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Government

Why California's EV-Rebate Proposition Lost (kron4.com) 122

California's EV-funding proposition 30 "has suffered an unambiguous defeat," reports Bay City News.

The measure would've increased taxes by 1.75% on income above $2 million a year (for roughly 43,000 California multimillionaires) to fund electric car rebates and combat wildfires. "In the statewide vote count as of late Wednesday, 59% rejected the proposal."

So what happened? Before the election the New York Times described the fight: On one side, environmentalists have teamed up with firefighters, Democrats and Lyft, the ride-share company, which has poured more than $45 million into its campaign to pass a climate initiative. On the other, [Democrat] Governor Gavin Newsom has aligned himself with California billionaires, teachers and Republicans in opposition....

Proponents say the measure would raise money from those who can afford it to fund critical state mandates on electric vehicle sales and ride-share miles that have been highly promoted but not fully funded. Opponents argue it would require taxpayers to foot the bill for electric vehicle subsidies that Uber and Lyft would eventually have to pay for on their own. In August, California regulators voted to ban the sale of all gasoline-powered cars in the state by 2035, which was hailed by environmentalists — and by Newsom — as a significant step in combating climate change. Last year, the state implemented an even earlier standard for ride-share companies like Lyft and Uber: 90 percent of ride-share drivers' miles will have to be in electric vehicles by 2030.

Left out of those mandates was an explanation of who would be expected to pay for the switch to greener cars.... The opposition to the measure, which includes some of the wealthy individuals who would have to pay more in taxes and business groups opposed to tax increases, argues that the proposal benefits corporations, because Uber and Lyft would eventually have to comply with the new state electric vehicle mandates and would have to cough up the money to do so on their own, most likely by offering subsidies for their drivers to buy battery-powered cars.

The "no" campaign got a huge boost over the summer from Newsom, who, despite his focus on fighting climate change, has emerged as its highest-profile opponent and appeared in an television advertisement attacking Lyft in September. "Prop. 30 is being advertised as a climate initiative," Newsom says in the ad as he strolls across the screen. "But in reality, it was devised by a single corporation, to funnel state income taxes to benefit their company."

Currently Lyft's gig workers use their own cars — but was the opposition looking ahead to a future where Lyft owns its own fleet of self-driving (and electric) robo-taxis?

In any case, Proposition 30 "was among the country's top five ballot measures this Election Day in terms of total contributions," reports Axios, "with nearly $73 million spent by parties on either side, per Ballotpedia. The results "are an unfortunate setback for the climate movement," Lyft — which spent about $45 million supporting Prop 30 — said in a statement Wednesday.

On the other side of the country, Massachusetts voters approved a new 4% tax on those making more than $1 million for transportation and education funding, broadly speaking. And New Yorkers OK'd $4.2 billion in bond sales to fund climate change mitigation and resiliency programs.

Electronic Frontier Foundation

Aaron Swartz Day Commemorated With International Hackathon (eff.org) 27

Long-time Slashdot reader destinyland shares this announcement from the EFF's DeepLinks blog:

This weekend, EFF is celebrating the life and work of programmer, activist, and entrepreneur Aaron Swartz by participating in the 2022 Aaron Swartz Day and Hackathon. This year, the event will be held in person at the Internet Archive in San Francisco on Nov. 12 and Nov. 13. It will also be livestreamed; links to the livestream will be posted each morning.

Those interested in attending in-person or remotely can register for the event here.

Aaron Swartz was a digital rights champion who believed deeply in keeping the internet open. His life was cut short in 2013, after federal prosecutors charged him under the Computer Fraud and Abuse Act (CFAA) for systematically downloading academic journal articles from the online database JSTOR. Facing the prospect of a long and unjust sentence, Aaron died by suicide at the age of 26....

Those interested in working on projects in Aaron's honor can also contribute to the annual hackathon, which this year includes several projects: SecureDrop, Bad Apple, the Disability Technology Project (Sat. only), and EFF's own Atlas of Surveillance. In addition to the hackathon in San Francisco, there will also be concurrent hackathons in Ecuador, Argentina, and Brazil. For more information on the hackathon and for a full list of speakers, check out the official page for the 2022 Aaron Swartz Day and Hackathon.

Speakers this year include Chelsea Manning and Cory Doctorow, as well as Internet Archive founder Brewster Kahle, EFF executive director Cindy Cohn, and Creative Commons co-founder Lisa Rein.
The Courts

Prosecutors Seek 15-Year Prison Sentence for Theranos' Elizabeth Homes, $800M Restitution (theguardian.com) 112

"Federal prosecutors are asking a judge to sentence Elizabeth Holmes to 15 years in prison," reports the Guardian, "and require the Theranos founder to pay $800m in restitution, according to court documents filed on Friday." A jury found Holmes guilty in January of four counts of investor fraud and conspiracy. Her sentencing is scheduled for 18 November, and she faces a maximum 20 years in prison. Prosecutors argued that "considering the extensiveness of Holmes's fraud", their recommended sentencing would "reflect the seriousness of the offenses, provide for just punishment for the offenses, and deter Holmes and others".

Holmes's lawyer argued in documents filed on Thursday that the ex-Theranos boss should not be sentenced to prison at all and, at most, should receive 18 months of house arrest. The court filings argued that Holmes had been made a "caricature to be mocked and vilified" by the media over the years, though she is a caring mother and friend.

