Raphael Stevens

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Major oil executives, policymakers and ministers convene in Abu Dhabi at ADIPEC this week to discuss energy markets as the world grapples with a transition to clean energy. It comes just weeks ahead of the COP28 climate talks, which will be held in Dubai later this year.

CNBC’s Steve Sedgwick is joined in Abu Dhabi by the CEOs of BP, Shell and other major international energy companies for a discussion on the challenges of the energy transition.
Titled “Actions for a net-zero world: solving the current energy trilemma,” Monday’s panel includes Murray Auchincloss, interim BP CEO, Occidental CEO Vicki Hollub, Eni CEO Claudio Descalzi, TotalEnergies CEO Patrick Pouyanne, Shell CEO Wael Sawan and Tengku Muhammad Tufik, the president and CEO of Petronas.
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Billions in FTX customer and investor money is tied up in an ongoing bankruptcy process.
Some who have lost millions of dollars tell CNBC they haven’t lost faith in the industry and are cashing out through other means in order to reinvest in crypto.
“I’m in quite a big hole right now,” says one customer. “I’m probably going to have to file for bankruptcy.

FTX’s multibillion-dollar cryptocurrency blowup hasn’t destroyed all faith in the industry. 
In a new documentary premiering Monday, FTX customers, insiders and investors tell CNBC that despite not receiving a single dollar worth of cryptocurrency back, they’re optimistic on the industry and plan to keep investing. 

Evan Luthra, an app developer, entrepreneur and angel investor, told CNBC he lost $2 million dollars in the collapse of FTX. Luthra said he knew when FTX filed for bankruptcy in late 2022 that he wouldn’t have “access to any of this money for the next few years.” He continues to speak at crypto conferences

FTX Customer, Evan Luthra, spoke to CNBC in Miami before speaking at a crypto conference.

“I do want everybody to understand that the mistake here was not bitcoin, the mistake was not crypto,” Luthra said. “The fundamental reason why we buy bitcoin, why we use bitcoin has not changed.” 
Luthra said his hefty loss on FTX hasn’t shaken his bitcoin bullishness.
“I know it’s going to end up at over $100,000 sooner or later anyways, so for me it’s a great buy,” he said. Bitcoin is currently trading at about $26,900, down from a high of about $69,000 in December 2021.
“All the success is made in the trenches, not when everybody’s already celebrating,” he said. 

FTX, once one of the largest cryptocurrency exchanges in the world, spiraled into bankruptcy after its swift collapse last year. Shortly after, FTX investigators said they discovered $8.9 billion dollars in customer assets were missing from the exchange.
FTX founder and ex-CEO Sam Bankman-Fried faces seven criminal charges for fraud and violating campaign finance violations. He’s pleaded not guilty to all charges. Jury selection begins in Manhattan on Tuesday.

FTX Founder Sam Bankman-Fried leaves from Manhattan Federal Court after court appearance in New York, United States on June 15, 2023.
Fatih Aktas | Anadolu Agency | Getty Images

At a bankruptcy hearing in April 2022, an attorney for FTX said $7.3 billion dollars in cash and liquid crypto assets had been recovered from the exchange. So far, none of the customers interviewed by CNBC have received any of their money back. 
Jake Thacker, an FTX customer in Portland, Oregon, told CNBC he lost hundreds of thousands of dollars shortly after losing his job in the tech industry.
“I’m in quite a big hole right now,” Thacker said. “I’m probably going to have to file for bankruptcy.”

FTX customer, Jake Thacker spoke with CNBC after losing hundreds of thousands of dollars on the exchange.

Thacker told CNBC he “would encourage people to still invest in crypto.” 
“I probably would give them some different advice at this point,” he said. That advice would come with the warning, “Here’s what I learned, don’t make the same mistakes I did.” 
Bhagamshi Kannegundla said he first heard about FTX in an advertisement featuring comedian Larry David that aired during the Super Bowl. 
“I was like, oh my goodness, there’s all these big name people utilizing FTX,” Kannegundla said. “So I was like, OK, hey, I think I’ll be safe using this.”
Less than a year later, Kannegundla was out $174,000, representing around 60% of his crypto portfolio, from FTX’s collapsed.

Bhagamshi Kannegundla, an FTX customer, told CNBC he sold his bankruptcy claim to reinvest in crypto.

