Russias invasion of Ukraine triggered an energy crisis thats unfolded across Europe. 

Before the war, the European Union relied on Russia for 40% of its natural gas and close to 30% of its crude oil. Since Russia cut off the continents energy supply, European officials have scrambled to find alternativesone being coal. 

However, how much coal was being used was unclear until now. 

It turns out that global coal use will rise 1.2% this year, according to the International Energy Agencys new report. That equates to a record annual use of 8.025 billion tons, eclipsing the previous high of 7.997 billion tons in 2013.

Russias invasion of Ukraine has sharply altered the dynamics of coal trade, price levels, and supply and demand patterns in 2022, the report said. 

With that, both fossil fuel and natural gas prices have risen substantially this year, which has pushed some countries to shift from gas and toward coal. 

The European Union has been one of the regions hardest hit by the energy crisis, and some coal plants that had previously been shut down were brought back on line. Germanys reversal has been particularly significant, helping to increase the entire European Unions power generation from coal. 

Still, China and India, which rely heavily on coal for electricity, are the worlds largest coal producers and consumers.

As for Europe, its growing reliance on coal is likely temporary and could come down as soon as 2024, the IEA said. 

Coal demand is stubborn and will likely reach an all-time high this year, pushing up global emissions, Keisuke Sadamori, the IEAs director of energy markets and security, said. At the same time, there are many signs that todays crisis is accelerating the deployment of renewables, energy efficiency and heat pumps and this will moderate coal demand in the coming years. Government policies will be key to ensuring a secure and sustainable path forward.

Global demand for coal will plateau within three years, the report predicts. But that largely depends on China because it accounts for more than half of global coal consumption. Demand for coal in China surged over the summer with the countrys heat waves that increased the need for air conditioningand in turn, electricity. But at the same time, prolonged COVID lockdowns decreased demand. 

But like many countries, China is moving toward more renewable energy, which could reduce demand for coal in the long run. By 2025, renewable energy will fill nearly 90% of electricity demand globally, the report predicts.

Nonetheless, higher coal prices, strong deployment of renewables and energy efficiency, and weakening global economic growth are tempering the increase in overall coal demand this year, the report said. 

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The worlds biggest hedge fund is sounding the alarm about the potential for a protracted multi-year recession.

Bridgewater Associates co-chief investment officer, Greg Jensen, warned this week that during periods of high inflation like what the U.S. economy is experiencing today, recessions tend to last longerunless central banks slash interest rates quickly.

And Federal Reserve Chair Jerome Powell made it clear this week that rate cuts arent in the cards.

Wed expect kind of double the normal length of a recession because the Feds not going to be at your back for a long time and thats a big deal, Jensen told Bloomberg on Friday. 

The Bridgewater co-CIO said that the good news is that there is far less leverage in the financial system compared to the period before the Great Recession of 2008, which he believes will prevent a cascading effect in markets that causes a deep recession.

Instead, you have this long grind thats probably a couple years, he said. 

Jensen expects inflation will come down next year as a recession hits, but he argued that there will be a mixed bag of good and bad inflation reports that could weigh on stocks.

Not everyone on Wall Street agrees. Economists at Bank of America cut their inflation forecast for next year to just 2.8% on Friday, citing a sharp drop in goods prices. And Goldman Sachs is expecting just 2.7% inflation by the end of 2023.

But it may be wise to listen to Bridgewaters co-CIO.

Jensenwho worked his way up the ranks at Bridgewater for 26 years under the tutelage of the funds billionaire founder, Ray Daliowas one of the few CIOs on Wall Street to spot the rise of inflation in 2021. 

Before the carnage that markets experienced this year, he warned that inflation would be a persistent issue and things would be bad for investors going forward.

Reiterating that forecast on Friday, Jensen argued that investors have yet to price in the coming muti-year recession and inflation that will remain above the Feds 2% target for some time.

You havent seen the bottom in risky assets, he warned. Its going to be a couple year downcycle here.

The effects of Chinas reopening and advice for investors

Chinas economic reopening is one of the main reasons Jensen is worried about inflation next year.

Throughout 2022, Beijings strict COVID zero policies have stood in stark contrast to the gradual easing of pandemic-era restrictions seen in the West.

