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As a symbol of the year in crypto, the sight of Sam Bankman-Fried being hustled out of court in Nassau to a blacked-out SUV that would take him to an airfield, and an extradition flight to New York, takes some beating.

For the highest-profile player in cryptocurrency, 2022 has come to an abrupt and unforgiving end.

The man who received celebrities, prime ministers and presidents in shorts and a T-shirt is no longer the quirky nerd whose genius might unlock the potential to earn digital billions.

Instead, he’s the face of a massive fraud, accused of using customers’ money in the crypto exchange FTX to cover his bad bets and fund a Bahamian penthouse lifestyle while he preached a doctrine of altruism, in which his millions were earned in the service of the less fortunate.

Prosecutors revealed on Wednesday that his closest partners in the business, his co-founder and the some-time girlfriend who ran his crypto hedge fund, have turned, pleading guilty to wrongdoing and providing evidence against him.

SBF, as he is sometimes known, has insisted that none of this was intentional, that the siphoning of customer money to his private accounts is a function of incompetence rather than venality.

But with tens of millions of those dollars having been directed to political donations, Washington is as embarrassed as celebrities like Tom Brady – who beamed their endorsements in FTX’s lavish marketing campaigns – and the outlook is bleak.

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Was it inevitable?

The question for the crypto industry, and the wider field of digital assets, is whether FTX’s collapse is an inevitable symptom of a sector that, in promising to magic value out of the electronic ether, has always been short on trust and credibility, and fertile ground for corruption.

Or is SBF, as his successor as chief executive of FTX alleges, simply an old-fashioned embezzler whose alleged crimes were sophisticated only in the way they were hidden in plain view? And if so, do digital assets have a future not forever mired in wild volatility of questionable assets, sudden collapses, and cons?

It had already been a chastening year with a series of summer collapses, of crypto lender Celsius and the Terra-Luna network, a scandal with its own fugitive from justice, Do Kwon, subject of an arrest warrant in South Korea, and an Interpol red notice.

Naomi Osaka appeared in an ad for FTX
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Naomi Osaka appeared in an ad for FTX

These collapses wiped out billions, and a 75% slump in the value of the original cryptocurrency Bitcoin took a few more, much of it from retail investors whose willingness to exchange real money for digital ciphers is the fuel that keeps the crypto machine running.

Frances Coppola, an economist and noted crypto-sceptic, says these episodes are a consequence of the fundamentally unsound nature of the products, hastened by the wider economic climate in which cheap money is no longer available to top up the punchbowl.

“In the time crypto’s been in existence it has promised much and delivered very little, except a lot of bubbles which have then spectacularly burst,” she says. “We are now in our third major bursting of a crypto bubble in its short timeframe and it’s not at all clear when or if it will recover from this.

“I think FTX and the rest, Terra, Luna, Celsius, are a phenomenon of the crypto bubble that we’ve seen in the last two years. It’s not greatly surprising that it all came to grief when the Fed [US Federal Reserve] started to tighten monetary policy along with other central banks, and the withdrawal from the global economy of all the money that had been pumped in during the pandemic.”

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What went wrong for FTX’s Sam Bankman-Fried?

Wild volatility part of Crypto’s appeal

The wild volatility that has been so costly this year appears to be a fundamental part of crypto’s appeal. Speculation and the ability to massively leverage bets by borrowing from exchanges feels like it has more in common with gambling than an investment, a retail version of the wild derivatives trading exposed to public view at horrible cost in 2008.

That has not stopped mainstream investors from taking a greater interest in crypto. Some of the biggest venture capital funds in America lost money in FTX, and banks are responding to demand from institutional investors unwilling to leave an estimated trillion dollars in new digital assets on the table.

Waqar Chaudry, of Standard Chartered bank, told me the next two years will be pivotal for mainstream engagement with digital finance: “We believe digital assets are here to stay for the long term. The primary job for a bank is to provide services to the clients where they need it.

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“From an institutional banking point of view, there is demand where large institutions are moving into cryptocurrencies. So where they are moving into that world they need service providers who have pedigree in financial services, and they are talking to us about what their plans are and what they look like for the next 12 to 24 months.”

