Tag: Manhattan (NYC)

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Owners of BitMEX, a Leading Bitcoin Exchange, Face Criminal Charges

American authorities brought criminal charges on Thursday against the owners of one of the world’s biggest cryptocurrency trading exchanges, BitMEX, accusing them of allowing the Hong Kong-based company to launder money and engage in other illegal transactions.

BitMEX is far from the first cryptocurrency company to be suspected of facilitating criminal activity. But it is the largest and most established exchange to face criminal charges.

Federal prosecutors in Manhattan indicted the chief executive of BitMEX, Arthur Hayes, and three co-owners: Benjamin Delo, Samuel Reed and Gregory Dwyer. Mr. Reed was arrested in Massachusetts on Thursday, while the other three men remained at large, authorities said.

Prosecutors said BitMEX had taken few steps to limit customers even after being informed that the exchange was being used by hackers to launder stolen money, and by people in countries under sanctions, like Iran.

“BitMEX made itself available as a vehicle for money laundering and sanctions violations,” the indictment released on Thursday said.

BitMEX has handled more than $1.5 billion of trades each day recently, making it one of the five biggest exchanges on most days. BitMEX and Mr. Hayes have been known for pushing the limits in the unregulated cryptocurrency industry.

After it was founded in 2014, BitMEX grew popular by allowing traders to buy and sell contracts tied to the value of Bitcoin — known as derivatives, or futures — with few of the restrictions and rules that were in place in other exchanges. That allowed investors to take out enormous loans and make risky trades.

The relaxed attitude also made it possible for people all over the world to easily move money in and out of BitMEX without the basic identity checks that can prevent money laundering. In August, BitMEX put in place some of those verification checks.

Mr. Hayes is from Buffalo, and previously worked as a trader at Deutsche Bank and Citi after graduating from the University of Pennsylvania. He incorporated BitMEX in the Seychelles even though its offices were in Hong Kong and New York.

Mr. Hayes chose Seychelles “because it cost less to bribe Seychellois authorities — just ‘a coconut’ — than it would cost to bribe regulators in the United States and elsewhere,” according to the indictment.

A spokesman for HDR Global Trading Limited, one of the corporate entities controlling BitMEX, said: “We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously.”

BitMEX has been reported to be under investigation by American authorities since last year. On Thursday, American cryptocurrency experts said they were not surprised that the exchange would attract scrutiny given its freewheeling attitude.

“The vast majority of firms that service the U.S. are compliant, so it’s not surprising that the government would now turn to those that refuse to follow the law,” said Jerry Brito, the executive director of Coin Center, a research and lobbying group in Washington.

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Manhattan’s Office Buildings Are Empty. But for How Long?

Even as the coronavirus pandemic appears to recede in New York, corporations have been reluctant to call their workers back to their skyscrapers and are showing even more reticence about committing to the city long term.

Fewer than 10 percent of New York’s office workers had returned as of last month and just a quarter of major employers expect to bring their people back by the end of the year, according to a new survey. Only 54 percent of these companies say they will return by July 2021.

Demand for office space has slumped. Lease signings in the first eight months of the year were about half of what they were a year earlier. That is putting the office market on track for a 20-year low for the full year. When companies do sign, many are opting for short-term contracts that most landlords would have rejected in February.

At stake is New York’s financial health and its status as the world’s corporate headquarters. There is more square feet of work space in the city than in London and San Francisco combined, according to Cushman & Wakefield, a real estate brokerage firm. Office work makes up the cornerstone of New York’s economy and property taxes from office buildings account for nearly 10 percent of the city’s total annual tax revenue.

What is most unnerving is that a recovery could unfold much more slowly than it did after the Sept. 11 attacks and the financial crisis of 2008. That’s largely because the pandemic has prompted companies to fundamentally rethink their real estate needs.

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Credit…Vincent Tullo for The New York Times

Robert Ivanhoe, a real estate lawyer at Greenberg Traurig, said he had about 20 clients that had postponed searches for new offices. “They are putting a lot of thought into coming up with a new operating model — how much of my work force is going to work from home and for how much time?” he said. “It has never been turned upside down like this before.”

Real estate data confirms that. The number of office leases signed from January through August totaled 13.7 million square feet, less than half as much as the first eight months of last year, according to Colliers International, a real estate brokerage firm. By contrast, leasing hit an 18-year high at the end of last year with nearly 43 million square feet of new leases and renewals.