But in recent weeks, officials in China have begun rolling back some COVID restrictions after strict, extended lockdowns sparked rare public protests across the country.

Chinas reopening will be beneficial for some countries, but for the U.S. and Europe it could be an issue, according to Jensen.

This is not a great thing for the U.S. and Europe, he said. China has been a blessingbecause it has been such a disinflationary force.

With the Chinese factories and consumers locked down, demand for raw materials and goods from China was reduced over the past few years. That helped keep inflation at bay globally.

Now, as China reopens, commodity prices are expected to rise, exacerbating inflation in the West just as a recession hits.

That will make the dilemma for central banksto fight inflation even as a recession looms or to pause or cut rates and deal with higher inflationeven worse, Jensen said.

For investors, Jensen warned that this means there arent many solid places to hide at the moment.

Overall its not great out there, and cash is not a terrible thing, he said. Assets dont always go up even though weve had that feeling over the last decade.

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About 65% of investors believe stagflation is a bigger risk than a recession, according to the 2023 Natixis Outlook Survey that surveys global institutional investors who oversee a combined $20.1 trillion in assets under management. Given the vast investment portfolios these big-time money managers generally control, they tend to be keyed into the markets and potential risks at a greater rate than the average investor. 

Stagflation is typically defined as an economic cycle where theres persistently high inflation as well as high unemployment and slow economic growthcompared to a recession where theres economic decline and generally high unemployment, but inflation is not so much an issue.

In the U.S., the best example of stagflation occurred in 1970s due, in large part, to the oil crisis. While high inflation is challenging for central banks like the Federal Reserve to tamp down, stagflation is much more difficult to control because correcting one aspect of the problem, like unemployment, could make another aspect like inflation, worse. 

With the U.S. Federal Reserve attempting to lower sky-high inflation through interest rate hikes designed to quell consumer spending, investors concerns about stagflation are not misplaced. More than half (56%) of investors surveyed predict inflation will remain stubbornly elevated next year, including two-thirds of those based in North America. And nearly half (49%) think that the Feds soft landing goal of bringing down inflation without a severe economic downturn is an unrealistic expectation.

But Natixis Investment Managers lead portfolio strategists Jack Janasiewicz said recently how you view the risk of stagflation depends on your definition of the term. Yes, there will probably be some softening of the U.S. labor market over the next year, and unemployment will likely trend higher than the historic lows weve seen recently. That may slow economic growth, but he doesnt think well see rampant unemployment. 

If you look at why we have higher inflation, its basically the result of a series of shocks that hit the system, Janasiewicz said during an event last week. There was shock after shockCOVID and the Russian invasion of Ukraine being the biggestthat basically spurred supply shocks around the world. Yet at the same time, demand for goods largely kept pace because the U.S. was sending out stimulus checks, expanded unemployment benefits, and child tax credits. With these stimulus programs ending and that extra money in the system beginning to ebb, some of that inflationary pressure will start to naturally ease.

Inflation is certainly here, but its coming down, Janasiewicz said. I think youre going see a little bit of softening in the labor market, so the unemployment rates are going to be higher, but I dont think were in the traditional stagflation sense, where its the 70s sort of thing. Youre going to have a mild economic recession, and prices are gonna continue to drift lower.

Lynda Schweitzer, global bond portfolio manager at Loomis Sayles, agreed that the U.S. is heading toward a recession. If that occurs, it will indeed result in slower economic growth, she said. But there are, of course, other components required to cause stagflation.

Schweitzer also agreed with Janasiewicz that the labor market is the critical componentand the potential differencein the stagflation narrative. As we look at the labor market, you have to see a significant move in the unemployment rate in order to fully quell inflation next year, Schweitzer said. But if the Fed goes too far, the U.S. could tumble into persistently high unemployment, and as a result we could see stagflation in the more traditional sense.  

The Natixis surveyed institutional investors across several countries, and Schweitzer noted the risk of stagflation is perhaps more of a concern outside the U.S. Europe, for instance, is much more dependent on what happens with energy prices as to whether that becomes a stagflation environmentand countries there have less ability to manage that. 