The corporate world meanwhile is looking hard at the technology that lies beneath. These ‘distributed digital ledgers’, in which watertight cryptography and a public network of scrutineers replacing a clearing house or intermediary, have long appeared to have transformational potential.

For years blockchain has seemed like an answer awaiting the right question, but numerous routes are becoming clear.

The value of FTX's FTT token has collapsed over the past month. Pic: CoinMarketCap
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The value of FTX’s FTT token collapsed. Pic: CoinMarketCap

The economy of things

Philip Skipper, Vodafone’s head of technology for the internet of things, says they are crucial to the next step in digital living, ‘the economy of things’.

“We already have devices that you can communicate with. The economy of things is when these devices communicate and transact with each other.

“So you can be driving down the road and your electric car could be communicating with a traffic light, you can be buying access to a congestion charge for the next 50 yards. It’s the ability of these devices to connect and transact together. That is the economy of things. Underpinning that is how you link all those plays together and that’s where blockchain has the key role.”

Global supply chains, so disrupted by COVID, could be transformed by the technology too. The combination of blockchain and stable digital currency opens the door to smart money, which could link payments to quality and delivery at each stage of a production process.

FOR TOM'S EXPLAINER

The flip side of this notion is state-controlled money which limits a citizen’s ability to spend as and when they choose. Imagine welfare payments paid only in approved digital coins that would only unlock for approved products.

The potential of these technologies for good and ill makes the role of regulators and government central, as well as the importance of public debate about what exactly we want from our money.

That absence of regulation is a common theme to the catastrophic failures in crypto this year. Ironically for a technology that promised to bypass mainstream institutions, they will be central to shaping the future of crypto and blockchain.

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City veteran Kheraj in contention to chair banking giant HSBC

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City veteran Kheraj in contention to chair banking giant HSBC

Naguib Kheraj, the City veteran, has been shortlisted to become the next chairman of HSBC Holdings, Europe’s biggest bank.

Sky News can reveal that Mr Kheraj, a former Barclays finance chief, is among a small number of contenders currently being considered to replace Sir Mark Tucker.

HSBC, which has a market capitalisation of £165.4bn, has been conducting a search for Sir Mark’s successor since the start of the year.

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In June, Sky News revealed that the former McKinsey boss Kevin Sneader was among the candidates being considered to lead the bank, although it was unclear this weekend whether he remained in the process.

Mr Kheraj would, in many respects, be seen as a solid choice for the job.

He is familiar with HSBC’s core markets in Asia, having spent several years on the board of Standard Chartered, the FTSE-100 bank, latterly as deputy chairman.

He also possesses extensive experience as a chairman, having led the privately held pensions insurer Rothesay Life, while he now chairs Petershill Partners, the London-listed private equity investment group backed by Goldman Sachs.

Mr Kheraj’s other interests have included acting as an adviser to the Aga Khan Development Board and The Wellcome Trust, as well as the Financial Services Authority.

He spent 12 years at Barclays, holding board roles for much of that time, before he went on to become chief executive of JP Morgan Cazenove, the London-based investment bank.

HSBC’s shares have soared over the last year, rising by close to 50%, despite the headwinds posed by President Donald Trump’s sweeping global tariffs regime.

In June, the bank said that Sir Mark would be replaced on an interim basis by Brendan Nelson, one of its existing board members, while it continued the search for a permanent successor.

Ann Godbehere, HSBC’s senior independent director, said at the time: “The nomination and corporate governance committee continues to make progress on the succession process for the next HSBC group chair.

“Our focus is on securing the best candidate to lead the board and wider group over the next phase of our growth and development.”

Sky News revealed late last year that MWM, the headhunter founded by Anna Mann, a prominent figure in the executive search sector, was advising HSBC on the process.

Since then, at least one other firm has been drafted in to work on the mandate.

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Sir Mark, who has chaired HSBC since 2017, steps down at the end of next month to become non-executive chair of AIA, the Asian insurer he used to run.