“Based on all the other bankruptcies and everything that happened in the crypto market, I was really, really worried about getting anything back, and then how long I would have to wait,” Kannegundla said.
Instead of waiting for the recoveries to eventually be distributed to FTX customers,  Kannegundla went online and found a company that would help him sell his bankruptcy claim for pennies on the dollar to get a little bit of cash more quickly.
Kannegundla said his bankruptcy claim was for $174,000. He received around $19,000 in the sale. 
“The buyer was, after all the due diligence and everything, it went down to like 11% of the $174,000,” he said.
Years later, if the FTX bankruptcy process recovers more than the 11 cents on the dollar for his claim, the buyer pockets the difference. Kannegundla said he will have “zero regrets” if that money gets recovered because he has a different strategy.
“I wanted to get the cash from the bankruptcy claim, primarily to invest in crypto again,” he said. “I felt as if there was a good chance for me to make money in the next five to 10 years.” 
Kannegundla understands that it may be an odd choice.
“People might think I’m crazy for this,” he said. “After going through the FTX and all these other bankruptcies, why would you want to buy any more crypto?” 
He rationalized his decision. 
“When you believe in something as far as technology, you will go through it, you know, it’s kind of like the same person who bought like, let’s say Amazon stock,” he said. 
Another FTX customer, Sunil Kavuri, who has a background in traditional finance, said he moved his digital assets from rival exchange Binance to FTX because he believed it was a safe place for his money. He pointed to the fact that the company raised money from top venture capital firms Sequoia and Paradigm.  
“I thought OK, this is a very safe, institutionally backed exchange,” he said.

Bahamas-based crypto exchange FTX filed for bankruptcy in the U.S. on Nov. 11, 2022, seeking court protection as it looks for a way to return money to users.
Nurphoto | Nurphoto | Getty Images

In an email to CNBC, Kavuri said he hasn’t purchased any crypto since the collapse of FTX because he “wanted to take a break from suffering a massive loss.” Over the last 10 months, he said the majority of his time has been spent fighting “for the rights of all FTX users that lost money due to the FTX bankruptcy.” 
“It hasn’t shaken my faith in the underlying asset itself,” Kavuri said. “I think cryptocurrencies generally, it should be here to stay.”

FTX Customer, Sunil Kavuri spoke with CNBC about his multi-million dollar loss after the exchange filed for bankruptcy.

Across the industry, crypto still has its believers despite the madness of 2022.
Brett Harrison, the former President of FTX’s U.S. business, said he was blindsided by his parent company’s collapse. But he’s doubling down on cryptocurrencies.
Harrison, who left FTX less than two months before its demise, told CNBC he “had no reason to suspect that FTX wasn’t anything other than extremely profitable and in great shape” prior to his departure.

Brett Harrison, the Former President of FTX US left the company less than two months before it’s collapse.

Speaking about his plan to move forward, Harrison said he’s been raising money to start a new company in the space called Architect Financial Technologies. 
“I’d really like to build a technology and a tech-forward brokerage that allows people to trade seamlessly and easily in digital assets and any kind of other tokenized products in addition to other asset classes,” Harrison said. 
Anthony Scaramucci, founder of Skybridge Capital, said he felt like he was late to the game. He didn’t make his first bitcoin investment until October 2020. He later started Skybridge to focus on digital assets. 

Anthony Scaramucci, the founder of Skybridge Capital, spoke with CNBC at his office in New York.

Scaramucci told CNBC he “was building a close relationship with Bankman-Fried” and felt “betrayed and disappointed” when FTX collapsed after making a $10 million dollar investment in the exchange’s FTT token.
He said he still sees “a very strong bull case for Web 3,” referring to broad technologies surrounding crypto and the prospective future of a distributed internet.
“You got to be patient” he said. “If you’re going to go through a period of fraud, and fraudsters and over leverage, you have to see it to the other side.” More