Stagflation is a global issue to keep in mind, Schweitzer said. But investors and consumers may see it play out differentlyand to varying degreesdepending on where theyre based. 

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The oldest members of Generation Z (those born between 1997 and 2012) are entering the workforce and beginning to grow their incomes and plan for the future. One way theyre doing that is through their retirement savings. 

While this group is still new to the retirement savings game, the thought of retirement is at the forefront for many, with over 30% of Gen Zers citing saving for retirement as a financial priority. 

How much does Gen Z have saved for retirement? 

Generation Z is the youngest working generation, and many Gen Zers have still not reached working age. According to a recent report by the TransAmerica Center for Retirement studies, members of this generation have a median of $33,000 across all of their retirement savings accounts. Thats compared to $162,000 for Baby Boomers, $87,000 for Gen Xers, and $50,000 for Millennials. The estimated median savings among all workers is $67,000. 

While Gen Zers do have a lower balance in their retirement accounts, theyre actually saving a larger percentage of their annual salary compared to older generations. 

On average, Gen Z workers are putting away 20% of their annual salary into their 401(k) or a similar plan. Thats significantly more than the 10% to 15% experts typically recommend. 

Why are Gen Zers behind on saving? 

There are a few underlying factors that have contributed to the smaller savings balances of this generation. 

Gen Zers are still new to the workforce

Less time in the labor force means that Gen Zers havent yet reached their high-earning years. To add an additional layer of challengesmany of the older members of this generation were entering the workforce just before or during the start of the pandemic, when unemployment rates were reaching new highs. In fact, the same study showed that 52% of Gen Zers experienced one or more negative impacts on their employment, ranging from layoffs and furloughs to reductions in hours and pay. 

Many Gen Zers have other financial priorities

Compared to older generations, Gen Zers are the least likely to prioritize saving for retirement over competing financial obligations. Gen Zers have, on average, $20,900 in student debtthats 13% more than millennials, according to the Fed. And 7.7% of Gen Zers have student loan balances over $50,000.

Gen Z is especially struggling in terms of their overall financial health over the past couple years, likely impacting their ability to save for retirement, says Mike Foy, senior director and head of wealth intelligence, at J.D. Power. Among all U.S. self-directed investors (2021 and 2022 data) only 52% of Gen Zers say they are always able to pay all their bills on time, versus 71% of older investors, and just 43% say their debt is completely manageable versus 60% of older investors. These short-term financial challenges limit Gen Z investors ability to address longer term needs like retirement savings. 

4 Ways Gen Zers can increase their retirement savings  

For Gen Zers hoping to switch gears and ramp up their retirement savings strategy, there are plenty of ways to set themselves up to thrive in their later years with a little pre-planning now. 

  1. Avoid taking early withdrawals from your retirement account. More than one-third of workers have ever taken a loan, early withdrawal, and/or hardship withdrawal from their 401(k) or similar plan or IRA, including 41% of Gen Zers. Depending on the kind of loan or withdrawal, you could face steep penalties and taxes later on. It could also mean extending your retirement timeline or altering your retirement lifestyle so that you have enough funds to live off of. If you find yourself in a bind, consider alternatives to borrowing from your future self like tapping into your emergency savings. 
  2. Regularly increase your contribution amount. You should aim to save a set percentage of your income for retirement, no matter how much youre earning. When it comes to growing your retirement savings, time is the name of the game, and the earlier you start, the better off youll be in the future. Waiting to invest for retirement can present a risk of having less compounding time for the money to grow. This applies to any form of investment. The longer you wait to invest in your career, the less time you have for higher earnings, says Brian Kuhn, certified financial planner, CLU, CLTC, and a financial advisor at Wealth Enhancement Group. As your income increases over time, youll want the amount that youre saving for retirement to align with your higher income. Make it a priority to increase your monthly retirement savings contribution after every pay raise. You should also try to direct any windfalls or bonuses to your retirement account as well. 
  3. Open a second retirement account. If youre already saving for retirement through an employer-sponsored account, consider opening a separate IRA. The annual IRA contribution limit is $6,000 in 2022 ($7,000 if age 50 or older) and $6,500 in 2023 ($7,500 if age 50 and older). Whats moreyou could still benefit from a contribution match without an employer. 
  4. Take advantage of your employers match. If your employer does offer a match, dont leave any free money on the table. Generation Z members, regardless of their financial priorities and resources, can boost their retirement savings by striving to save at least what their employer is willing to match, says Kuhn. Thats a good starting point.

