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FTX Founder Arrested in the Bahamas, Faces Charges in U.S.; Winter Storm to Bring Blizzard Conditions and Tornadoes; Congress Expected to Avert Shutdown with Stopgap Bill; Argentina to Face Croatia in Semifinals; U.S. Expected to Announce Nuclear Fusion Breakthrough; U.S. Student has Gone Missing While Studying in France. Aired 4-4:30a ET

Aired December 13, 2022 - 04:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[04:00:00]

BIANCA NOBILO, CNN ANCHOR: Hello and a warm welcome to our viewers joining us in the United States and all around the world, I'm Bianca Nobilo.

MAX FOSTER, CNN ANCHOR: I'm Max Foster joining you live from London. Just ahead on CNN newsroom.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: His arrest initially has been very much celebrated by parts of the crypto community.

UNIDENTIFIED MALE: Millions of creditors and people who have invested, who've lost their money in FTX, they deserve to hear from Bankman- Fried.

UNIDENTIFIED MALE: That's the area that's going to pick up the snow and then all of a sudden this is going to transition into a severe weather event.

UNIDENTIFIED FEMALE: Know to be prepared, so lots of water, warm clothes, just in case we get stranded.

UNIDENTIFIED MALE: The transportation security administration is now scanning your face at select airport checkpoints.

UNIDENTIFIED MALE: We're already using it for our phones consistently. I mean, just about everybody is doing it.

(END VIDEO CLIP)

ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Bianca Nobilo.

FOSTER: It is Tuesday, December 13th, 9 a.m. here in London. 4 a.m. in Washington and the Bahamas where Sam Bankman-Fried, the founder of the failed crypto exchange FTX has been arrested and will appear in court later today. He was arrested at the request of the U.S. government which is expected to request his extradition. It's not known what charges he's facing. But federal prosecutors in New York will be unsealing an indictment in a few hours' time.

NOBILO: Meanwhile, the U.S. Securities and Exchange Commission announced it would be unveiling its own charges against Bankman-Fried as well. Because of his arrest, Bankman-Fried will no longer be appearing remotely before a House committee investigating the collapse of FTX. But House Financial Services Committee chair Maxine Waters says that she's committed to finding the truth.

The American public deserves to hear directly from Mr. Bankman-Fried about the actions that have harmed over 1 million people and wiped out the hard earned life savings of so many.

FOSTER: Bankman-Fried resigned as CEO of FTX last month on the same day the company declared bankruptcy after traders rushed to withdraw $6 billion from the platform in a period of 72 hours. Bankman-Fried is also facing a class action lawsuit from investors who accused him and FTX and endorsers like Tom Brady and Larry David of deceptive practices.

For more on this developing story we're joined by Matt Hussey. He is a journalist and founder of the crypto newsletter "Zero Knowledge." He joins us from London. Thank you so much for joining us. This actually happened much more quickly than people expected but it's not a massive surprise.

MATT HUSSEY, JOURNALIST: No, not a massive surprise at all. I think the size and scale of the collapse of FTX has prompted regulators to act much more swiftly than they have done historically when crypto companies have collapsed or been embroiled in fraud or criminality of any kind.

FOSTER: In terms of the specific allegations here, what do you understand them to be? Because there are so many different charges, he could face but what do you think is the primary one?

HUSSEY: Great question. He's facing obviously civil charges from the Securities and Exchange Commission. The recent revelations are criminal charges. I imagine those charges will have to do about misappropriation of customer funds and potential fraud.

NOBILO: And Matt, it's unclear how much money people who had invested will get back at the end of these bankruptcy proceedings. Do we have any indications of that?

HUSSEY: We don't. Sam Bankman-Fried took to Twitter just a few weeks ago to say he had managed to raise a significant amount of money to make customers whole, in his words, but he said he was falsely resigned which -- and he said the money that he had allegedly tried to raise was now off the table. So, it's very unclear how much they'll be left to reimburse customers who lost money. The balance sheet documents that we have seen suggest that it's fractions of a percent of how much the company was worth and how much the customer funds actually had on its books before it collapsed.

FOSTER: In terms of how the industry is feeling, obviously this has had a huge impact. A lot of investors have pulled out of crypto altogether. Are you confidence it has a future if this trial goes ahead effectively?

