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Sanctions-hit Huawei says back to ‘business as usual’

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Huawei, a leading supplier of telecom gear, has been hit by US sanctions in recent years over cybersecurity and espionage concerns
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Chinese tech giant Huawei said on Friday it had returned to “business as usual” despite US sanctions as it estimated annual revenues to remain flat for 2022.

A leading supplier of telecom gear, smartphones and other advanced equipment, Huawei was hammered during a crackdown by the administration of previous US president Donald Trump over cybersecurity and espionage concerns.

His successor Joe Biden has added to that pressure with regulations that threaten Huawei’s access to global semiconductor supply chains.

But Huawei’s chairman Eric Xu sounded a positive note in a New Year’s message.

“In 2022, we successfully pulled ourselves out of crisis mode. US restrictions are now our new normal,” he said in the letter.

“We’re back to business as usual.”

The company estimated annual revenue for 2022 at 636.9 billion yuan ($92 billion), up only slightly from the 636.8 billion yuan in 2021.

Huawei has moved to diversify revenue streams after US-led sanctions took a major chunk out of its telecom equipment and smartphone businesses.

Its 5G gear has been blocked in major markets including the United States, Britain and Japan over security concerns. Huawei has denied allegations that its equipment carries risks of sabotage and spying.

And the company — once the world’s top smartphone maker — has seen sales slump after the United States cut off access to key parts and also barred it from using Google’s Android operating system.

Huawei has since moved into the cloud computing sector — with an aim to invest in data centres around the world — and also focused on offering consumer tech such as smartwatches in addition to phones.

The firm has also boosted its footprint in the auto sector as a supplier.

The company did not provide details about its net profit or a breakdown of figures from its various divisions.

Huawei is not publicly listed and its accounts are not subject to the same audits as companies traded on the stock market.

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Sam Bankman-Fried appeals fraud conviction, 25-year jail term

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Fallen crypto wunderkind Sam Bankman-Fried has formally appealed his conviction and sentence
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Fallen cryptocurrency wunderkind Sam Bankman-Fried has appealed his federal conviction and 25-year jail sentence in a sweeping fraud case, according to a legal filing made public Thursday.

News of the appeal comes two weeks after US District Court Judge Lewis Kaplan set the prison term and ordered Bankman-Fried, known as “SBF,” to pay $11 billion in forfeiture.

Bankman-Fried had soared to the top of the crypto world, becoming a billionaire before age 30 and turning FTX, a small start-up he cofounded in 2019, into the world’s second largest exchange platform.

But in November 2022, Bankman-Fried’s breakneck rise came crashing down, with a deluge of customer withdrawals and revelations that billions of dollars had been illegally moved from FTX to Bankman-Fried’s personal hedge fund, Alameda Research.

He was convicted by a federal jury in New York in November 2023 on seven counts of fraud, embezzlement and criminal conspiracy. 

During last month’s sentencing hearing, Bankman-Fried expressed regret about the firm’s demise, which also affected many colleagues.

“It haunts me every day,” he said. “I made a series of bad decisions.”

But the judge said Bankman-Fried had not fully accepted responsibility.

Bankman-Fried said “mistakes were made, but never a word of remorse for the commission of a terrible crime,” said Kaplan, who characterized the violations as “brazen” and called out SBF for his “exceptional flexibility” towards the truth.

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Corporate climate pledge weakened by carbon offsets move

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Critics say offsets give corporations a free pass to keep polluting without cleaning-up their act
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The world’s main benchmark for vetting corporate climate action has been accused by its own staff of “greenwashing” after allowing businesses to use carbon credits to offset pollution from their value chains.

The ruling by the Science-Based Targets Initiative (SBTi) was slammed as a “coup” on Thursday and has sparked a revolt by staff who want the decision reversed and the non-profit’s CEO and board to resign.

Experts say it could irreversibly damage the credibility of the SBTi, which is partnered with the UN Global Compact and WWF, and is the gold standard for assessing the net zero plans of big business.

An internal letter sent to SBTi leadership, and seen by AFP, said the board’s decision was taken without adequate consultation, defied science, and “resulted in significant harm to our organisation’s reputation and viability.

“We stand ready to support any efforts aimed at ensuring that the SBTi does not become a greenwashing platform where decisions are unduly influenced by lobbyists, driven by potential conflicts of interest and poor adherence to existing governance procedures,” read the letter to SBTi’s CEO and Board of Trustees.

“In the event that our concerns are not addressed, SBTi staff will have no choice but to take further action,” it added, without elaborating on what that would mean.

It was signed by staff from “the Target Validation Team, Target Operations Team, the Technical Department, Communications, Impact and IT, and multiple department heads.”

Comment has been sought from SBTi and the We Mean Business Coalition, one of its main partners. 

