10 THINGS BEFORE THE OPENING BELL

Well, well, well, if it isn't another day talking about fake money. Senior reporter Phil Rosen here — I don't mean to insinuate that all crypto is fake, but the funds that the now-defunct crypto exchange FTX was doling out have turned out to be either made of air or steeped in fraud.

In seeking to spread his influence far and wide, Sam Bankman-Fried disbursed vast sums of cash that went into the coffers of politicians, media outlets, and other digital asset companies.

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1. Here's what Bankman-Fried seemed to be aiming at: Stash money with all the right people, while lobbying for policy favorable to FTX.

As CoinDesk reported this week, 37% of Congress took money from Bankman-Fried and other FTX executives. House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer were among the 196 senators and representatives that received funds.

Other lawmakers included some who were just sworn into congressional ranks this month, which points to Bankman-Fried possibly seeking to hold sway over new members.

Since learning that the cash came from a potentially fraudulent source, many of those politicians have moved to get rid of what they received. Of the 53 campaigns that spoke on the record, 64% said they would forward the donated funds to nonprofit causes, according to CoinDesk.

Keep in mind, the new FTX bosses, led by John Ray III, had this to say in December:

"Making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery."

It remains to be seen whether the political contributions will be subject to clawbacks. The new execs say that if the cash was stolen, then funds can't be freely doled out as donations.

On the media side, Bankman-Fried reportedly poured in a $10 million investment into the splashy news startup Semafor, and also sent a $5 million grant to investigative nonprofit ProPublica. Both outlets said they plan to return the money.

Even as Bankman-Fried maintains that FTX US remains solvent and has the ability to make investors whole again, the company has said it doesn't have the funds to pay back those who lost their money.

Not only that, but the new bosses said Wednesday that the exchange lost $415 million from hacks, which accounts for less than 10% of the assets that FTX is still trying to locate.

The whole saga has weighed on broader market sentiment and token prices.

William Quigley, the co-founder of stablecoin Tether, one of the world's most traded tokens, expects crypto markets this year to be more stable than 2022, but the fraud and scams of recent months means enthusiasm will be more muted.

"We basically erased all the gains made in 2021," Quigley told me. "I was surprised at the layers of leverage that creeped into every single corner of crypto, beginning with exchanges that had no reason to lever."

To be sure, the rest of the digital asset sector is staying just as busy as FTX:

Coinbase is shutting down its service for customers in Japan
Genesis is on the verge of bankruptcy and could file as soon as this week
The Justice Department just shut down a tiny crypto exchange called Bitzlato

How likely is it that you invest in crypto this year?

A) No way

B) I may invest depending on developments in the market

C) I am definitely investing in crypto this year

Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know.

In other news:

2. US stock futures fall early Thursday, as fears of a global recession mount. The major benchmarks tumbled Wednesday after December retail data showed sales fell by the most in a year. Here are the latest market moves.

3. On the docket: Netflix, Intuit Inc., and Northern Trust, all reporting.

4. Goldman Sachs named 27 stocks that have the highest expected returns on equity for the next 12 months. The gains could be up to 49%, according to the firm's strategists. Here are their top picks as the economy enters a recessionary environment.

5. The tech sector is seeing "the clock strike midnight" as Microsoft announces layoffs. Top analyst Dan Ives said Wednesday that the hyper-growth era is coming to an end, and the "rip the band-aid off" moment is here to preserve margins and slash costs as the economy slows down.

6. Larry Summers is warming up to the idea that the Federal Reserve can stick a soft landing this year. The former Treasury secretary told Bloomberg that the economy could ultimately avoid a recession, which is the opposite of what he said previously. Get the full details.

7. Charles Schwab warned that a major shark attack is coming for stocks. Markets are in for a shakeup and investors who aren't paying close attention risk getting bitten, according to the firm's Jeffrey Kleintop. In his view, it's time to recognize that a new market cycle has started.

8. Behavioral investing expert Phil Toews still sees upside for stocks and bonds. But there's still a potential for a bigger, longer downturn ahead. He explained why he's being cautious today and what investors should do next.

9. This investor built a 742-unit real-estate portfolio after starting with $5,000. He just warned that a coming housing correction will be the next buying opportunity. Here's the financing method he's using to snag 2% interest rates.

10. Goldman Sachs stock has taken a beating this week. Following a brutal fourth quarter, chief executive David Solomon admitted that the Wall Street giant expanded too quickly into consumer banking. "In the consumer platforms, we did some things right," he said. "We didn't execute on some others."

Curated by Phil Rosen in Los Angeles. Feedback or tips? Tweet @philrosenn or email prosen@insider.com

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.