The takeaway 

Gen Zers are still at the start of their retirement saving journey, but the key to building a comfortable savings to live off of in your later years is to start early. Maximize your savings by taking advantage of employer contributions, choosing a lucrative savings vehicle, and building an emergency fund so that your retirement savings arent impacted by any unforeseen emergencies. 

Its not what anyone wishes to hear as we approach the end of the year, but research has found that theres an uptick in heart-related deaths during the Christmas and New Years holidays. People die the most from heart attacks in the last week of December compared to any other time of year, according to the American Heart Association (AHA). Cardiologists say holidays can alter peoples routines, and changes in sleep, exercise, and diet can put people at risk for heart-related problems. 

With the rise in holiday travel, people may forget to take their medications, push their health appointments to the New Year, or ignore symptoms that may be associated with heart attacks like chest pain, shortness of breath, or nausea, says Dr. Stephanie Coulter, a cardiologist and assistant medical director at The Texas Heart Institute. 

Amid the holiday rush, it may be easy for many people to miss warning signs and symptoms for a heart attack, she says. 

As respiratory viruses surgeduring what experts have coined the tripedemic with the rise in RSV, COVID-19, and fluinfected people may experience trouble breathing and changes in their oxygen levels which can put them at risk for heart attacks, Coulter says. 

Doing what you can to mitigate the risk of heart attacks can help you and those around you. 

What are the signs of a heart attack? 

  • Chest pain/pressure in the chest
  • Nausea
  • Discomfort in an arm or shoulder
  • Back, neck, and jaw pain
  • Feeling weak or faint 
  • Trouble breathing 

Womens and mens symptoms may differ. The most common symptom for both is chest pain, but women may experience more subtle symptoms like nausea, vomiting, shortness of breath and back or jaw pain, according to the AHA. 

Most heart attacks involve discomfort in the center or left side of the chest that lasts for more than a few minutes or that goes away and comes back. The discomfort can feel like uncomfortable pressure, squeezing, fullness, or pain, according to the U.S. Centers for Disease Control and Prevention (CDC). 

While the symptoms vary depending on the person, its important to know the signs and act accordinglyespecially because one in five heart attacks happen without the person knowing it. The CDC explains in these cases that the damage is done, but the person is not aware of it.  

Do not ignore warning signs during the holidays because you are worried about ER crowds or inconveniences, Coulter says. It is always better to be safe than sorry regarding your heart health. 

Call 9-1-1 immediately if you or someone youre around begins feeling the signs and symptoms of a heart attack. Some people may experience heart attacks immediately while others experience symptoms for a longer period of time. 

Keep an eye on your friends and family, and if they seem to be having signs or symptoms that are worrisome, help them to know what to do, Dr. Eric Cruzen, executive director of the Emergency Medicine service line at Northwell Health, tells Fortune. 

Being out in the cold can stress the heart 

When people maybe go outside to shovel their snow, or do their yard work in the cold, theyre exposing their heart and their bodies to a level of effort that theyre not typically used to, says Dr. Matthew Saybolt, medical director of the structural heart disease progress at Hackensack Meridian Jersey Shore University Medical Center. 

Cold weather causes blood vessels to constrict, which can increase heart rate and blood pressure and stress your heart. 

Not everybody is used to swinging hundreds of pounds of snow with a shovel, Cruzen says. Just because the driveway needs shoveling doesnt necessarily mean that you may be the best candidate to go out there and do it, so just remember to keep your activities reasonable, and where possible, dont exert yourself beyond what you normally would.

For those living in colder temperatures, doing the same outdoor activities you did in the warm months can also stress the heart. The cold affects the body differently. You expend more energy, so consider taking it slow. 

Cardiologists recommend individuals at high risk for heart disease limit strenuous activities in the bitter weather when they can. 