IF GLOBAL WARMING is to be limited, the world must forget about fossil fuels as fast as possible—that much almost everyone agrees upon. How to do so is the complicated part. Economists have long favoured putting a price on carbon, a mechanism that Europe introduced in 2005. Doing so allows the market to identify the cheapest unit of greenhouse gas to cut, and thus society to fight climate change at the lowest possible cost. Others, including many American politicians, worry that such schemes will provoke a backlash by raising consumer costs. Under President Joe Biden, America is instead doling out hundreds of billions of dollars to nurture green supply chains.Yet, remarkably, the rest of the world is now beginning to look more European—with carbon prices spreading in countries both rich and poor. Take Indonesia, the world’s ninth-biggest polluter. Although it releases 620m tonnes of carbon-dioxide equivalent a year, with almost half its soaring energy consumption coming from coal, the country has green ambitions. On September 26th, at the launch of its first carbon market, Joko Widodo, the president, talked up its prospects as a hub for the carbon trade, and local banks duly snapped up credits from a geothermal-energy firm. The country also introduced a local emissions-trading scheme in February, which requires large coal-fired plants to buy permits for emissions above a threshold.image: The EconomistIn short, even in countries better known as polluters than as green leaders, things are shifting. By the start of 2023, 23% of the world’s emissions were covered by a carbon price, according to the World Bank, up from just 5% in 2010 (see chart). The spread will only accelerate over the coming years as more countries come around to the advantages of carbon pricing, and existing schemes expand their reach. On October 1st the EU launched a groundbreaking policy under a dreary name. The “carbon border adjustment mechanism” (CBAM) will, by 2026, start to levy a carbon price on all the bloc’s imports, meaning that European companies will have a strong incentive to push suppliers around the world to go green.The spread of carbon prices is happening in three ways. First, governments are creating new markets and levies. Indonesia is one example. If all goes to plan, its market will eventually be combined with a carbon tax. In April Japan launched a voluntary national market for carbon offsets, which will work alongside an existing regional cap-and-trade policy in place in Tokyo. Participants, accounting for 40% or so of the country’s pollution, will be required to disclose and set emissions targets. Over time the scheme will become stricter, with auctions of carbon allowances for the energy industry due to begin in 2033. Meanwhile, Vietnam is working on an emissions-trading scheme to be established in 2028, in which firms with emissions above a threshold will need to offset them by buying credits.Second, countries with more established markets are beefing up their policies. On September 24th China’s National Climate Strategy Centre announced that its emissions-trading scheme, which is the world’s largest, will move from only focusing on the carbon intensity of coal power plants, to focusing on both their intensity and total emissions. The scheme will be linked with a dormant carbon-credit market, allowing plants to meet their obligations by purchasing credits for renewable power, planting forests or restoring mangroves. Australia, which scrapped its original carbon price in 2014, has reformed a previously toothless scheme known as the “safeguard mechanism”. Since July large industrial facilities that account for 28% of the country’s emissions have had to reduce emissions by 4.9% a year against a baseline. Those that fail must buy carbon offsets, which trade at a price of around $20 a tonne.The final way in which carbon markets are spreading is through cross-border schemes. The EU’s programme is by far the most advanced. In CBAM’s pilot phase importers of aluminium, cement, electricity, fertiliser, hydrogen, iron and steel will need to report “embodied” emissions (those generated through production and transport). Then, from 2026, importers will have to pay a levy equivalent to the difference between the carbon cost of these embodied emissions in the EU’s scheme and any carbon price paid by the exporter in their domestic market. Free permits for sectors will also be phased out, and the housing and transport industries will be brought into the market.Many of these schemes will take time to have an impact. Lots in Asia are flimsy, with prices set too low to produce meaningful change—well below the EU’s current price of €80-90 ($85-95), which is itself only approaching climate economists’ estimate of the social cost of carbon. For instance, half the coal plants covered by China’s emissions-trading scheme face a negative carbon price, meaning that they are in effect paid to burn the dirty fuel, since their emission intensity is below the national average, says Lauri Myllyvirta of the Centre for Research on Energy and Clean Air, a think-tank. The scheme also fails to create an incentive to shift from coal to other sources of power, he notes.Across the world, activists criticise the ability of firms to use offsets to indulge in what they term “greenwashing”, where companies falsely present themselves as environmentally friendly. Some schemes also struggle to prove they have led to emissions reductions. In 2022 a team of academics, led by Andrew Macintosh of Australian National University, argued that reforestation used as carbon credits in Australia’s scheme either did not happen or would have happened irrespective of payments for offsets. An independent review has since recommended changes to how the scheme works.Yet even carbon-pricing programmes that are limited will still help change behaviour, for the simple reason that they encourage the monitoring of emissions. After its launch two years ago, China’s emissions-trading scheme was dogged by fraud, with consultants alleged to have helped firms produce fake coal samples. A crackdown was announced by officials earlier this year, who are now satisfied with the quality of data. Despite the absence of a carbon price, American firms also face incentives to monitor emissions. President Biden has proposed a rule that all businesses selling to the federal government must disclose their emissions and have plans to reduce them. Many large firms have set voluntary net-zero targets as part of their marketing efforts. Apple, the world’s largest, has pledged to make its supply chain entirely carbon neutral by 2030.And manufacturers around the world now face a still greater incentive to accurately track their carbon footprints: CBAM. The EU’s ultimate goal is to tackle “carbon leakage”. Before CBAM’s introduction, Europe’s carbon price meant that domestic industries faced an extra cost compared with those in countries with less ambitious decarbonisation plans. This gave importers an incentive to source material from abroad, even if these inputs were dirtier. To compensate for this, the EU handed out permits to industrial producers. These will now be phased out as CBAM is phased in.During the pilot phase, CBAM simply presents an extra hurdle (what economists call a “non-tariff barrier”) for exporters to the bloc. To comply, European firms must report the embodied emissions of their imports. If such data do not exist, importers must use reference values provided by the EU. In order to nudge foreign companies to change their behaviour and prove that their emissions are lower, these are based on the emissions of the dirtiest firms in the bloc. From 2026 importers will have to pay the difference between the amount embodied emissions would be charged under the EU’s emissions-trading scheme and whatever carbon price the products pay at home.Carbon border tariffs may themselves multiply over the coming years. In Australia the government recently announced a review into the country’s “carbon leakage”, which will examine such an option. In 2021 America and the EU paused a trade dispute, begun by President Donald Trump, by starting negotiations over a “Global Arrangement on Sustainable Steel and Aluminium”. America wants the two trading partners to establish a common external tariff on more polluting steel producers. Since America does not have a domestic carbon price, such a policy would flout the rules of the World Trade Organisation. But if the EU and America do not come to an agreement, the Trump-era tariffs and the EU’s retaliatory measures will be reinstated.There is a domino effect to carbon pricing. Once an industry is subject to a carbon price its businesses will naturally want their competitors to face the same rules. Therefore owners of coal power plants will lobby to ensure that gas power plants operate on a level playing-field. Governments in exporting countries also have an incentive to ensure that their domestic firms pay a carbon price at home rather than a tariff abroad. If Asia’s factories are pressed to reduce their emissions anyway by schemes such as CBAM, then its governments are leaving money on the table by not levying a carbon price of their own.The question is whether the dominoes will fall fast enough. Almost no emissions-trading schemes are aimed at emissions from residential property or cars, for instance, where consumers would really feel the pain. In choosing to introduce carbon-pricing schemes, and then to make them broader and more muscular, policymakers have most economists firmly on their side—and are proceeding much faster than is commonly realised. But future policymakers will need to make such policies even more intrusive if the effects of climate change are to be minimised. For that to happen, they will have to win over voters, too. ■ More