[04:05:00]

HUSSEY: I am. I wish (INAUDIBLE) nobody's in the room. But I think what it proves is that regulators are now starting to take the industry seriously, that regulation is needed. I think some of the block chains earliest proponents believe the technology was enough to allow the industry to not be regulated by third parties. I think now for crypto and blockchain, they cannot survive without regulation. So, I feel it's a good thing for consumers to have better regulations and better protections in place. I think it will slow down, you know, the skyrocketing numbers in growth, numbers we've seen in the front companies like FTX which went from zero to the second largest exchange in under three years. So, it'll curb innovation and the pace of change but you hope they make sure that consumers are better protected.

FOSTER: OK, Matt Hussey, will be following this story throughout the day. But thank you for your perspective ahead of all of the developments.

NOBILO: In the U.S. a winter storm is heading east after dumping snow in the western states.

NOBILO: Blizzard conditions will ramp up in the upper Midwest and Central Plains and more than 15 million Americans nationwide are under winter weather alerts.

NOBILO: To get the very latest let's check in with meteorologist Britley Ritz at the CNN Weather Center -- Britley.

BRITLEY RITZ, CNN METEOROLOGIST: Thank you, Bianca. Yes, we are definitely seeing snow yet this morning and even severe and strong storms stretching from parts of Nebraska down into north Texas. This whole system spins eastward and is going to cause quite the issue. Notice the ice across parts of North Dakota, back into southwest Minnesota and into northwest Iowa. Ice storm warnings are in effect. We are talking about picking up half an inch to roughly a quarter of an inch. Regardless, it's going to cause widespread power outages if that's the case.

Blizzard warnings also in effect for parts of the upper Midwest and back down into the Northern Plains. This is where we're picking up winds of 35 miles per hour over a three-hour period of time, dropping visibility down to a quarter of a mile or less.

Winds already strong. We had advisories in place for Iowa back into the Midwest and high wind warnings where we can expect wind gusts over 60 miles per hour at times. Not only that, but we're also focused on this here. Notice how the winds stay strong even when the snow stops, it doesn't take much. Visibilities will be wiped out for the next 24 to 48 hours.

Forecast snowfall totals picking up Pine Ridge here over 30 inches within just the next three days' time and that's across the Rockies. So higher peaks could pick up more. Look at this, Bald Hill Dam picking up already 1/10 of an inch of ice. And this is in north and South Dakota as of this morning with additional ice accumulation. We talked about quarter of an inch to half an inch here, you can see where it's going to fall. The purple showing you where we'll have the thicker ice. And again, it doesn't take much for widespread power outages, trees to go down and then of course, slick spots all over. So, travel not advised within the locations.

But within the warm sector, the area between the warm front and cold front, we have a lot of warm moist air coming in from the Gulf of Mexico. Windshear and of course the lift from the boundaries. So, you see that area highlighted in red traveling eastward. Right now, we are expecting this to come into play late tonight and into early Wednesday with an enhanced risk for severe weather.

What's that mean? Well, we have a greater risk of damaging winds as well as long lived strong tornadoes. So, we really have to pay attention to that. And on top of it, the threat for flooding picking up an additional 2 to 4 inches of rain -- Max, Bianca.

NOBILO: Britley Ritz, thank you.

FOSTER: Now the body of the prominent sports journalist Grant Wahl has been returned to the U.S. days after his sudden death at the World Cup in Qatar.

NOBILO: Wahl's manager tells CNN an autopsy is being completed and says his family is expected to provide a statement in the days ahead. Earlier the U.S. State Department said it had seen no indication of foul play regarding his death.

FOSTER: Wahl died Friday after collapsing at a match between Argentina and the Netherlands. He was just 49 years old.

NOBILO: We're standing by for the latest gauge of inflation in the United States. The Bureau of Labor Consumer Price Index report is due out today and it's expected to show inflation cooled from 7.7 percent in October to an estimated 7.3 percent in November. The Federal Reserve has been watching closely as they're set to meet on Wednesday. The U.S. central bank is expected to raise interest rates again to try and curb inflation.

