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US singer Taylor Swift poses in the press room after winning six awards at the 50th Annual American Music Awards at the Microsoft Theater in Los Angeles, California, on November 20, 2022. –

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Earlier this year, as the crypto meltdown was draining the industry of liquidity, FTX executives were begging company founder Sam Bankman-Fried to preserve cash and stop spending hundreds of millions of dollars on celebrity endorsements.

But the 30-year-old billionaire, who’d relied on branding and hype to rapidly take his crypto exchange from upstart to stalwart, was set on signing up one more big name.

Three people close to FTX and Bankman-Fried told CNBC that the former CEO lobbied aggressively for a partnership with 11-time Grammy Award winner Taylor Swift. The deal, which would have cost the now bankrupt company more than $100 million over three years, was close to coming to fruition before it fell apart in the spring, said the people, who asked not to be named because of confidentiality agreements.

The former executives, who had direct knowledge of the negotiations, said the partnership would’ve been a disaster for FTX because of the steep price tag. Bankman-Fried’s commitment to getting the Swift deal done despite the deteriorating business environment fit a pattern of ignoring his lieutenants and going it alone, a half-dozen former company insiders and business partners said.

The Financial Times reported earlier that FTX held talks with Swift about a potential sponsorship.

Bankman-Fried’s overconfidence was embedded into an organization that had few checks on its leader and no board of directors to hold him accountable. Meanwhile, Bankman-Fried portrayed a very different persona to the public, showing himself as a quirky young genius comfortable in shorts and a T-shirt or in a suit in front of Congress who repeatedly professed his belief in effective altruism, a philosophy that promotes the idea of earning a lot of money in order to donate it to the most important causes.

Valued at $32 billion earlier this year by private investors, FTX spiraled into bankruptcy last month after skepticism emerged about the health of the crypto exchange’s financials and customers began demanding withdrawals only to be told their money wasn’t available. Even facing potential criminal charges and the possibility of years in prison, Bankman-Fried has continued to shun advisers by speaking publicly, offering press interviews and tweeting his defense.

CEO Sam Bankman-Fried

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“I have a duty to talk to people; I have a duty to explain what happened,” Bankman-Fried said in a video interview at the New York Times DealBook Summit last week, acknowledging that his lawyers are opposed to his current tactics. “I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist.”

Between his DealBook appearance, an interview with ABC’s “Good Morning America” and his commentary on various podcasts, Bankman-Fried has repeatedly claimed that FTX’s downfall was the result of sloppy management and excessive risk.

Bankman-Fried has denied committing fraud and said he was unaware of much of the intermingling of funds that took place between FTX and Alameda Research, Bankman-Fried’s hedge fund. At least $8 billion in FTX customer funds are now unaccounted for and were used to backstop billions in loan losses at Alameda.

Pursuing Swift NFTs

Bankman-Fried also ran fast and loose with company cash. Within just over two years of starting FTX in 2019, Bankman-Fried signed a $135 million, 19-year deal with the NBA’s Miami Heat for naming rights on the team’s arena. He also inked sponsorships with the Golden State Warriors, Major League Baseball and Formula One and got Larry David to promote the company in a Super Bowl ad. Gisele Bündchen, Tom Brady, Shaquille O’Neal, Stephen Curry, David Ortiz and Naomi Osaka were among the brand’s ambassadors.

Part of the Swift deal would have included the production by the singer of a collection of non-fungible tokens (NFTs), or digital items that can rise and fall in value. Beyond that, there was a lack of clarity over what Swift would be doing for the company, sources said. After the Swift agreement fell apart, talks emerged internally over a deal with Katy Perry as recently as August, one person said.

Representatives for Swift declined to comment, and Perry did not respond to CNBC’s request for comment.

Sam Bankman-Fried faces possible bankruptcy after failed FTX deal

FTX insiders said that while some people in and around the company questioned Bankman-Fried’s decisions, he surrounded himself most immediately with a crew of yes men. Two sources used the word “insular” in describing his leadership style. Bankman-Fried mainly sought advice from a tight-knight group in the Bahamas, where he lived and where the company was headquartered, sources said.

One former FTX executive said Bankman-Fried had a tendency to chew out employees who disagreed with him in a way that deterred others from speaking up. When Bankman-Fried was angry, sources said his knee-jerk reaction was to immediately blame underlings. Some former insiders said Bankman-Fried put on an act for the public, portraying himself as an easygoing CEO.

Bankman-Fried said in a message to CNBC that he disagrees with the characterizations provided by those former employees. He declined to comment on details of the Swift negotiations.