Monitor your diet 

Diet changes also affect the heart, and the holidays can be prime for consuming foods with high salt content, which elevates blood pressure. Meals rich in fatty content can cause inflammation and put stress on the body. Increased alcohol use during the holidays can cause hypertension or elevated blood pressure. 

Cardiologists say this doesnt mean cutting out all holiday indulgences, but instead, they say dont be afraid to ask hosts for accommodations and keep some semblance of your normal diet intact. 

Know if you or a loved one is at high risk for heart disease 

About half of Americans have one of three risk factors for heart diseaseincluding high blood pressure, high cholesterol, and smoking. If youre high-risk for heart disease, its important to be extra mindful of how the winter months change your routine, Cruzen says. Other risk factors include being overweight or obese, diabetes, physical inactivity, and extreme alcohol use. 

For people who have a high-risk relative or friend, check in on themoffer to help them with difficult tasks in the cold, make meal accommodations, dont smoke around them, and dont nominate them to shovel the driveway, Cruzen says. 

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Just last month, Changpeng Zhao looked like the undisputed king of crypto. The upstart exchange FTX had spectacularly imploded in early November, and Zhao, the CEO of the exchange giant Binance, had carried out the kill shot by dumping FTXs native crypto token and triggering a liquidity crisis that sank FTX and its founder and CEO, Sam Bankman-Fried. For a few days, it even looked like Binance would acquire FTX.

In the weeks since, FTXs disordered collapse has risked pushing an already-stressed crypto industry over the brink. Prosecutors and regulators have alleged that FTX was not just a company in distress, but a massive fraud, and Bankman-Fried was arrested Monday in the Bahamas. The FTX debacle has also triggered widespread mistrust among crypto survivors, who are watching for what dominoes might fall nextand whether one of them might be Binance.

Binance is the worlds largest crypto exchange by volume. But it has been plagued by trouble with regulators and is facing potential criminal charges related to money laundering and sanctions violations. Misgivings about the company accelerated this week after customers pulled billions worth of assets from its platform and Binance temporarily halted withdrawals of a key asset. Other crypto companies held crisis meetings to plan how theyll respond if Binances situation worsened.

So, how much trouble is Binance in? Its not as bad as FTX, insiders say, but its still not good.

Senior executives at several other well-known crypto firms, including Binances biggest rivals, told Fortune they do not believe Binance is on the cusp of insolvencya conclusion bolstered by blockchain data that shows the company holds ample stores of Bitcoin and liquid assets. While some casual observers have drawn parallels between Binance and FTX, those within the industry arent going there.

Zhao acknowledged this week that the company and crypto more broadly are enduring a tough stretch. In a memo to staff, he wrote that the industry is undergoing an historic moment and that the next few months would be bumpy, but assured them that Binance will survive any crypto winter.

Nonetheless, the company and its CEO are under scrutiny like never beforeand the next few months will determine whether Binance has a long-term future.

Binances very bad week

While this weeks news cycle has been consumed by Bankman-Fried, and crypto-related testimony in Washington, D.C., a fresh drama about Binance played out quietly in the background. It began when the analytics firm Nansen published data to show customers cashed out around $3.6 billion worth of assets over seven days from Binance, including almost $2 billion in a single day.

The spur for the withdrawals was likely a report published Monday that claimed factions in the Justice Department are pushing aggressively to file criminal charges related to sanctions violations and money laundering against Binance and its CEO. The full extent of the outflows may have been higher than reported, since the Nansen data includes withdrawals of Ethereum and stablecoins but not Bitcoin. An executive at a Binance rival, who requested anonymity because he was not authorized to speak publicly, told Fortune that his companys internal estimates suggest that total outflows may have been as high as $6 billion to $8 billion, including cash-outs of Bitcoin and other currencies like Tron.

The alarm over Binance increased amid reports that the company was failing to process withdrawals of USDC, one of the more widely used stablecoins pegged to the U.S. dollar. This is part of what made it feel urgent to map out the worst-case scenarios involving Binance, the executive at the rival company said.