FOSTER: The U.S. Congress expected to pass a stop-gap measure to fund the government and avoid a shutdown. The deadline is fast approaching and the matter could get pushed into the next Congress when Republicans will be in control of the House. The temporary measure is called the Continuing Resolution or a CR for short.

[04:10:00]

And CNN's chief Congressional correspondent Manu Raju has our report. But first, listen to the Republican and Democratic leaders in the Senate.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): Our Democratic colleagues have already spent two years massively, massively increasing domestic spending using party line reconciliation bills outside the normal appropriations process. So, clearly our colleagues cannot now demand even more, more domestic spending.

SEN. CHUCK SCHUMER (D-NY): Later this week members should be prepared to take quick action on a CR -- a one-week CR. I'm optimistic we could take action on a CR rather quickly and avoid the shutdown that neither side wants.

(END VIDEO CLIP)

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Now Congress is still struggling to get a deal to fund the federal government. This was something that should have been done, according to the deadline of September 30th. They couldn't get a deal to fund the entire federal government so they punted 12 appropriations bills to fund all federal agencies, punted that until this Friday creating a new deadline of this coming Friday but they are unable to meet that deadline as well.

So, Congress is expected to delay it for another week to give them more time to try to cut a large scale spending deal. The final number has not been decided yet. But it could be around the range of $1.75 trillion. If they do get an agreement on that large bill, it would be unveiled and likely be pushed through Congress in a matter of days giving lawmakers very little time to review it.

Now if they don't get a bill on that big bill, that means it will likely be punted into the new Congress. That will be a whole new power dynamic on Capitol Hill. Republicans will control the House. Democrats have a narrow majority in the Senate. It's uncertain still who will be next speaker of the house. Kevin McCarthy is pushing to do just that. But he will have a narrow majority in the new Republican House -- 222 seats. You need 218 votes to pass legislation. And the question will be if they just punt it into next year getting this conference on board behind something that they are divided over, as well as getting agreement between the Senate Democrats and the Democrat in the White House, all raising major questions about whether they can get there.

Which is why there is an enormous push to get this done this year. Get this done in the final weeks of this year. Get an agreement that would include all funding not just for the Pentagon and key agencies like that, but also funding for Ukraine, $37 billion to fund the effort in Ukraine. As well as policy issues such as overhaul the Electoral Count Act which would be aimed to prevent another January 6th.

So, can they get there? It's still an open question as lawmakers struggle to get a deal after months of talks.

Manu Raju, CNN, Capitol Hill.

(END VIDEOTAPE)

FOSTER: U.S. President Joe Biden will be signing the Respect For Marriage Act into law today. It grants federal protections to same-sex and interracial couples requiring all states to recognize marriage performed in other states.

NOBILO: The White House says a celebration will be held on the South Lawn for the signing with musical performances and thousands of guests in attendance.

Georgia's Secretary of State Brad Raffensperger has been subpoenaed by special counsel Jack Smith as part of the investigation into Donald Trump's efforts to stay in power.

FOSTER: Raffensperger could prove to be a compelling witness in the case. You'll recall early last year he resisted pressure from Trump to, quote, find enough votes to overturn the 2020 presidential election.

NOBILO: Earlier this year Raffensperger also testified to the January 6th House Select Committee about the threats that he received after standing up to Trump.

Ahead on CNN, the family of an American student studying in France says he hasn't been heard from in weeks and now they fear the worst. We'll have details on his disappearance.

FOSTER: Plus, a scientific breakthrough that could fuel the future. How nuclear fusion works and when it might be available for widespread use.

NOBILO: And Messi continues his quest for a World Cup title but he faces a tough test against Croatia in the semifinals. Amanda Davies is in Qatar with the preview.

AMANDA DAVIES, CNN WORLD SPORT: Good morning. Yes, there has been a whole lot of talk about fate playing a part in this tournament for Argentina, but Croatia are not interested in that as we saw against Brazil. I've got all the latest ahead of the first semifinal in just a couple of minutes. See you soon.

[04:15:00]

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NOBILO: We're now just a few hours away from the first match of World Cup semifinals. Croatia is the most recent runner up will play Argentina which is looking for its third title overall and its first with Lionel Messi at the helm. I'm trying to read in an unbiased tone.