“Partnerships were an area that was more contentious and on the margin I originally was in favor and ultimately started pushing back on new ones,” Bankman-Fried said in the message.

John Ray, the new CEO tapped to restructure FTX said in filings that in his 40 years of legal experience, which includes Enron’s liquidation, he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

One of Bankman-Fried’s closest confidants was Caroline Ellison, the ex-CEO of Alameda Research, who he once dated. The pair would often go on lunch walks around FTX’s fenced-in Nassau headquarters, one FTX executive said.

Outside of his Bahamas cohort, Bankman-Fried went to great lengths to avoid speaking to others and he stayed away from face-to-face confrontations, preferring the encrypted messaging app Signal or Slack, one top deputy said. He frequently ignored messages from C-level executives if he disagreed with them.

Another former insider said employees were afraid of Bankman-Fried, adding that “there were very few people who were willing to challenge Sam.”

WATCH: Bankman-Fried said he didn’t ever try to commit fraud on anyone

I didn't ever try to commit fraud on anyone: Sam Bankman-Fried

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Just Eat shares soar 54% after Prosus offers to buy food delivery firm for $4.3 billion

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Just Eat shares soar 54% after Prosus offers to buy food delivery firm for .3 billion

Just Eat Takeaway said it was delisting its shares from the London Stock Exchange due to the “low liquidity and trading volumes” of its shares on the exchange.

Mike Kemp | In Pictures | Getty Images

European food delivery giant Just Eat Takeaway.com is poised to be acquired by Dutch technology investor Prosus in an all-cash deal worth roughly 4.1 billion euros ($4.3 billion).

The offer values Just Eat’s shares at 20.3 euros each, representing a premium of 63% when compared to the firm’s closing price on Friday.

Prosus, which is majority owned by South Africa’s Naspers, already holds a 28% stake in leading food delivery company Delivery Hero.

Shares of Just Eat soared as much as 54% on Monday morning, notching a new 52-week high. The stock price was last seen trading 52.8% higher on the news.

Prosus shares fell 8.3%, tumbling to the bottom of the pan-European Stoxx 600 index, while Delivery Hero rose 5.4%.

“We are very excited for Just Eat Takeaway.com to join the Prosus group and the opportunity to create a European tech champion,” Fabricio Bloisi, CEO of Prosus and Naspers group, said in a statement.

“We believe that combining Prosus’ strong technical and investment capabilities with Just Eat Takeaway.com’s leading brand position in key European markets will create significant value for our customers, drivers, partners, and shareholders,” Bloisi said.

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Just Eat

The offer comes after a rocky few years for Just Eat. Like many other food delivery companies, the company’s stock price collapsed in the wake of the coronavirus pandemic, which had initially boosted the firms as consumers turned to these platforms during lockdowns.

A stark shift in consumer habits since, however, led to a sharp deceleration in growth rates.

The Dutch multinational delisted from the London Stock Exchange late last year, citing an effort to “reduce the administrative burden, complexity and costs associated with the disclosure and regulatory requirements of maintaining the LSE listing.” The move made Amsterdam the firm’s sole trading venue.

In November, Just Eat Takeaway.com said it would sell its GrubHub arm to New York-based online takeout startup Wonder for $650 million — a huge discount compared to the $7.3 billion the firm paid for the U.S. food delivery app.

“Prosus fully supports our strategic plans and its extensive resources will help to further accelerate our investments and growth across food, groceries, fintech and other adjacencies. We are looking forward to an exciting future together,” Jitse Groen, CEO and founder of Just Eat Takeaway.com, said in a statement on Monday.

— CNBC’s Ryan Browne contributed to this report.

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Chinese medical devices are in health systems across U.S., and the government and hospitals are worried

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Chinese medical devices are in health systems across U.S., and the government and hospitals are worried

A popular medical monitor is the latest device produced in China to receive scrutiny for its potential cyber risks.  However, it is not the only health device we should be concerned about. Experts say the proliferation of Chinese health-care devices in the U.S. medical system is a cause for concern across the entire ecosystem. 

The Contec CMS8000 is a popular medical monitor that tracks a patient’s vital signs.  The device tracks electrocardiograms, heart rate, blood oxygen saturation, non-invasive blood pressure, temperature, and respiration rate.  In recent months, the FDA and the Cybersecurity and Infrastructure Security Agency (CISA) both warned about a “backdoor” in the device, an “easy-to-exploit vulnerability that could allow a bad actor to alter its configuration.”  

