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Japan proposes guidelines to legalize ICOs

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Digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin.

Chesnot | Getty Images

Digital cryptocurrencies, Bitcoin, Ripple, Ethernum, Dash, Monero and Litecoin.

Japan unveiled proposed guidelines for the legalization of a controversial means of raising money in the cryptocurrency space.

A government-backed research group has put forward rules that would see initial coin offerings (ICOs) given regulatory definition and approval. An ICO is a means of raising capital by issuing and selling new crypto tokens in exchange for cryptocurrencies like bitcoin and ethereum.

Proposed guidelines include identifying investors to prevent money laundering, protecting existing shareholders and debt holders, restricting unfair trade practices like insider trading and ramping up cybersecurity efforts.

The proposals come as China and South Korea toughen up on cryptocurrencies with their own regulations to rein in speculation in the nascent market. Last year, both countries banned ICOs due to concerns of illegal activity and speculative investing in the space.

Japan was host to a cryptocurrency heist that saw more than $500 million worth of digital tokens stolen earlier this year. Coincheck, the virtual exchange hit by the cyberattack, said it would refund customers following the theft. It is thought to be the biggest theft of cryptocurrencies, surpassing the $400 million in bitcoin lost by cryptocurrency exchange Mt. Gox in 2014.

The collapse of Mt. Gox was seen as a test for bitcoin, which roared to a record high near $20,000 last year but has pulled back significantly since.

On Monday, the U.S. Securities and Exchange Commission (SEC) charged two founders of a cryptocurrency company that was endorsed by boxer Floyd Mayweather with carrying out a fraudulent ICO. The SEC has increased regulatory scrutiny of ICOs over concerns of fraudulent behavior associated with the practice.

Meanwhile, messaging service Telegram is holding what is thought to be the largest ever ICO. Telegram, which secures messages via end-to-end encryption, is itself used by many cryptocurrency investors as a means of communication. The firm is looking to raise $2 billion from the fund raise.

A CNBC investigation last month revealed that more than 1,000 investors were swindled by an ICO project called Giza. The people behind the project made more than $2 million from the scam.

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WarnerMedia-Discovery deal pressures ViacomCBS and NBCUniversal

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Shari Redstone, chairwoman of ViacomCBS and president of National Amusements, reacts as she celebrates her company’s merger at the Nasdaq Market site in New York, December 5, 2019.

Brendan McDermid | Reuters

In the words of the great Tom Lehrer, “Who’s Next?

Now that AT&T has decided to separate WarnerMedia and merge with Discovery, the rest of the media world — particularly the smaller players — face new pressure to make their countermoves.

Even before this deal, it was clear that Lionsgate, MGM, Sony Pictures and AMC Networks were probably too small to compete in a streaming world where success depends on a massive store of content and global reach.

But ViacomCBS and Comcast‘s NBCUniversal are much bigger, and probably assumed they had some time — at least a year — to see how many subscribers signed up for their streaming offerings, Paramount+ and Peacock.

“Within the next two years, it’s going to be put up or shut up for all of us,” said David Zaslav, Discovery’s CEO who will take the top job at the combined company, in December. “Can you show you’re scaling? Are you going to be a player in the U.S.? Are you going to be a player around the world?”

Under pressure

That timeline is shorter now.

Suddenly, both ViacomCBS and NBCUniversal seem subscale as they attempt to put together global streaming services. They aren’t trying to be niche players, such as Starz or AMC+.

That means both will need more content to compete against Netflix, Amazon Prime Video, Disney and whatever the new name of WarnerMediaDiscovery will be.

The obvious move would be for ViacomCBS and NBCUniversal to merge. But a combined ViacomCBS/NBCUniversal would have two U.S. broadcast networks — CBS and NBC — housed under the same corporate roof. That won’t fly with U.S. regulators. While the parent companies could theoretically spin out or sell them, the broadcast networks provide so much value to both companies — and their streaming services — that it seems unlikely.

Further, Shari Redstone controls ViacomCBS and Brian Roberts controls NBCUniversal through his family’s Comcast shares. Their dual class share structure is another obstacle for both companies, as it makes it hard for outsiders to pressure the companies to make changes the executives don’t favor. But it’s not a deal stopper — Discovery had several classes of shares too, but John Malone was willing to eliminate his voting shares to get a deal done with WarnerMedia.

Four options

That leaves Comcast and ViacomCBS with four likely options.

Buy. If both companies feel their streaming services can compete around the world, they can go on global and domestic acquisition sprees. It may take several deals to get to a scaled position, as they piece together smaller U.S.-based assets and larger global media companies in Latin America and Europe.

Sell. They could also sell. Shari Redstone is more open to the idea of selling ViacomCBS than her father, according to people familiar with the matter. It’s unclear if Roberts would consider selling NBCUniversal. Potential buyers could include Amazon or the newly merged WarnerMedia-Discovery. Apple and Netflix continue to hover along the periphery, but neither company has ever shown much interest in making big media acquisitions.

Reduce their ambitions. The third option is to throw in the towel on being a global streaming service. Instead, NBCUniversal and ViacomCBS could license their content to other, larger streamers and wind down Paramount+ and Peacock if they fail to gain global traction.

Bundle. Option four is similar but less drastic. ViacomCBS and NBCUniversal could begin bundling their streaming services together or finding new streaming partners to increase global distribution through discounted offerings. The main problem with this strategy is it limits the upside for both companies, who won’t be able to compete with larger players for top content and breadth of programming.