“When it comes to making decisions about office leases, the words are postpone, adjourn and delay,” said Ruth Colp-Haber, the chief executive of Wharton Property Advisors, a real estate brokerage firm.

Executives at the meal delivery company Freshly were ready to sign a lease for 50,000 square feet of office space at 2 Park Avenue, a stately, 29-story Art Deco tower in Midtown, in March.

But the coronavirus abruptly shut New York down for several months, and the company “hit pause” on its expansion, said Michael Wystrach, Freshly’s founder and chief executive. The company is still considering new office space, but he isn’t sure when it would sign a lease. “We are long-term believers in New York City.”

During any weekday in Midtown, the sidewalks are as empty as they usually are on a Sunday, underscoring how few employees have returned. In August, a survey of major employers by the Partnership for New York found only 8 percent of employees had returned to the office and most expected to bring employees back by next summer, and another quarter of them had not decided when they would return.

Elected officials, real estate tycoons and even Jerry Seinfeld, the comedian, have issued paeans to New York’s resilience, arguing that city has a history of bouncing back. The city will soon be brimming with people, by their telling.

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Credit…Vincent Tullo for The New York Times
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Credit…Vincent Tullo for The New York Times

But pessimists — including some New York hedge fund managers — see dark days ahead. They contend that companies will tell most employees to stay away until a vaccine is widely distributed and perhaps for much longer.

Which of those two visions is closer to being right will help determine how quickly New York regains its energy, economic health and tax revenue.

Investors are not expecting a quick recovery. Shares of companies with lots of New York office space like Empire State Realty Trust, which owns the Empire State Building, and SL Green Realty, which owns the immense new One Vanderbilt tower next to Grand Central Terminal, have plunged this year.

“I think the New York office market is going to be generally challenged for the next three to five years,” said Jonathan Litt, the founder of the hedge fund Land & Buildings. His fund published a report in May on why it thinks the shares of Empire State Realty Trust are overvalued.

A big part of the problem is that many companies are holding off on new leases.

In recent years, the biggest renters of office space have been co-working companies like WeWork, New York’s largest private tenant. Such businesses signed nearly 8 percent of new leases in Manhattan last year and 12 percent in 2018, according to Cushman & Wakefield. But co-working companies are in distress and some may not survive.

Other potential renters of offices are unsure what to do or are waiting for landlords to reduce rents, factoring in incentives like rent-free months and cash for office improvements. “What’s the point of signing a lease with a 15 percent decrease in rent if you think it’s going to go lower?” said Michael Colacino, the president of the brokerage firm SquareFoot.

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Credit…Vincent Tullo for The New York Times

Some companies with leases that are ending this year or next appear to be kicking the can down the road, signing short-term extensions rather than committing to typical deals that last several years. In recent weeks, NBC Universal extended a lease for a secondary office at 1221 Avenue of Americas and the Stroock & Stroock & Lavan law firm did the same for its office downtown. But they both did so for just a year, according to Colliers. A spokeswoman for NBC Universal declined to comment and Stroock & Stroock did not return a call and multiple emails.

In normal times, owners of large office buildings would typically not entertain a one- or two-year lease extension for a large tenant, said Franklin Wallach, senior managing director of the New York Research Group at Colliers. “They see that new leasing activity has dropped off while the amount of sublet space coming into the market is on the rise, so the average landlord wants to keep the tenant in the building.”

One of the biggest concerns is that companies could soon start trying to sublease hundreds of thousands of square feet of space that they are not planning to use anytime soon. For companies seeking offices, sublets often provide a shorter lease at a steep discount to market prices.

Starr Insurance Companies, which is led by Maurice R. Greenberg, is seeking to sublet 190,000 square feet that it leases at 399 Park Avenue, according to Colliers. And First Republic Bank, which signed a 211,521-square-foot lease last April for 410 Tenth Avenue, put 151,000 square feet up for sublet, according to a report from the real estate broker Savills. Spokesmen for Starr and First Republic declined to comment.

Sublet space made up about a quarter of the total office space available in New York at the end of the second quarter, according to Savills, and many real estate brokers said they expected that to increase in the coming months.

