Binance said terra was ‘safe’

The world’s biggest crypto exchange promoted terraUSD as a “safe” investment just weeks before the stablecoin and its counterpart luna collapsed in a $40bn wipeout that shook the crypto industry.

Adam Samson and Joshua Oliver have the scoop on how Binance advertised an investment scheme, in which clients lent out their terra to earn a yield of almost 20 per cent, as a “safe and happy” opportunity.

It sent the promotional message on April 6 on its official channel on the Telegram app. It was viewed 117,000 times and provided no disclosures, although a website the advert linked to noted that “cryptocurrency trading is subject to high market risk”. It had also promoted a luna staking scheme as a “safe” investment in 2021.

Binance told the FT it was now “reviewing how campaigns for projects, such as Luna, are evaluated prior to them being advertised”, but the episode highlights the central role crypto exchanges play in choosing which digital tokens are made easily accessible to mainstream traders.

Meanwhile, Elaine Moore has been looking at how non-fungible tokens are crashing. The value of an NFT index developed by cryptocurrency researchers is down 78 per cent from its high point last October. That is a steeper drop than tech stocks and bitcoin.

NFTs are more than a passing fad though, she thinks: “NFTs are really digital contracts, a way to verify ownership of something via permanent record-keeping without the need for a middleman. They could, in theory, be used for anything.”

A brighter future for dealing in crypto though may be futures, according to our Special Report on exchanges, trading and clearing. Recent volatility has pushed trading in crypto futures contracts on the Chicago Mercantile Exchange (CME) to record highs, as professional traders seek to confine their digital asset trading to a highly regulated marketplace.

A crypto strength is the trust that the blockchain offers, and all the signs are that this technology will become deeply embedded in global financial systems.

Eva Szalay reports BNP Paribas has joined JPMorgan in using digital tokens for short-term trading in fixed income markets as some of the world’s biggest investment banks step up efforts to modernise this $12tn market with blockchain.

The French bank has joined a blockchain-powered network run by its US rival, which has already attracted more than $300bn of deals since its launch in December.

The arrangement represents the first steps to use digital tokens in one of the crucial links of the global financial system. The repurchase, or repo, market is used by investors to borrow high-quality assets for a couple of days, and by central banks to conduct their monetary policies.

The Internet of (Five) Things

1. Broadcom in talks to buy VMware
US chipmaker Broadcom is reported to be in talks to buy software company VMware, in a takeover that could generate a huge windfall for its largest shareholder Michael Dell. The deal could be worth more than $50bn and would continue Broadcom’s diversification into software after its failed bid to buy rival chipmaker Qualcomm.

2. China’s chip deficiency
The chief executive of Japan’s JSR, one of the world’s largest suppliers of a material critical for semiconductor production, has said a lack of industry infrastructure will make it “very difficult” for China to develop cutting-edge chipmaking tech, despite its push for self-sufficiency. Eric Johnson said China would struggle to master extreme ultraviolet or EUV lithography.

3. Didi shareholders vote to delist
Chinese ride-hailing group Didi has notified the New York Stock Exchange it will move to delist in the US after 95 per cent of shareholders voted on Monday in favour of the plan designed to get the company’s services back on Chinese app stores.

4. Atos in stormy challenge to Microsoft contract award
The UK government faces trial in the High Court next month over its award of an £854mn contract for a new Meteorological Office IT system expected to be the world’s most advanced supercomputer dedicated to weather prediction and climate change. A lawsuit has been brought by Atos, the IT services group which lost out on the contract awarded by the government to Microsoft in 2021.

5. Fintech in a funk
Venture capital is cooling across the fintech board: funding this quarter is expected to raise about $21bn, according to CBInsights, down from $37bn a year ago and $29bn in the previous quarter. Meanwhile, Sweden’s Klarna is reportedly raising funds at a lower valuation than last time. Lex explains fintech’s fading investor appeal.

Tech week ahead

Monday: Video conferencing platform Zoom’s revenues are expected to have risen more than 12 per cent from a year earlier to $1.07bn in its first quarter, when it reports after the closing bell. But its post-pandemic profits are forecast to have dropped almost 40 per cent to $137.9mn.

Tuesday: Ecommerce logistics supplier Delhivery will IPO in India. China’s NetEase and Kuaishou report earnings. The Computex tech trade show begins in Taipei, with industry heavyweights from Intel, Advanced Micro Devices, Micron and Super Micro invited to events and forums during the four-day hybrid expo.

Wednesday: Graphics chipmaker Nvidia and cloud company Snowflake have quarterly results.

Thursday: China’s Alibaba, Baidu and Lenovo report earnings. Dell, VMware, Autodesk and Workday report in the US.

Friday: Chinese online shopping app Pinduoduo reports earnings.

Tech tools — AI video conferencing

Zoom, which reports earnings today, has come under fire from human rights groups for working on artificial intelligence that can interpret the moods and emotions of users of its video conferencing software. Google announced some less controversial AI improvements to its Meet software at its recent I/O conference. Portrait restore improves video quality in a dimly lit room, portrait light uses machine learning to simulate studio-quality lighting in your video feed, de-reverberation filters out echoes in spaces with hard surfaces, and automated transcripts of meetings will be introduced later this year.