That worst-case scenario might sound familiar: It speculates that Binance could be using a token called BNB, which is native to Binances own blockchain, as collateral for loans. Binance denies this practice, but if it were true, it could leave the company vulnerable the same way FTXs FTT token did. The value of BNB could crater if the market were to grow uneasy about Binances health, which would leave Binance unable to pay back loans, leading it to sell its holdings of the wildcat stablecoin Tether. That in turn could lead to Tetherwhose reserve structure has always been murkyfailing to maintain its $1 peg, which would set off a wide conflagration across the crypto markets.

A spokesperson for Binance told Fortune that the exchange has never used BNB as collateral. But speculation about such a disastrous scenario is making some in the industry uneasy about Binances large holdings of assets like BNB and Tether, which offer little transparency. Another executive, who likewise insisted on anonymity, said their own firm convened a special meeting in the wake of this weeks Binance headlines to explore how it would react if the giant exchange collapses over the holidays.

Binance itself has responded forcefully to all of this dire prognosticating (which might be more reassuring had we not all seen similar behavior from other troubled crypto leaders).

Late on Tuesday, amid widespread murmurings about the situation at Binance, CEO Zhao took to Twitter to downplay the recent outflows, noting that the company has experienced bigger ones in the past and suggesting such events amount to healthy stress tests.

By the end of the week, outflows from the platform had begun tapering and fears about its financial health quieted down some.

Ascreenshot from Nansen taken mid-day Thursday that shows 7-day outflows at Binance exceeded all other crypto exchanges but that it had declined to $2.6 billion compared to the $3.6 billion figure reported earlier this week.

Just a stress test?

Other crypto industry figures agreed with Zhaos assertion that concern about the outflows were overblown. These included the venture capitalist Nic Carter, who rejected claims of a bank run at Binance as hyperbolic, and noted that total assets on its platforms dipped 15% at most and that much of the money had already flowed back.

As for Binance temporarily halting withdrawals of USDC, the company says that occurred for technical reasons rather than due to any existential threat to Binances financial health. The backstory is complicated but it involves a recent decision by Binance to convert its holdings of USDCwhich is controlled by rivals Circle and Coinbaseto its own stablecoin, known as BUSD. Binance likely made this decision to favor its own coin, as other exchanges have recently done, because stablecoins have become an increasingly important source of revenue for their issuers as interest rates climb. (Issuers typically invest the dollars backing the stablecoins into T-bills and pocket the interest.)

Binance does, however, let customers convert any USDCs that were forcibly converted to BUSD back to USDC for the purpose of withdrawals. The upshot is that, when nervous investors sought to redeem their USDC from Binance this week, the company did not have enough on hand to immediately honor the withdrawals. This meant Binance had to wait for its American banking partnera New York company called Paxos that tokenizes assets and issues white-labeled stablecoins for Binance and othersto obtain more USDC on its behalf. In an interview with Fortune, Paxos confirmed this, saying many of the withdrawal requests occurred outside of banking hours, which slowed its ability to deliver USDC to Binance.

Even so, a significant number of Binances customers appeared to have dropped Binances stablecoin in favor of the one issued by Circle and Coinbase. We saw record-making history yesterday with more than $2.5B USDC issuance in a 24-hour period, Circles CEO, Jeremy Allaire, told Fortune.

While Binance appears to have survived the events of the last week relatively unscathed, its biggest battles lie ahead.

Binances fight for legitimacy

Binance burst on the scene during the crypto boom of 2017, and soared to popularity by offering a cornucopia of digital assets and innovations, including its own blockchain. It soon became the biggest crypto exchange in the world by trading volume, thanks in part to Zhaos ruthless growth-at-all-cost strategies that included hopscotching the world in search of favorable regulatory environments andin its early dayslax application of know-your-customer laws.

But even as Binance became the dominant player in the crypto world, Zhao has maintained the status of an outsider. This may be because he is not part of the clique of entrepreneurs who brought Bitcoin into the mainstream during cryptos early years, and who still wield outsize influence at conferences and on social media. Or it may be because the crypto establishment is uneasy with Binances initial cowboy approach to regulationeven though nearly every popular crypto company also played it fast-and-loose in their early days. Whatever the reason, Binance has few friends in Washington, D.C., which has become the de facto center of global crypto regulationa situation that could spell trouble for the company as U.S. lawmakers move to impose new laws on the controversial industry.