FOSTER: You are wearing Argentinian colors. Let's get more from CNN's Amanda Davies who is at the center of the action in Doha. I got her there, did night.

NOBILO: I've got a Croatian scarf upstairs.

DAVIES: I'm disappointed in you, Bianca. I was hoping that there would be an extra addition for this morning.

FOSTER: A hat or something. DAVIES: Yes, exactly. We'll wait and see what tomorrow brings. If you

want to talk about the gulf in history between these two sides, the last time Argentina won the World Cup in 1986 Croatia wasn't even recognized as a footballing nation. That only happens in 1992, a year after they won independence.

And this is just Croatia's fifth appearance at a World Cup finals versus Argentina having made it to the finals on five occasions prior to this. The this is kind of what we're talking about heading into this match. And it's made all the more remarkable given Croatia, a country with a population of just less than 4 million people. And for all the talk of similarities that this current crop of players to the one who reached the final four years ago in 2018. Actually, it's on the whole a very different sort of young players. But they've been bred in the same form with the same technicalities that were used from this Croatian team.

[04:20:00]

And it's for that reason that talk of a Croatian victory against this Argentina outfit tonight, an Argentina team who've lost just one game in 41 matches . I's the talk of that that their coach Zlatko Dalic is suggesting that victory this evening would be Croatia's greatest ever footballing achievement.

(BEGIN VIDEO CLIP)

ZLATKO DALIC, CROATIA COACH (through translator): I tell the players to enjoy football because there is no success, no results if you don't enjoy your job. Each of us who does our job must enjoy it and must be happy in the job, and my players are. The players of the Croatian squad are happy. We train with great joy as well as in all our preparations, meetings and matches. And tomorrow, I will tell them to enjoy football.

(END VIDEO CLIP)

DAVIES: Croatia, of course, aiming for a second straight final after a World Cup. And I was surrounded by Argentina fans as they were cheering Croatia on as they beat Brazil in the quarterfinal.

But now you suspect maybe a few more nerves would have crept in amongst the Argentinian fans, particularly because it was Croatia who beat Argentina 3-0 four years ago at the World Cup in Russia. But what Argentina have in their favor is this talk of fate and what this tournament means for Lionel Messi. So much talk of this is his year to win this one major trophy he's never won. Their defender Nicolas Tagliafico saying they have a special feeling. They have the boost of Lionel Messi in their team. But we wait and see. We know that football doesn't always go as planned and there's a whole lot of people who will be supporting Croatia and hoping they knock out Messi and Argentina and end that famous run.

FOSTER: Amanda, thank you so much. That's what you want to do, you want to end Messi's run without winning the World Cup.

NOBILO: Yes, I mean I believe we make our own fate. As we will Wednesday.

FOSTER: Amanda, thank you. Going to be a great game anyway.

Now to a great breakthrough that could eventually help end the world's dependence on fossil fuels.

NOBILO: The U.S. Energy Department is set to announce scientists in California have successfully produced the nuclear fusion reaction which produce more energy than it consumed. It's that same process that powers the sun.

FOSTER: It's different from fission, I'm an expert on all of this.

NOBILO: Yes, you are.

FOSTER: Which is how existing nuclear reactors work. And fusing atoms doesn't produce volatile radioactive waste. And as CNN's Rene Marsh reports, there's a catch.

(BEGIN VIDEOTAPE)

RENE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: Well, scientists at a Department of Energy lab in California have figured out how to success produce a nuclear fusion reaction with a net energy gain. That means they've succeeded in taking two hydrogen atoms and using 192 powerful lasers to force those atoms to fuse together unleashing the same kind of energy that powers the sun and stars.

Until now that has been incredibly difficult to replicate here on earth. The key is though that they've been able to release more energy from the reaction than they use in the fusion process itself and that's critically important. For anything to be a viable source it needs to have a higher energy output than the energy input used to generate the power.

So, this is huge moment, mostly because the discovery could eventually unlock an unlimited cheap, clean power source for the world. Now this discovery has also proved this is a viable energy source and no longer a hypothetical scenario. But as major as this is, in the quest to pivot away from dirty energy sources, like fossil fuels, we are still a far way off from powering our homes by way of nuclear fusion. It's estimated it could take two, even three decades before this energy source is widely used.