He will continue to advise HSBC’s board during the hunt for his long-term successor.

As a financial behemoth with deep ties to both China and the US, HSBC is deeply exposed to escalating trade and diplomatic tensions between the two countries.

When he was appointed, Mr Tucker became the first outsider to take the post in the bank’s 152-year history – which has a big presence on the high street thanks to its acquisition of the Midland Bank in 1992.

He oversaw a rapid change of leadership, appointing bank veteran John Flint to replace Stuart Gulliver as chief executive.

The transition did not work out, however, with Mr Tucker deciding to sack Mr Flint after just 18 months.

He was replaced on an interim basis by Noel Quinn in the summer of 2018, with that change becoming permanent in April 2020.

Mr Quinn spent a further four years in the post before deciding to step down, and in July 2024 he was succeeded by Georges Elhedery, a long-serving executive in HSBC’s markets unit, and more recently the bank’s chief financial officer.

The new chief’s first big move in the top job was to unveil a sweeping reorganisation of HSBC that sees it reshaped into eastern markets and western markets businesses.

He also decided to merge its commercial and investment banking operations into a single division.

The restructuring, which Mr Elhedery said would “result in a simpler, more dynamic, and agile organisation” has drawn a mixed reaction from analysts, although it has not interrupted a strong run for the stock.

During Sir Mark’s tenure, HSBC has also continued to exit non-core markets, selling operations in countries such as Canada and France as it has sharpened its focus on its Asian businesses.

On Friday, HSBC’s London-listed shares closed at 946.7p.

HSBC has been contacted for comment.

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Bank shares take fright as budget tax hike is floated

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Bank shares take fright as budget tax hike is floated

Shares in UK banks have fallen sharply on the back of a report which urges the chancellor to place their profits in her sights at the coming budget.

As Rachel Reeves stares down a growing deficit – estimated at between £20bn-£40bn heading into the autumn – the Institute for Public Policy Research (IPPR) said there was an opportunity for a windfall by closing a loophole.

It recommended a new levy on the interest UK lenders receive from the Bank of England, amounting to £22bn a year, on reserves held as a result of the Bank’s historic quantitative easing, or bond-buying, programme.

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It was first introduced at the height of the financial crisis, in 2009.

The left-leaning think-tank said the money received by banks amounted to a subsidy and suggested £8bn could be taken from them annually to pay for public services.

It argued that the loss-making scheme – a consequence of rising interest rates since 2021 – had left taxpayers footing the bill unfairly as the Treasury has to cover any loss.

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Why taxes might go up

The Bank recently estimated the total hit would amount to £115bn over the course of its lifetime.

The publication of the report coincided with a story in the Financial Times which spoke of growing fears within the banking sector that it was firmly in the chancellor’s sights.

Her first budget, in late October last year, put businesses on the hook for the bulk of its tax-raising measures.

Ms Reeves is under pressure to find more money from somewhere as she has ruled out breaking her own fiscal rules to help secure the cash she needs through heightened borrowing.

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Is Labour plotting a ‘wealth tax’?

Other measures understood to be under consideration include a wealth tax, new property tax and a shake-up that could lead to a replacement for council tax.

Analysts at Exane told clients in a note: “In the last couple of years, the chancellor has been protective of the banks and has avoided raising taxes.

“However, public finances may require additional cash and pressures for a bank tax from within the Labour party seem to be rising,” it concluded.

The investor flight saw shares in Lloyds and NatWest plunge by more than 5%. Those for Barclays were more than 4% lower at one stage.

A spokesperson for the Treasury said the best way to strengthen public finances was to speed up economic growth.

“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms,” they added.

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Controversial P&O Ferries boss Hebblethwaite to quit

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Controversial P&O Ferries boss Hebblethwaite to quit

The man dubbed “Britain’s most hated boss” for his controversial policy of sacking hundreds of seafarers and replacing them with cheaper agency staff is to quit.

Sky News can exclusively reveal that Peter Hebblethwaite, the chief executive of P&O Ferries, is leaving the company.

