Business

➚ BUY: Fast fashion. H&M shares are up 17% this morning after the retailer posted strong earnings and said warmer weather in Europe helped sell its summer collection. And TikTok is getting into the retail game, our colleague Louise Matsakis scoops.

➘ SELL: Fast money. Banks are relying heavily on brokered deposits, which are funneled through another bank or third party like MaxMyInterest and are flightier than funds parked by existing customers. Bad timing for a shaky deposit base.

The portion of Japanese regional banks’ capital that Bank of Japan Governor Kazuo Ueda, speaking on a panel yesterday, said could be lost as interest rates eat into loan portfolios — a “non negligible” problem that springs from the same dynamics that hit mid-sized U.S. banks this spring.

Where is CZ?

THE SCOOP

Billionaire Binance founder Changpeng Zhao has been bunkered down in Dubai as French prosecutors investigate the world’s largest crypto exchange for alleged money laundering, according to several colleagues who have been in touch with him.

Zhao, commonly known as CZ, had traditionally split his time between Dubai, Paris, and other global cities including in Southeast Asia, but he has avoided traveling to France since the investigation was reported by French media about two weeks ago. In the U.S., the Securities and Exchange Commission has sued Binance and CZ, accusing them of misleading investors and diverting customer funds.

The U.S. and the United Arab Emirates do not have an extradition treaty, but France and the UAE have had an agreement since 2007. Dubai has ramped up enforcement of extradition pacts following a downgrade from global watchdog Financial Action Task Force last year.

A Binance spokesperson disputed the characterization, saying CZ has a home in France that he uses frequently and that he is still traveling for business. The exchange also said “we abide by all laws in France, just as we do in every other market.”

The company does not claim a set location for its headquarters, with CZ claiming in the past that the firm is based wherever he is at any moment.

BRADLEY’S VIEW

France turning from friend to foe hurts the billionaire more than the probe in the U.S., where he had been viewed as the Darth Vader to Sam Bankman-Fried’s Luke Skywalker, before the latter’s legal troubles (Bankman-Fried is no longer an investor in Semafor). France accepted CZ and Binance as the company that would turn Paris into a crypto hotspot. He personally spent a lot of time in the city, several people close to him say, making it as much his home as Dubai.

Now, he’s staying put in the Gulf and needs to stay on the right side of the ruling family in the UAE, who will be happy to have someone bringing crypto industry conferences and high-profile executives to town, as CZ already has.

To read the Room for Disagreement and the rest of the story, click here.

Join us on July 11 to hear Jared Bernstein, chair of the White House Council of Economic Advisers, Airbnb CFO Dave Stephenson, AFL-CIO President Liz Shuler, and others debate quiet quitting, AI in the workplace, remote work, and more with our partners at Gallup. Register here to attend the Washington event in person or listen remotely.

This one’s going to sting: Goldman Sachs has lost the M&A crown for the first time in five years. JPMorgan edged past it, advising on $298 billion worth of deals during the first half of the year, according to Refinitiv data.

“A woman’s gotta do what a woman’s gotta do.”

— European Central Bank President Christine Lagarde, speaking Wednesday on a panel in Portugal, on painful but necessary rate hikes.

Perella Weinberg, working for the FTX bankruptcy estate, has halted its efforts to sell FTX’s giant stake in AI startup Anthropic. Semafor earlier this month first reported the sales process of the stake, which is likely FTX’s most valuable asset, adding that bankers were wary of leaving money on the table by dumping a hot asset whose value is quickly rising. (They already did that once.)

• U.S. Federal Trade Commission Chair Lina Khan is readying another antitrust case — that’s four this year — against Amazon, Bloomberg reports, accusing it of using its power to pressure merchants to use its add-on services like warehousing and advertising.
  
  To review, the agency has already accused the company of spying through its Alexa device and Ring doorbells, and of making it hard for Prime customers to cancel. It is also weighing whether to challenge the company’s acquisition of the maker of Roomba vacuums.
• The U.S. Securities and Exchange Commission charged three men with insider trading tied to the SPAC deal that took former President Donald Trump’s social media company public. The regulator alleges the trio made $23 million when they bought shares of Digital World Acquisition Corp., knowing of the impending deal, and dumped them right after it was announced. The stock soared almost 900% when the deal was struck in October 2021, but has given back nearly all of its gains.

• What a Chinese heat wave means for the world.
• OpenAI is training AI models on Microsoft’s cloud services, Reed Albergotti scooped. The cloud computing industry is expected to grow north of $2 trillion by 2030 and the fight for market share is intensifying.
• Prigozhin may have colluded with other Russian officials before his failed coup. Read our curated analysis from experts.