Rene Marsh, CNN, Washington.

(END VIDEOTAPE)

FOSTER: The governor of Alabama has banned TikTok from all state owned devices and networks. She says the social media app poses a security threat from China claiming, quote, the evidence speaks for itself. The governor also admits she's never used the mobile app. South Dakota's governor signed a similar executive order in November.

Now Twitter is disbanding its "trust and safety council." This according to an email obtained by CNN. The move comes as Twitter owner Elon Musk is undoing many of the policies put into place before he took over the social media giant. The council was meant to address hate speech, child exploitation and other issues. Three members of the council resigned in protest last week writing in a statement that, quote, contrary to claims by Elon Musk, the safety and well-being of Twitter's users are on the decline.

Meanwhile, Twitter is bringing back the blue check marks. The coveted option is again available for those who paid for Twitter subscription service.

[04:25:00]

You'll recall, the company had to pull the feature last month after a wave of supposedly verified accounts started popping up impersonating well-known brands and famous users. The new service will cost either $8 or $11 a month, depending on how you subscribe. Which is extraordinary, isn't it, that they're coming back.

NOBILO: An investigation has been open into the disappearance of an American college student studying in France. The parents of Kenny DeLand Jr. say that they haven't heard from their son in more than two weeks and that they fear the worst. CNN's Melissa Bell reports.

(BEGIN VIDEOTAPE)

CAROL LAWS, SON WENT MISSING IN FRANCE: He was looking forward to coming home for Christmas.

MELISSA BELL, CNN CORRESPONDENT (voice-over): Kenny DeLand, Jr., a college senior from upstate New York who is studying abroad in France, hasn't been heard from in more than two weeks, according to his family.

KENNETH DELAND, SON WENT MISSING IN FRANCE: We're waiting, we're worried. We don't know what -- you know, where he is.

BELL (voice-over): This is DeLand, caught on a store security camera December 3rd and the last known footage of him. A missing person's report was filed getting local police involved when he didn't return to his host family or show up for classes.

LAWS: I haven't heard anything from them.

BELL (voice-over): That store DeLand was seen at is about an hour's train ride south of the University of Grenoble Alps where he was studying. A Grenoble prosecutor confirmed to CNN that DeLand appeared to leave school of his own accord, adding --

The young man reportedly told several people that he had arrived in France under-prepared and was having difficulty making friends. He also mentioned that he wanted to go to Marseille before leaving for the United States.

LAWS: I feel like I'm not really receiving any information. It's been very difficult. You know, we've been -- really, someone else has been stuck in the middle to do the speaking for us.

BELL (voice-over): DeLand's school back in the U.S., St. John Fisher University, released a statement saying the college will continue to do all it can to assist in the investigation to find Kenneth DeLand.

But now the 22-year-old's family is asking for the community's help.

DELAND: We just shake our heads. We don't understand why he's not reaching out to us.

BELL (voice-over): His parents say they last heard from him on November 27th and his mother is worried he could be in danger.

LAWS: When you don't know, you just don't know. We've haven't heard from him.

BELL (voice-over): They set up findkendeland.com, asking the public if they've seen him, stating: We fear the worst and want him to be located.

DELAND: Kenny, he's a real good kid.

BELL (voice-over): The State Department told CNN it is, aware of reports of a U.S. citizen missing in France. We stand ready to provide appropriate assistance to U.S. citizens in need and to their families.

But DeLand's parents' message for their son is --

DELAND: We love you. And we hope you can --

LAWS: We're waiting to hear from you and we're waiting for you to come home.

DELAND: Exactly.

BELL (voice-over): Melissa Bell, CNN, Paris.

(END VIDEOTAPE)

FOSTER: Still ahead on CNN NEWSROOM, leave no man behind. What the Biden administration says it's doing to secure the release of U.S. Marine veteran Paul Whelan still imprisoned in Russia.

NOBILO: Plus, the Israeli military says the shooting death of a Palestinian teen was unintentional. But her family believes it wasn't an accident. We're live from Jerusalem with more reaction.

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