– ‘Extremely serious’ –

On April 9, SBTi issued a statement rolling back its previous opposition to the use of carbon credits to offset Scope 3 emissions. 

These occur in the value chain, and represents the lion’s share of the carbon footprints — in some cases more than 90 percent — of most companies.

Carbon credits are generated by projects that reduce or avoid emissions — like renewable energy, tree planting and forest protection — and sold to companies wanting to offset pollution from their activities.

But critics say offsets give corporations a free pass to keep polluting without cleaning-up their act, and their usage to make claims of “carbon neutrality” has become increasingly contentious.

Gilles Dufrasne from Carbon Market Watch, who sits on the technical advisory group to SBTi, said allowing their usage by companies represented a “fundamental U-turn on SBTi policy so far”.

“It is pretty much a coup from the board,” he told AFP, adding at least one member of the advisory group had resigned in protest.

“It’s extremely serious, I’ve never seen anything like it.”

Verification by SBTi allows companies to say their climate plans align with science and the goals of the Paris agreement to limit global warming.

More than 4,000 companies and financial institutions have sought to have their net zero claims verified by SBTi, the nonprofit said.

Dufrasne said the decision was “extremely damaging” to corporate climate responsibility because it sent a signal that companies could just pay someone else if they can’t meet their own targets.

“I’m not sure if SBTi’s credibility can survive this,” he said.

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Bitcoin miners face survival test in ‘halving’

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The bitcoin 'halving' happens every four years
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Miners of bitcoin will soon face a halving of the reward for operating the most popular cryptocurrency, in a pivotal event that is a test of survival, industry commentators say.

The halving, held every four years and next due this month, exposes the weakest mining companies and individuals because it slashes their main source of income, according to experts.

Bitcoin is created as a reward when computers solve complex puzzles to decide which miner wins the privilege to validate the block and receive the reward, in a costly process using vast amounts of energy.

That reward has been fixed for the last four years at 6.25 bitcoins per new block, and is expected to drop to 3.125 bitcoins later this month. The new reward will total more than $210,000 according to Wednesday’s price level.

“The block reward halving tends to ‘shake-out’ the weaker mining operations,” Simon Peters, analyst for trading company eToro, told AFP.

“Unfortunately for some, with the lower block reward received it no longer becomes profitable to mine bitcoin and the operation shuts down or gets acquired by a larger rival.”

– ‘Downward spiral’ for some –

Since the last halving in May 2020, the digital unit has enjoyed a record-breaking run.

That streak continued this year propelled by moves toward greater trading accessibility and the looming halving — which is aimed at limiting the number of bitcoin in circulation.

Bitcoin peaked last month at an all-time pinnacle of just over $73,797 and this has partly offset the impending reward shortfall for the mining community.

Yet diminishing returns could stop miners from investing in the latest and quickest computer technology — and they could even pause operations as galloping costs outweigh earnings.

Peters warned this could spell “a downward spiral” for some miners whose activities become uncompetitive.

“Their probability of mining a block reduces due to having less computational resources,” he added.

“If there is a significant drop in the bitcoin price post-halving then lower margins can be greatly exacerbated.”

Bitcoin mining firm Hut 8 Corp announced in March that it would cease operations at its Drumheller facility in Alberta, Canada, partly blaming excessive energy costs.

– Race for performance –

In order to remain competitive, titans of the crypto sector are racing to cut costs, invest in efficient machines and deploy cheaper and greener energy sources to both cool and power their enormous banks of bitcoin-mining computers.

“The big things that we’ve done is we’ve been increasing our fleet efficiency,” said Taylor Monnig, head of mining operations at CleanSpark.

The US firm bought 160,000 new “Bitmain S21” computers which “are currently the most efficient machines available” and will replace older-generation technology, he told AFP.

CleanSpark has also developed a passive cooling system to further reduce its energy bill.

Canadian competitor Bitfarms claims to derive 80 percent of its power from hydroelectricity and plans further expansion.

Hydroelectric energy is “not only green but also sustainable economically in terms of its price”, said Bitfarms chief mining officer Ben Gagnon.

– Consolidation –

High costs have also powered consolidation in the sector, with some mining firms buying stakes in rivals — and even merging like when Hut 8 and Bitcoin Corp combined late last year.

The new group, Hut 8 Corp, has mining operations but has also diversified its income streams to cover fixed costs, selling services to host and operate mining facilities.

Another sector heavyweight, Marathon Digital, has accumulated a war chest totalling $1.5 billion according to its latest accounts, to help fund potential acquisitions that need turning around in order to ramp up capacity.

“We are able to look at opportunities,” Marathon chief growth officer Adam Swick told AFP.

“If there might be sites that are struggling, if there’s a site with an attractive electricity pricing that just has an older generation machines that might not be as efficient… that might be an opportunity for Marathon to come in, buy the site, and upgrade the machines. And then suddenly it’s an attractive site.”

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