In recent months, Binance has sought to portray concerns about the company as a xenophobic response to Zhaos Chinese heritage. In a September blog post, Zhaowhose parents moved the family to Vancouver when he was 12suggested that competitors were trying to undermine him by playing up his ethnicity. I am Canadian citizen, he wrote. Period. He has echoed those sentiments on Twitter in recent weeks.

But despite Binances disavowal of ties to China, rumors persist. One credible report, for instance, suggests the company maintained an office in Shanghai that was shut down in late 2019, though Binance has denied its existence. The company has shifted headquarters between various jurisdictions known for light regulation, including Malta, and does not provide clear information about where its headquarters is located today. A spokesperson said Binance has regional hubs in Dubai and Paris.

And then there is the matter of Binances finances. Zhao has repeatedly asserted on Twitter that every asset a customer places on Binances platform is backed 1:1 by assets held by Binance. Earlier this week, the company published an audit, an apparent attempt to reassure customers that their funds were safe. But it did little to quiet fears. The audit was prepared by the South African branch of global firm Mazars, rather than by one of the Big Four accounting firms, and critics noted that the document was woefully incomplete. One accounting professor went so far as to call it worthless.

In response to an inquiry from Fortune about the audit report, a well-known crypto founderwhose company competes with Binancelikewise blasted the report as insufficient. It really comes off as if theyre covering up something. [Theyre] trying to show collateral value rather than 1:1 assets vs liabilities. The collateral trick is exactly the game FTX was playing, borrowing good money from users with bad money for collateral. Its very suspicious, wrote the founder, who asked not to be identified.

In response to an inquiry about why Binance did not use a Big Four firm, a spokesperson said the company asked the firms to do conduct a so-called proof-of-reserve audit but that they are currently unwilling to conduct a PoR for a private crypto company. They added that Binance in the meantime intends to use technological solutions known as Merkle Trees and zk-SNARKs to provide evidence to customers that their funds are safe.

As for BNB, the Binance-created token was released in 2020 and is today the fifth-most-valuable cryptocurrency, with a market cap of around $43 billion. In response to an inquiry from Fortune, a Binance spokesperson strongly argued that BNB is not analogous to FTTthe illiquid token that FTXs disgraced founder Sam Bankman-Fried created and then used to as collateral.

Binance has never used BNB for collateral, and we have never taken on debt as an organization. BNB is a blockchain token, which means it is the official currency of BNB Chain, the largest chain by active users on the globeeven larger than ethereum, the spokesperson wrote. This is the utility that BNB provides to millions of users across the globe each day and why it is highly liquid and has organic demand. Furthermore, BNB is a finite asset that is algorithmically burned periodically and is managed by a voting protocol within the BNB Chain community. FTT on the other hand, was an exchange token which provided little to no utility to the marketplace and was entirely illiquid.

Binance has sought to portray BNB and its associated blockchain as largely decentralized, and akin to Bitcoin or Ethereum. These claims have been greeted with skepticism, however, within the broader crypto community, particularly after a revealing incident: The Binance chain got hacked for $570 million in early October. In response to the hack, Binance quickly paused the chains activitiesa feat that could not be easily undertaken on a decentralized blockchain. The incident provoked mocking responses like the one below about who actually controlled the chain:

No choice but to go legal

For now, the opinions of the crypto world are likely to have less of a say in shaping Binances future than the opinions of another influential body: the U.S. government.

While Binance has been under scrutiny for years by various governmentsas have numerous other crypto firmsthe company today appears to be facing an unprecedented level of legal peril. Recent Reuters reports, based in part on leaks from the U.S. Justice Department, have highlighted a series of actions by Binance that have put the company and Zhao in the crosshairs of federal prosecutors.

Those actions include Binance permitting actors in heavily-sanctioned Iran to conduct millions of dollars of transactions on its platform, and a 2018 planfirst reported by Forbesto use a U.S. subsidiary as a Potemkin Village to distract regulators while the company continued to allow American customers onto its unregulated international exchange. (Binance says it never put the plan into place, and suggests that its unfair to impugn the company for an aborted plan hatched over four years ago).