Bill Ackman, Pershing Square Capital Management CEO, speaking at the Delivering Alpha conference in NYC on Sept. 28th, 2023.
Adam Jeffery | CNBC

Billionaire investor Bill Ackman said Friday that U.S. regulators have approved his unique special purpose acquisition company structure, and he’s ready to hunt for a deal.
Investors in Ackman’s unfruitful SPAC, known as Pershing Square Tontine Holdings, got a tradable right to participate in a future deal, and now it’s closer to becoming a reality. The Securities and Exchange Commission greenlit what the Pershing Square CEO has called a SPARC — a special purpose acquisition rights company — in which he will inform investors of the potential acquisition before they pledge funds.

“If your large private growth company wants to go public without the risks and expenses of a typical IPO, with Pershing Square as your anchor shareholder, please call me,” Ackman said in a post on X, formerly known as Twitter. “We promise a quick yes or no.”
Many have said the traditional SPAC structure can be inefficient and costly to shareholders. SPACs are shell corporations listed on a stock exchange with the purpose of acquiring a private company and taking the company public, typically within two years. In Ackman’s SPARC, investors get to opt in if they like the deal and walk away if they don’t.
The SPARC will shortly be distributing special purpose acquisition rights at no cost to former securityholders of Pershing Square Tontine. Ackman had raised $4 billion in the biggest-ever SPAC, but he returned the sum to investors after failing to find a suitable target company to take public.
After a hot period in the pandemic, SPAC investors have turned their backs on speculative high-growth equities with unproven track records after many of these firms failed to meet inflated forecasts. As interest rates stabilize, the market, as well as IPOs, have showed signs of rebound.
Pershing Square said the SPARC will immediately begin to pursue a merger with private, high-quality, growth companies. It is targeting companies who seek to raise a minimum of $1.5 billion of capital, the company said.
Ackman’s Pershing Square funds could commit a minimum of $250 million and up to $3.5 billion as anchor investors in the potential transaction, the company said. More