Sources said he had decided to resign for personal reasons.

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Mr Hebblethwaite joined the ranks of Britain’s most notorious corporate figures in 2022 when P&O Ferries – a subsidiary of the giant Dubai-based ports operator DP World – said it was sacking 800 staff with immediate effect – some of whom learned their fate via a video message.

The policy, which Mr Hebblethwaite defended to MPs during subsequent select committee hearings, erupted into a national scandal, prompting changes in the law to give workers greater protection.

Under the new legislation, the government plans to tighten collective redundancy requirements for operators of foreign vessels.

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In a statement issued in response to a request from Sky News, a P&O Ferries spokesperson said: “Peter Hebblethwaite has communicated his intention to resign from his position as chief executive officer to dedicate more time to family matters.

Peter Hebblethwaite gives evidence to a committee of MPs in 2022. Pic: PA
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Peter Hebblethwaite gives evidence to a committee of MPs in 2022. Pic: PA

“P&O Ferries extends its gratitude to Peter Hebblethwaite for his contributions as CEO over the past four years.

“During his tenure the company navigated the challenges of the COVID-19 pandemic, initiated a path towards financial stability, and introduced the world’s first large double-ended hybrid ferries on the Dover-Calais route, thereby enhancing sustainability.

“We extend our best wishes to him for his future endeavours.”

A source close to the company said it anticipated making an announcement on Mr Hebblethwaite’s successor in the near term.

A former executive at J Sainsbury, Greene King and Alliance Unichem, Mr Hebblethwaite joined P&O Ferries in 2019, before taking over as chief executive in November 2021.

Insiders claimed on Friday that he had “transformed” the business following the bitter blows dealt to its finances by the COVID-19 pandemic and – to some degree – by the impact of Britain’s exit from the European Union.

A union protest is shown at the height of the mass sackings  row in 2022
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A union protest is shown at the height of the mass sackings row in 2022

P&O Ferries carries 4.5 million passengers annually on routes between the UK and continental European ports including Calais and Rotterdam.

It also operates a route between Northern Ireland and Scotland, and is a major freight carrier.

The company’s losses soared during the pandemic, with DP World – its sole shareholder – supporting it through hundreds of millions of pounds in loans.

Its most recent accounts, which were significantly delayed, showed a significant reduction in losses in 2023 to just over £90m.

The reduction from the previous year’s figure of almost £250m was partly attributed to cost reduction exercises.

The accounts also showed that Mr Hebblethwaite received a pay package of £683,000, including a bonus of £183,000.

“I reflected on accepting that payment, but ultimately I did decide to accept it,” he told MPs.

“I do recognise it is not a decision that everybody would have made.”

The row over his pay was especially acute because of his admission that P&O Ferries’ lowest-paid seafarers received hourly pay of just £4.87.

Mr Hebblethwaite had argued since the mass sackings of 2022 that the company would have gone bust without the drastic cost-cutting that it entailed.

The company insisted at the time that those affected by the redundancies had been offered “enhanced” packages to leave.

Last October, the then transport secretary, Louise Haigh, said: “The mass sacking by P&O Ferries was a national scandal which can never be allowed to happen again,” adding that measures to protect seafarers from “rogue employers” would prevent a repetition.

“This issue has been ignored for over 2 years, but this new government is moving fast and bringing forward measures within 100 days,” Ms Haigh added.

“We are closing the legal loophole that P&O Ferries exploited when they sacked almost 800 dedicated seafarers and replaced them with low-paid agency workers and we are requiring operators to pay the equivalent of National Minimum Wage in UK waters.

“Make no mistake – this is good for workers and good for business.”

The minister’s description of P&O Ferries as “rogue”, and suggestion that consumers should boycott the company, sparked a row which threatened to overshadow the government’s International Investment Summit last October.

Sky News’s business and economics correspondent, Paul Kelso, revealed that DP World had withdrawn from participating in the event, and paused a £1bn investment announcement.

The company relented after Sir Keir Starmer publicly distanced the government from Ms Haigh’s characterisation of DP World.

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