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Tory MPs Split Over the Prospect of Boris Johnson’s Return




Conservative MPs were on Friday deeply divided by the prospect of Boris Johnson returning as party leader and UK prime minister — just three months after he quit following a string of scandals.

Contenders to replace Liz Truss, who dramatically resigned on Thursday after only six weeks in power, were racing to secure the required support of 100 MPs to stand in the contest.

House of Commons leader Penny Mordaunt on Friday announced that she was standing for the Conservative leadership — the first Tory MP to do so. Former chancellor Rishi Sunak is also expected to stand.

Gilts and sterling came under renewed pressure on Friday, with some analysts linking the moves to concern about the idea of Johnson returning to Downing Street.

The 10-year gilt yield rose by 0.22 percentage points to 4.13 per cent, reflecting a fall in price. The pound was 1.4 per cent lower at $1.1082.

The emergence of Johnson as a frontrunner had choked off any relief for sterling after the departure of Truss, said Jane Foley, head of currency strategy at Rabobank.

“The UK is facing a whole line-up of weak fundamentals, and earlier this year one of those was a lack of leadership from a government very distracted by one scandal after another,” Foley said.

“That was the Boris Johnson government for investors, and the chance that that could come back is not going to be welcomed by markets. You would hope he is experienced enough to read the room and stick with [chancellor Jeremy] Hunt’s plans, but until we know that, there’s going to be real nervousness.”

The former prime minister is still popular with grassroots Tory members, but there is no guarantee that he will reach the tally of 100 MPs needed to get on the ballot. He is thought likely to cut short a family holiday in the Caribbean to decide on a potential comeback.

MPs supporting Johnson, led by trade minister Sir James Duddridge, have been quick out of the blocks in an attempt to build momentum.

Tom Pursglove, MP for Corby, said: “Voters had their say in 2019, Boris Johnson won an overwhelming mandate . . . many of our supporters felt let down when he was removed and will arguably feel cheated again if he isn’t on the ballot.”

Many Tory MPs are horrified at the idea of Johnson coming back so quickly after scores of ministers resigned in July to force him out of power.

Sir Roger Gale, a veteran MP, told Times Radio that he would quit if Johnson returned. He also pointed out that the Commons privileges committee had not yet concluded its investigation into whether Johnson lied to parliament about parties in 10 Downing Street during Covid lockdowns. “Until that investigation is complete there should be no possibility of him returning to government.”

John Baron, another long-serving Tory MP, said he would find it “impossible” to serve under another Johnson administration.

Supporters of Sunak said that he would be the right prime minister to restore the Tory party’s economic credibility after weeks of turmoil in the financial markets triggered by Truss’s catastrophic “mini” Budget in late September.

Dominic Raab, former deputy prime minister, called on colleagues to back Sunak. “He has the plan and credibility to restore financial stability, help get inflation down and deliver sustainable tax cuts over time,” he said.

Allies of Johnson have privately approached Sunak to join forces, despite the latter having been one of the ministers who forced him out. But Sunak’s supporters argue that he can win on his own without cutting a deal with either Johnson or Mordaunt.

Meanwhile, a poll by People Polling put the Conservative party at its lowest-ever support since modern polling began, at 14 per cent against Labour’s 53 per cent.

The contest to become Britain’s fourth prime minister in four years has been accelerated to take only a week. Under the new rules, no more than three candidates will be able to reach the first ballot on Monday afternoon, with the final two put to an online vote of party members for a result by next Friday.

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Iceland Introduces ‘turkey Promise’ to Ensure Shoppers Get ‘low Price’ Meat




Iceland has frozen the price of its festive fowl.

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Bankman-Fried Empire Includes Billions of Dollars of Illiquid Investments





Sam Bankman-Fried’s business empire includes billions of dollars of illiquid venture capital investments, according to internal records seen by the Financial Times, underscoring the uncertain recovery facing customers of his collapsed FTX exchange.

The 30-year-old entrepreneur, once a star of the crypto industry, on Friday placed FTX international, its independent US arm, and his proprietary trading firm Alameda Research into a joint bankruptcy process in Delaware federal court.

Initial filings listed both assets and liabilities of the group at between $10bn and $50bn. FTX’s new chief executive John Ray, who was brought in to chair Enron during its liquidation, said the companies had “valuable assets” and that the bankruptcy would maximise recoveries.

The sprawling venture capital portfolio will add to the complexity of the insolvency proceedings, which itself includes more than 130 companies controlled by Bankman-Fried. FTX’s collapse is among the most dramatic failures in the crypto industry not just this year, but since the creation of bitcoin more than a decade ago.

FTX and its affiliates have not yet disclosed the exact size of their liabilities and assets, and the shortfall that likely exists. FTX’s recently departed head of institutional sales, Zane Tackett, said on Twitter on Friday that the shortfall ran into billions of dollars. FTX did not immediately respond to a request for comment.