In January, Ms. Colp-Haber was showing offices to a construction company that she said was in the market for a five-year lease in Manhattan. Last month, the company signed a sublet for one year at a 40 percent discount to the original lease, she said.

Still, property owners claim not to be overly worried because most tenants are paying their rent. They point out that office leases last for years and are very difficult to end early. And large financial firms, among the biggest tenants in New York, aren’t stressed as they were in the last recession.

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Credit…Vincent Tullo for The New York Times

The most optimistic sign that New York’s office market will bounce back quickly is that big technology companies, which are gaining ground, are scarfing up square feet. Facebook in early August leased all of the office space — 730,000 square feet — in the Farley Post Office next to Penn Station. Amazon acquired the former Lord & Taylor building on Fifth Avenue in March from WeWork.

Retail tenants in Hudson Yards, the sprawling development on the Far West Side of Manhattan, may be reeling, but companies are still moving in to the project’s office buildings.

“They still believe New York is the place to have their business and grow their business,” said William C. Rudin, chief executive of Rudin Management Company. “The Amazon commitment is amazing; the Facebook commitment is amazing.”

Some landlords see encouraging signs in their office buildings in the suburbs, where social distancing is easier because people tend to commute by cars. This, they argue, suggests that employers and workers want to return to the office and more of them will make their way back to New York, too.

Anthony E. Malkin, chief executive of the Empire State Realty Trust, which owns the Empire State Building, said the number of people coming into his office buildings in Connecticut in mid-August was 40 percent of what it was a year earlier, and up from next to nothing in the spring because of the strict lockdown policies in place at the time. “That is a very high number and it’s growing.”

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A Wall Street Bank’s Hard-Driving Culture Pushes Traders Into the Office

When a group of Bank of America employees dialed into a call with their boss, Soofian Zuberi, late last month, they were expecting to hear that they could continue doing their jobs from the safety of their homes. The coronavirus had ravaged New York City and was tearing across the country, leaving well more than a thousand dead. Most firms, including those on Wall Street, were already recommending that people work from home.Mr. Zuberi provided no such comfort. Instead, the global sales executive praised individuals by name who were still braving the office, calling them out as if they …

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Everybody Goes to Burger Heaven

“New York is a lonely, lonely, lonely city,” Yossy Morales said one recent Saturday, a morning so frigid that a bicycle deliveryman outside Burger Heaven on Lexington Avenue at 62nd Street was forced to pour scalding water over his Kryptonite lock to key it open.

For the past decade Ms. Morales, 42 and a native of Honduras, has been on an informal mission to thaw the chill of daily life in a city of eight and a half million. During that time, she has waited tables and served at the counter of Burger Heaven, a family-owned East Side institution, slinging breakfast specials and dispensing human warmth along with a steady stream of endearments to a loyal clientele.

“Everybody has problems, and it’s fun to talk to them about their life,” Ms. Morales said. “It’s not just customer and waitress. It’s friend and friend.”

When a couple walked through the door at 7:45 a.m., Ms. Morales had put in their order before they had shed their overcoats: green salad and two eggs over easy; scrambled egg whites with seven grain bread. “Here’s your decaf, here’s your skim,” she called out.

It was an ordinary exchange on an average February day, and yet it was one tinged with melancholy because, after 77 years in continuous operation, the last of what had once been eight separate Burger Heaven outposts in Manhattan will close on Feb. 28.

The reasons are mostly unsurprising, and yet, unlike at many other small businesses in the city, landlord greed is not one. The family that runs Burger Heaven also owns its building, as it had those in several other now shuttered locations.

Years ago, Evans Cyprus, the chain’s farseeing 94-year-old patriarch and founder, bought a variety of lunch counter outposts, where he installed the vinyl upholstered booths, chrome-edged Formica counters, swivel stools and clustered ranks of condiments that amount to an archetypal diner style.

Mr. Cyprus did his best to adapt with the times, adding healthier options to the Burger Heaven menus, turning a location near Saks Fifth Avenue into a diner cum bar. What he could not have anticipated — who could? — were the cultural shifts that would eventually supplant diners with food trucks or delivery services.

Dietary changes, too, hastened the demise: the contemporary consumer who is far more likely to thumb-tap an order for a Tingly Sweet Potato Kelp Bowl from Sweetgreen than to pull up to a Burger Heaven counter for the caloric depth charge that is a cheeseburger deluxe.