In its most recent report published on Monday, Reuters cites Justice Department sources who say prosecutors within the agency aim to file criminal charges against Binance and Zhao in the near futurethough the agency is reportedly divided over whether to do so. Reuters also cites discussions between the Justice Department and Binance lawyers about a potential plea deal.

All of this coincides with a strong push by Binance over the last 18 months to repair its earlier outlaw reputation. This push has included hiring figures who occupied senior positions at enforcement agencies such as Interpol and the IRS, and setting up a U.S. entity run by experienced American executives.

Finding a way to walk the straight and narrow has become necessary, one individual who has reported closely on Binance told Fortune, because the companys offshore operations and large volumes of cash floating across its platform have become too big for regulators to ignore. They got so big they had no choice but to go legal, said the individual.

Whether Binance succeeds in this gambit is another matter. For all of this to work out, the company must not only avoid the full wrath of the Justice Department, but also reassure investors and the rest of the crypto industry that it will be transparent about the true nature of everything on its booksincluding its hoards of BNB, Tether, and other coins. To date it remains unclear what, exactly, is on Binances balance sheet.

Elon Musk may have shut down Jack Sweeney on Twitter, but the college student isnt backing down.

Sweeney, a sophomore at the University of Central Florida, had been running a Twitter account, @ElonJet, that tracked the flights of the billionaires private jet. On Wednesday evening, the account was permanently suspended.

The Tesla CEO tweeted on Wednesday that a car transporting his 2-year-old son, X, was followed on Tuesday by a crazy stalker (thinking it was me), who later blocked car from moving & climbed onto hood. He added that Legal action is being taken against Sweeney & organizations who supported harm to my family.

In an op-ed for Newsweek published Thursday, Sweeney wrote: I certainly never expected him to tweet that, especially as he appears to refer to me by name as Sweeney in the tweet. It made me wonder if hes trying to scare or intimidate me.

It also came as a surprise because Musk, who describes himself as a free speech absolutist, specifically tweeted in early November shortly after he took over the company that he would not take any action against Sweeneys jet tracker. 

My commitment to free speech extends even to not banning the account following my plane, even though that is a direct personal safety risk.

If Musk flipped his position, it isnt the only example of him doing so of late. After selling 4.4 million of his personal Twitter shares for $4 billion in April, he tweeted, No further TSLA sales planned after today. But on Wednesday, he sold more shares, worth $3.6 billion, further fueling questions about whether hes the right leader for Tesla given his focus on Twitter, which he bought in late October for $44 billion. 

Sweeney noted that he drew from publicly available data for his posts about Musks private jet movements.

I dont think my account specifically is putting his safety at risk, he wrote. Im in the middle here: the data comes from a public source, and then I post it on Twitter.

Musk tweeted on Wednesday: Any account doxxing real-time location info of anyone will be suspended, as it is a physical safety violation. This includes posting links to sites with real-time location info. Posting locations someone traveled to on a slightly delayed basis isnt a safety problem, so is ok.

Sweeney wrote that he had appealed to Twitter to have ElonJet reinstated, and the company temporarily agreed to it. Twitter said tracking apps would be allowed if you posted the data on a 24-hour delay, and I was happy to do that, he wrote. But within an hour or two, I was suspended again.

Fortune reached out to Twitter but did not receive an immediate response.

On Thursday night, Twitter abruptly banned the accounts of more than a half dozen journalists. Musk suggested that the users were banned because they shared information about the ElonJet account.

Sweeney noted that he started the ElonJet account because he was a fan of Tesla and SpaceX, the private space business Musk also runs. 

Im still a fan of Musks ventures, he wrote, but I dont know that I agree with some of the choices that he is making on Twitter now.

In the meantime, he isnt backing down following the ban of ElonJet. 

This experience has motivated me, if anything, he wrote. Ive been wanting to build my own website and this is just another reason to accelerate that. The website would basically be all of my accountsnot just ElonJetwith a lot more features, like a map, historical data, and stats.

He noted he set up on Wednesday an account on Mastodonan alternative social network that other Twitter users have also flocked to since Musks turbulent takeoverand had already had accounts on Facebook, Instagram, Telegram, and Truth Social. 

I will continue tracking Musks jet, even if it is on different platforms, he wrote. If I give up now, its kind of like letting the big guy win.

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