Any gap between assets and liabilities will be influenced by the value that can be recovered from almost $5.4bn that FTX and Alameda invested in almost 500 crypto companies and venture capital funds, according to the records seen by the FT.

The largest of those investments is $1.15bn that Alameda ploughed into crypto mining group Genesis Digital Assets between August 2021 and April 2022, the records show.

Publicly traded mining companies have sold off sharply over the past year as the crypto market has declined. The HashRate crypto mining index, which tracks such stocks, is down 75 per cent since August 2021. Genesis did not immediately respond to a request for comment.

The records also list more than $1bn invested across about 40 funds run by venture capital firms, including some that were investors in FTX such as Sequoia Capital. Those holdings include a $300mn investment by Alameda in K5 Global, the firm run by Michael Kives. The investment amounts to 30 per cent of K5’s general partnership, and $225mn of the total sits in Elon Musk’s SpaceX and Boring Company, and other unidentified businesses, according to the records.

Earlier this year, texts released during Musk’s litigation with Twitter showed Kives suggesting Bankman-Fried as a co-investor in the social media company. Musk was dismissive of the FTX founder and ultimately took money from the head of rival exchange Binance, Changpeng Zhao.

Other big bets detailed in the records include a $500mn investment in Anthropic, an artificial intelligence “safety and research company”, made by Bankman-Fried through Alameda earlier this year. Anthropic did not immediately respond to a request for comment.

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Sam Bankman-Fried’s $32bn FTX Crypto Empire Files for Bankruptcy





FTX, the once high-flying crypto currency group, has filed for bankruptcy protection in the US, marking a stunning collapse of the $32bn empire built by the colourful 30-year-old entrepreneur Sam Bankman-Fried.

The filing in Delaware federal court on Friday included the main FTX international exchange, a US crypto marketplace, Bankman-Fried’s proprietary trading group Alameda Research and about 130 affiliated companies.

FTX’s failure came after Bankman-Fried desperately sought billions of dollars to save the exchange this week after it was unable to meet a torrent of customer withdrawals in a run prompted by concerns over its financial health and links to Alameda.

The collapse of such a prominent group, which advertised during the US Superbowl and whose shorts-wearing, charismatic founder was a leading donor to the Democratic party, has rocked the notoriously volatile crypto industry.

Bitcoin dropped 5 per cent to a fresh two-year low of $16,492 after the FTX bankruptcy was announced. Changpeng Zhao, chief executive of Binance, earlier on Friday said the fall of FTX left crypto facing a financial crisis akin to 2008 and that more businesses could fail in its wake.

Bankman-Fried, who one week ago was among the most respected figures in the sector with a $24bn personal fortune and close links with Wall Street and celebrities, resigned as FTX’s chief executive on Friday. John R Ray, a restructuring specialist who oversaw the Enron and Nortel Networks bankruptcy cases, will take the reins.

“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process,” Ray said.

In just over three years, FTX had secured a $32bn valuation and had wooed a roster of blue-chip investors, including Paradigm, SoftBank, Sequoia Capital and Singapore’s Temasek. Venture capital firms Sequoia and Paradigm have in recent days marked their investment down to zero.

The sprawling business empire run by a tight-knit group of longtime associates around Bankman-Fried, many of whom lived together in a Nassau penthouse in the Bahamas, has around 100,000 creditors and $10-50bn of assets and liabilities, according to the filing.

The US Securities and Exchange Commission is investigating FTX, which includes examining the platform’s cryptocurrency lending products and the management of customer funds, according to a person familiar with the matter.

The bankruptcy filing follows a frantic week in digital asset markets. Rumours about the financial health of FTX and its trading affiliate Alameda Research culminated on Monday in a run on the exchange with insufficient readily accessible assets to meet $5bn in customer withdrawals.

After appeals to its investors and rival exchanges, FTX halted the demands on Tuesday and agreed a rescue by the world’s largest crypto bourse, Binance, led by Zhao, a one-time partner turned arch-rival of Bankman-Fried.

That deal fell through a day later after Binance said due diligence revealed insurmountable financial problems at FTX. Last-ditch efforts to find another investor to supply up to $8bn failed in recent days.

FTX Digital Markets Ltd, the group’s subsidiary in the Bahamas, where it is headquartered, is not included in the bankruptcy proceedings. The Securities Commission of The Bahamas froze the subsidiary’s assets on Thursday and appointed a provisional liquidator.

LedgerX, a regulated US futures exchange, and a subsidiary in Australia are among other units not included in the filing. The group’s Australian business has already been placed into administration while Japanese watchdogs suspended operations of FTX’s affiliate in the country.

Bankman-Fried has blamed mistaken accounting of the exchange’s liquidity and leverage for the collapse.

“I’m really sorry, again, that we ended up here,” he said following Friday’s filing. “I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week.”

Additional reporting by Stefania Palma in Washington

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