“Young people want grab-and-go,” said Dimitri Dellis, 61, and one of three family members responsible for a business that encompasses four generations. They no longer require a third place, that fixed geographical point in the triangle of daily destinations, after home and one’s job. For a generation raised on smartphones and laptops, the third place is anywhere you plop down.

Thus it has become an alien concept, the lunch counter as a regular social destination, a place where, as Astrid Dadourian, an editor and writer, said one recent morning at Burger Heaven, “you set your day, do some people watching, have some camaraderie, notice the guy who always sits at the counter and wears a hat.”

A scene like that, with its Edward Hopper associations, has come to seem as anachronistic as folding a print newspaper, something you saw once in a diorama or in a YouTube video.

Never mind that Jacqueline Kennedy Onassis regularly dined at the counter of Burger Heaven on East 53rd Street with her son, John F. Kennedy Jr., who played soldiers with the ranks of ketchup bottles, saltshakers and sugar canisters. Forget about socialites eating cheek by jowl with secretaries, bank heads alongside barbers.

This is where Barbara Walters consumed her regular rare burger, no bun, with a knife and fork. It is also where Holly Golightly regularly met Mr. O’Shaughnessy, the mobster Sally Tomato’s lawyer and bagman for her payoffs in “Breakfast at Tiffany’s.”

(There is debate over whether the joint in question was Burger Heaven or Hamburger Heaven, a competitor that opened in 1938 across the street from St. Patrick’s Cathedral, was later renamed Prime Burger and closed in 2012.)

What is the consequence of losing access to such places in a city where retail establishments are closing all the time and where many can cite lineages of beloved coffee shops long gone?

“New York can be cold, and a place like this makes you feel like you live in a village,” Kari Lichtenstein, a family lawyer, said last week, as she sat with her mother, Emilie Palef, a Toronto native first drawn here by the quirky stores and homey restaurants.

“We were on our way to another spot, and I said to my daughter, ‘I need tomato soup,’” Ms. Palef said, of how they had ended up at Burger Heaven that day.

With it she also got one of the hugs Ms. Morales serves up liberally to her customers, whose faces and orders and, frequently, troubles she seems to know by heart.

“A coffee shop is that place where they know what you like and if you don’t show up, they’re worried,” said Sarah Schulman, a New York-bred novelist raised above Romanoff, a venerable joint near Washington Square, educated in the ways of greasy spoons as a waitress at Leroy’s in TriBeCa and so strong a believer in link between these humble establishments and the engines of urbanism that coffee shops feature in two of her novels.

“When you homogenize a city, you destroy its feeling of urbanity,” Ms. Schulman said, referring to the banks and drugstores and chains retailers steadily wallpapering over the city’s indispensable quiddities. “When we lose businesses that are not chains, we lose specificity and difference.”

And heterogeneity is all but on the menu at Burger Heaven, where both the customers and the staff mirror the city’s diversity of race, ethnicity and class. “We have people working here who are from Mexico, Honduras, Venezuela, Panama, Senegal, Ghana, Nigeria, Ecuador, Bolivia and Poland, but they’re all Americans,” said the diner’s longtime manager, Sammy Hamido, who is of Egyptian origin.

More than the famous tuna salad sandwiches, made with pricey high-grade canned fish and none of the extenders a lot of places use to improve the bottom line, or the A-grade beef ground fresh on site or the Idaho potatoes peeled and cut fresh daily for Burger Heaven’s classic French fries, it is the democracy of the lunch counter that will be missed. New York, as E.B. White wrote in his most celebrated essay, does bestow upon its citizens the “gift of loneliness,” if you can call it that.

But it also offsets the fearful isolation of big cities with a measure of companionable privacy in public spaces, and a sense when you sit at Burger Heaven’s counter that your existence does not go unremarked.

In exchange for the noise and expense, the smells and the nuisance, the rats and the rest, we obtain this small pleasure: being both anonymous and known.

In all the years I’ve gone there I never learned Ms. Morales’s last name until being told Burger Heaven was closing. Nor did she know mine. To me, she was Yossy with the thousand-watt smile. To her, I was: “Hello, my love, what are you having? The usual?”

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NYT > Business > Entrepreneurship