CISA’s research team described “anomalous network traffic” and the backdoor “allowing the device to download and execute unverified remote files” to an IP address not associated with a medical device manufacturer or medical facility but a third-party university — “highly unusual characteristics” that go against generally accepted practices, “especially for medical devices.”

“When the function is executed, files on the device are forcibly overwritten, preventing the end customer—such as a hospital—from maintaining awareness of what software is running on the device,” CISA wrote.

The warnings says such configuration alteration could lead to, for instance, the monitor saying that a patient’s kidneys are malfunctioning or breathing failing, and that could cause medical staff to administer unneeded remedies that could be harmful. 

The Contec’s vulnerability doesn’t surprise medical and IT experts who have warned for years that medical device security is too lax. 

Hospitals are worried about cyber risks

“This is a huge gap that is about to explode,” said Christopher Kaufman, a business professor at Westcliff University in Irvine, California, who specializes in IT and disruptive technologies, specifically referring to the security gap in many medical devices.

The American Hospital Association, which represents over 5,000 hospitals and clinics in the U.S., agrees. It views the proliferation of Chinese medical devices as a serious threat to the system. 

As for the Contec monitors specifically, the AHA says the problem urgently needs to be addressed. 

“We have to put this at the top of the list for the potential for patient harm; we have to patch before they hack,” said John Riggi, national advisor for cybersecurity and risk for the American Hospital Association.  Riggi also served in FBI counterterrorism roles before joining the AHA. 

CISA reports that no software patch is available to help mitigate this risk, but in its advisory said the government is currently working with Contec. 

Contec, headquartered in Qinhuangdao, China,  did not return a request for comment. 

One of the problems is that it is unknown how many monitors there are in the U.S. 

“We don’t know because of the sheer volume of equipment in hospitals. We speculate there are, conservatively, thousands of these monitors; this is a very critical vulnerability,” Riggi said, adding that Chinese access to the devices can pose strategic, technical, and supply chain risks. 

In the short-term, the FDA advised medical systems and patients to make sure the devices are only running locally or to disable any remote monitoring; or if remote monitoring is the only option, to stop using the device if an alternative is available. The FDA said that to date it is not aware of any cybersecurity incidents, injuries, or deaths related to the vulnerability.

The American Hospital Association has also told its members that until a patch is available, hospitals should make sure the monitor no longer has access to the internet, and is segmented from the rest of the network.

Riggi said the while the Contec monitors are a prime example of what we don’t often consider among health care risk, it extends to a range of medical equipment produced overseas. Cash-strapped U.S. hospitals, he explained, often buy medical devices from China, a country with a history of installing destructive malware inside critical infrastructure in the U.S.  Low-cost equipment buys the Chinese potential access to a trove of American medical information that can be repurposed and aggregated for all sorts of purposes. Riggs says data is often transmitted to China with the stated purpose of monitoring a device’s performance, but little else is known about what happens to the data beyond that. 

Riggi says individuals aren’t at acute medical risk as much as the information being collected and aggregated for repurposing and putting the larger medical system at risk. Still, he points out that, at least theoretically, is can’t be ruled out that prominent Americans with medical devices could be targeted for disruption. 

“When we talk to hospitals,  CEOS are surprised, they had no idea about the dangers of these devices, so we are helping them understand.  The question for government is how to incentivize domestic production, away from overseas,”  Riggi said. 

Chinese data collection on Americans

The Contec warning is similar at a general level to TikTok, DeepSeek, TP-Link routers, and other devices and technology from China that the U.S. government says are collecting data on Americans. “And that is all I need to hear in deciding whether to buy medical devices from China,” Riggi said. 

Aras Nazarovas, an information security researcher at Cybernews, agrees that the CISA threat raises serious issues that need to be addressed. 

“We have a lot to fear,” Nazarovas said. Medical devices, like the Contec CMS8000, often have access to highly sensitive patient data and are directly connected to life-saving functions.  Nazarovas says that when the devices are poorly defended, they become easy prey for hackers who can manipulate the displayed data, alter vital settings, or disable the device completely.  

“In some cases, these devices are so poorly protected that attackers can gain remote access and change how the device operates without the hospital or patients ever knowing,” Nazarovas said. 

The consequences of the Contec vulnerability and vulnerabilities in an array of Chinese-made medical devices could easily be life-threatening.  

“Imagine a patient monitor that stops alerting doctors to a drop in a patient’s heart rate or sends incorrect readings, leading to a delayed or wrong diagnosis,” Nazarovas said. In the case of the Contec CMS8000, and Epsimed MN-120 (a different brand name for the same tech), warning from the government, these devices were configured to allow remote code execution by the remote server.  

