose labor keeps the city running were under lockdown. Many live in dormitory communities, which taxi and ride-sharing drivers said they were avoiding so as not to be placed in quarantine themselves.

Lockdowns in Guangzhou and elsewhere were due to end by Sunday, but authorities have repeatedly extended such restrictions with no explanation.

Chinese leaders had promised Thursday to respond to public frustration over its severe “zero-COVID” strategy that has confined millions to their homes and severely disrupted the economy.

The government said Friday it was reducing the amount of time incoming passengers would be required to undergo quarantine. The U.S. embassy this week renewed its advisement for citizens to avoid travel to and within China unless absolutely necessary.

Incoming passengers will only be quarantined for five days, rather than the previous seven, at a designated location, followed by three days of isolation at their place of residence, according to a notice from the State Council, China’s Cabinet.

It wasn’t immediately clear when and where the rules would take effect and whether they would apply to foreigners and Chinese citizens alike.

Relaxed standards would also be applied to foreign businesspeople and athletes, in what appeared to be a gradual move toward normalization.

Airlines will no longer be threatened with a two-week-long suspension of flights if five or more passengers tested positive, the regulations said, potentially providing a major expansion of seats on such flights that have shrunk in numbers and soared in price since restrictions were imposed in 2020.

Those flying to China will only need to show a single negative test for the virus within 48 hours of traveling, the rules said. Formerly, two tests within that time period were required.

“Zero-COVID” has kept China’s infection rate relatively low but weighs on the economy and has disrupted life by shutting schools, factories and shops, or sealing neighborhoods without warning. With the new surge in cases, a growing number of areas are shutting down businesses and imposing curbs on movement. In order to enter office buildings, shopping malls and other public places, people are required to show a negative result from a virus test taken as often as once a day.

With economic growth weakening again after rebounding to 3.9% over a year earlier in the three months ending in September, forecasters had been expecting bolder steps toward reopening the country, whose borders remain largely closed.

President and ruling Communist Party leader Xi Jinping is expected to make a rare trip abroad next week, but has given little indication of backing off on a policy the party has closely associated with social stability and the avowed superiority of his policies.

That has been maintained by its seven-person Politburo Standing Committee, which was named in October at a party congress that also expanded Xi’s political dominance by appointing him to a third five-year term as leader. It is packed with his loyalists, including the former party chief of Shanghai, who enforced a draconian lockdown that sparked food shortages, shut factories and confined millions to their homes for two months or more.

People from cities with a single case in the past week are barred from visiting Beijing, while travelers from abroad are required to be quarantined in a hotel for seven to 10 days — if they are able to navigate the timely and opaque process of acquiring a visa.

Business groups say that discourages foreign executives from visiting, which has prompted companies to shift investment plans to other countries. Visits from U.S. officials and lawmakers charged with maintaining the crucial trading relations amid tensions over tariffs, Taiwan and human rights have come to a virtual standstill.

Last week, access to part of the central city of Zhengzhou, home to the world’s biggest iPhone factory, was suspended after residents tested positive for the virus. Thousands of workers jumped fences and hiked along highways to escape the factory run by Taiwan’s Foxconn Technology Group. Many said coworkers who fell ill received no help and working conditions were unsafe.

Also last week, people posted outraged comments on social media after a 3-year-old boy, whose compound in the northwest was under quarantine, died of carbon monoxide poisoning. His father complained that guards who were enforcing the closure refused to help and tried to stop him as he rushed his son to a hospital.

Despite such complaints, Chinese citizens have little say in policy making under the one-party authoritarian system that maintains rigid controls over media and public demonstrations.

Speculation on when measures will be eased has centered on whether the government is willing to import or domestically produce more effective vaccines, with the elderly population left particularly vulnerable.

That could come as soon as next spring, when a new slate of officials are due to be named under Xi’s continuing leadership. Or, restrictions could persist much longer if the government continues to reject the notion of living to learn with a relatively low level of cases that cause far fewer hospitalizations and deaths than when the pandemic was at its height.

more

Biden to Tout US Climate Legislation at COP27 Summit

President Joe Biden is headed to Egypt for the UN Climate Change Conference (COP27), where he will discuss US climate crisis strategies. But environmental campaigners say wealthy nations need to focus on meeting their $100 billion pledge to cover climate change losses. Anita Powell reports.

more

Former Prisoner Finds Direction, Job Training in Theater

Playwriting and theater production have opened a new world for a California man who spent 17 years in prison. Mike O’Sullivan reports on an arts program that teaches creative skills to former prisoners seeking new lives.

more