The fifth option — inaction — is no longer a viable strategy. The pressure is on Roberts, NBCUniversal CEO Jeff Shell, Redstone and ViacomCBS CEO Bob Bakish to find exciting go-forward solutions for their companies.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

WATCH: What the WarnerMedia-Discovery deal could mean for the streaming wars

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Bob Baffert, trainer of Kentucky Derby winner Medina Spirit, suspended from entering Belmont Stakes

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Bob Baffert the trainer of Medina Spirit talks to the media during the training for the Kentucky Derby at Churchill Downs on April 29, 2021 in Louisville, Kentucky.

Andy Lyons | Getty Images

Horse trainer Bob Baffert was temporarily suspended Monday by New York racing officials from entering horses — including Kentucky Derby winner Medina Spirit — in the upcoming Belmont Stakes or races at other major state tracks as a result of Medina Spirit’s positive test for a banned drug after its Derby victory.

The suspension applies to any Baffert-trained horses at Belmont Park, Saratoga Race Course and Aqueduct Racetrack, the three major thoroughbred racing venues in New York.

The New York Racing Association said that its decision to bar Baffert’s horses, for now, took into account not only the probe into Medina Spirit’s Derby win, but also “the fact that other horses trained by Mr. Baffert have failed drug tests in the recent past, resulting in the assessment of penalties against him by thoroughbred racing regulators in Kentucky, California, and Arkansas.”

John Velazquez guides Medina Spirit to win the 147th running of the Kentucky Derby at Churchill Downs.

Jamie Rhodes | USA TODAY Sports | Reuters

New York Racing Association CEO Dave O’Rourke said, “In order to maintain a successful thoroughbred racing industry in New York, NYRA must protect the integrity of the sport for our fans, the betting public and racing participants.”

“That responsibility demands the action taken today in the best interests of thoroughbred racing,” O’Rourke said.

Medina Spirit on Saturday finished third in the Preakness Stakes behind the winner Rombauer, and Midnight Bourbon, which finished second.

If a second test sample confirms that positive result, Medina Spirit will be stripped of the Derby win.

This is breaking news. Please check back for updates.

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Biden to speak to Netanyahu

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President Joe Biden with Vice President Kamala Harris (R) delivers remarks on the COVID-19 response and the vaccination program in the East Room at the White House in Washington, DC on May 17, 2021.

Nicholas Kamm | AFP | Getty Images

WASHINGTON – President Joe Biden said Monday that he will speak to Israeli Prime Minister Benjamin Netanyahu as fighting between Israel and Hamas enters its second week with no clear end in sight.

Biden said that he would have more to say about the unfolding violence after speaking with Netanyahu.

On Sunday, a group of 28 Democratic senators called for an immediate stop to the ongoing fighting in the Gaza Strip, where casualties are mounting and the international community is growing increasingly concerned about the destruction from Israeli airstrikes.

“To prevent any further loss of civilian life and to prevent further escalation of conflict in Israel and the Palestinian territories, we urge an immediate ceasefire,” the senators wrote.

The statement’s signatories include Sens. Cory Booker of New Jersey, Tammy Duckworth of Illinois, Dick Durbin of Illinois, Tim Kaine of Virginia, Angus King of Maine, Amy Klobuchar of Minnesota, Bernie Sanders of Vermont, Mark Warner of Virginia and Elizabeth Warren of Massachusetts. King and Sanders are independents who caucus with Democrats.

Palestinians gather at the site of destroyed houses in the aftermath of Israeli air and artillery strikes as cross-border violence between the Israeli military and Palestinian militants continues, in the northern Gaza Strip May 14, 2021.

Mohammed Salem | Reuters

United Nations Secretary-General Antonio Guterres on Sunday called the violent conflict “utterly appalling” and urged an immediate ceasefire.

“This latest round of violence only perpetuates the cycles of death, destruction and despair, and pushes farther to the horizon any hopes of coexistence and peace,” Guterres said during a U.N. Security Council meeting.

“Fighting must stop. It must stop immediately. Rockets and mortars on one side and aerial and artillery bombardments on the other must stop,” he added.

Violence intensified over the weekend after Israel conducted an airstrike that leveled a high-rise building in the Gaza Strip. The strike, the deadliest yet in the ongoing conflict, killed at least 42 people. Meanwhile, more than 3,000 rockets bombarded Israeli cities.

A ball of fire erupts from the Jala Tower as it is destroyed in an Israeli airstrike in Gaza city controlled by the Palestinian Hamas movement, on May 15, 2021.

Mahmud Hams | AFP | Getty Images

On Sunday, Netanyahu defended the punishing airstrike that collapsed a 12-story building, citing intelligence that Hamas was using a portion of the building to plan terror attacks.

“Here’s the intelligence we had,” Netanyahu told CBS Sunday program “Face the Nation.”

“[It’s] an intelligence office for the Palestinian terrorist organization housed in that building that plots and organizes the terror attacks against Israeli civilians. So, it’s a perfectly legitimate target,” he explained.

White House Press Secretary Jen Psaki would not confirm whether the Biden administration agreed with Israeli intelligence assessments. She instead reiterated calls for a de-escalation in violence.

“The role we are playing, is how can we help bring an end to the violence, and our calculation at this point is having those conversations behind the scenes,” Psaki said Monday. “Our approach is quiet, intensive diplomacy,” she added.

Over the weekend, President Joe Biden spoke separately to Netanyahu and Palestinian Authority President Mahmoud Abbas.

Biden raised concerns over the fierce fighting and the safety of civilians and journalists. He also underscored his commitment to a negotiated two-state solution as “the best path to reach a just and lasting resolution of the Israeli-Palestinian conflict,” according to a readout.

Secretary of State Antony Blinken told reporters on Monday that officials across the administration are “working around the clock” to bring an end to the violence. Blinken added that U.S. envoy Hady Amr, deputy assistant secretary of State for Israel and Palestinian affairs, was on the ground in the region.

CNBC’s Christina Wilkie contributed to this report.

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