“This functionality can be used as an entry point into the hospital’s network,” Nazarovas said, leading to patient danger.  

More hospitals and clinics are paying attention. Bartlett Regional Hospital in Juneau, Alaska, does not use the Contec monitors but is always looking for risks. “Regular monitoring is critical as the risk of cybersecurity attacks on hospitals continues to increase,” says Erin Hardin, a spokeswoman for Bartlett.  

However, regular monitoring may not be enough as long as devices are made with poor security. 

Potentially making matters worse, Kaufman says, is that the Department of Government Efficiency is hollowing out departments in charge of safeguarding such devices. According to the Associated Press, many of the recent layoffs at the FDA are employees who review the safety of medical devices. 

Kaufman laments the likely lack of government supervision on what is already, he says, a loosely regulated industry. A U.S. Government Accountability Office report as of January 2022, indicated that 53% of connected medical devices and other Internet of Things devices in hospitals had known critical vulnerabilities. He says the problem has only gotten worse since then. “I’m not sure what is going to be left running these agencies,” Kaufman said.

“Medical device issues are widespread and have been known for some time now,” said Silas Cutler, principal security researcher at medical data company Censys. “The reality is that the consequences can be dire – and even deadly. While high-profile individuals are at heightened risk, the most impacted are going to be the hospital systems themselves, with cascading effects on everyday patients.”  

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Substack boosts video capabilities amid potential TikTok ban

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Substack boosts video capabilities amid potential TikTok ban

Rafael Henrique | SOPA Images | AP

After posting almost 200 videos, amassing hundreds of thousands of followers and racking up millions of views, Carla Lalli Music is quitting YouTube. Substack is her new focus. 

Music is a cookbook author and food content creator, and she is shifting her focus to Substack, a subscription platform that lets creators charge users subscriptions for access to their content. Music told CNBC she came to that decision after earning more in one year of using Substack, nearly $200,000 in revenue, than she did by posting videos on YouTube since 2021. 

Music is the exact kind of content creator that Substack is trying to lure to its platform as TikTok’s future in the U.S. remains in limbo. 

San Francisco-based Substack launched in 2017 as a tool for newsletter writers to charge readers a monthly fee to read their content. The platform allows creators to connect to their followers directly without having to navigate algorithmic models that control when their content is shown, as is the case on TikTok, Google’s YouTube and other social platforms. Substack has raised about $100 million, most recently at a post-money valuation of more than $650 million, the company told CNBC.

This year, Substack has broadened its focus beyond newsletters, and on Thursday, it announced that creators can now post video content directly through the Substack app and monetize these videos.

“There’s going to be a world of people who are much more focused on videos,” Substack Co-founder Hamish McKenzie told CNBC. “That is a huge world that Substack is only starting to penetrate.”

Substack began this push after the social media landscape was thrown into flux as a result of the effective ban of TikTok in January that caused the popular Chinese-owned service to go offline for a few hours. TikTok was also removed from Apple and Google’s app stores for nearly a month. 

The disruption to TikTok in January happened as a result of a law signed by former President Joe Biden to force a sale of the Chinese-owned app or have it effectively banned in the U.S. On his first day in office, President Donald Trump signed an executive order extending TikTok’s ability to operate in the U.S., but that order expires on April 5. 

Days after TikTok went offline, Substack launched a $20 million fund to court creators to its platform.

“If TikTok gets banned for political reasons, there’s nothing to do with the work you’ve done, but it really affects your life,” McKenzie said. “The only and surefire guard against that is if you don’t place your audience in the hands of some other volatile system who doesn’t care about what happens to your livelihood.”

Moving beyond newsletters

McKenzie says that they are going after creators on competing social media platforms to start sharing their video content on Substack.

“Video-first creators, people who are mobile oriented, there’s a whole lot of new possibility waiting to be unlocked once they meet this model in the right place,” McKenzie said. 

Already, Substack has more than 4 million paid subscriptions with over 50,000 creators who make money on the platform, the company said. Substack says that 82% of its top 250 revenue-generating creators have already integrated audio or video into their content, reflecting a growing emphasis on multimedia content.

Prior to the video announcements, Substack allowed creators to post videos on the app to Notes, which is the platform’s front-facing feed format. But the feature did not allow creators to publish video content behind Substack’s paywalls. 

The update enables creators to put video content behind a paywall and it provides data on estimated revenue impact. It also allows them to track viewership and new subscribers.

Carla Lalli Music is a cookbook writer and food creator.

Carla Lalli Music

Our base case for TikTok is that it gets banned in the U.S.: Lead Edge Capital's Mitchell Green

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