"Ms Holmes is no danger to the public," Holmes's lawyer said in the court documents. "She has no criminal history, has a perfect pretrial services compliance record, and is described by the people who know her repeatedly as a gentle and loving person who tries to do the right thing."

United States

How Close Was America's FBI to Deploying Pegasus Spyware? (yahoo.com) 47

In a statement in February, America's Federal Bureau of Investigation "confirmed that it obtained NSO Group's powerful Pegasus spyware" back in 2019, reported the Guardian. At the time the FBI added that "There was no operational use in support of any investigation, the FBI procured a limited licence for product testing and evaluation only."

"But dozens of internal F.B.I. documents and court records tell a different story," the New York Times reported today: The documents, produced in response to a Freedom of Information Act lawsuit brought by The New York Times against the bureau, show that F.B.I. officials made a push in late 2020 and the first half of 2021 to deploy the hacking tools — made by the Israeli spyware firm NSO — in its own criminal investigations. The officials developed advanced plans to brief the bureau's leadership, and drew up guidelines for federal prosecutors about how the F.B.I.'s use of hacking tools would need to be disclosed during criminal proceedings. It is unclear how the bureau was contemplating using Pegasus, and whether it was considering hacking the phones of American citizens, foreigners or both. In January, The Times revealed that F.B.I. officials had also tested the NSO tool Phantom, a version of Pegasus capable of hacking phones with U.S. numbers.

The F.B.I. eventually decided not to deploy Pegasus in criminal investigations in July 2021, amid a flurry of stories about how the hacking tool had been abused by governments across the globe. But the documents offer a glimpse at how the U.S. government — over two presidential administrations — wrestled with the promise and peril of a powerful cyberweapon. And, despite the F.B.I. decision not to use Pegasus, court documents indicate the bureau remains interested in potentially using spyware in future investigations. "Just because the F.B.I. ultimately decided not to deploy the tool in support of criminal investigations does not mean it would not test, evaluate and potentially deploy other similar tools for gaining access to encrypted communications used by criminals," stated a legal brief submitted on behalf of the F.B.I. late last month....

The specifics of why the bureau chose not to use Pegasus remain a mystery, but American officials have said that it was in large part because of mounting negative publicity about how the tool had been used by governments around the world.

The Times also notes two responses to their latest report. U.S. Senator Ron Wyden complained the FBI's earlier testimony about Pegasus was incomplete and misleading, and that the agency "owes Americans a clear explanation as to whether the future operational use of NSO tools is still on the table."

But an F.B.I. spokeswoman said "the director's testimony was accurate when given and remains true today — there has been no operational use of the NSO product to support any FBI investigation."

Thanks to long-time Slashdot reader crazyvas for suggesting the story.
Iphone

Apple Sued for Allegedly Deceiving Users With Privacy Settings (gizmodo.com) 34

"Apple is facing a class action lawsuit for allegedly harvesting iPhone user data even when the company's own privacy settings promise not to," reports Gizmodo: The suit, filed Thursday in California federal court, comes days after Gizmodo exclusively reported on research into how multiple iPhone apps send Apple analytics data, regardless of whether the iPhone Analytics privacy setting is turned on or off. The problem was spotted by two independent researchers at the software company Mysk, who found that the Apple App Store sends the company exhaustive information about nearly everything a user does in the app, despite a privacy setting, iPhone Analytics, which claims to "disable the sharing of Device Analytics altogether" when switched off.

Gizmodo asked the researchers to run additional tests on other iPhone apps, including Apple Music, Apple TV, Books, and Stocks. The researchers found that the problem persists across most of Apple's suite of built-in iPhone apps....

[I]n the tests, turning the iPhone Analytics setting off had no evident effect on the data collection, nor did any of the iPhone's other built-in settings meant to protect your privacy from Apple's data collection. Mysk's tests on the App Store found that Apple receives that data along with details that can identify you and your device, including ID numbers, what kind of phone you're using, your screen resolution, your keyboard languages and how you're connected to the internet — the kind of information commonly used for device fingerprinting.

Australia

After Ransomware Gang Releases Sensitive Medical Data, Australia Vows Consequences (sbs.com.au) 58

Last week Australia's bigest health insurer, Medibank, said that data on all 4 million of its customers was breached. Now the group behind that breach "have since released more sensitive details of customers' medical records on the dark web, including data on abortions and alcohol issues," reports Australia's public broadcaster.

Their article points out that the release "follows Medibank's refusal to pay a ransom for the data, with almost 500,000 health claims stolen, along with personal information." But what's really interesting is that article's headine:

" 'Hunt down the scumbags': Australian government to 'hack the hackers' behind Medibank breach" The Australian government is going to "hunt down the scumbags" responsible for the Medibank hack that compromised the private information of nearly 10 million customers, cyber security minister Clare O'Neil said.... "Around 100 officers around these two organisations will be a part of this joint standing operation, and many of these officers will be physically co-located from the Australian Signals Directorate," she said. Ms. O'Neil said the officers will "show up to work every day" with the "goal of bringing down these gangs and thugs".

"This is the formalisation of a partnership — a standing body within the Australian government which will day in, day out, hunt down the scumbags who are responsible for these malicious crimes against innocent people," she said. "The smartest and toughest people in our country are going to hack the hackers...."

Australian Federal Police Commissioner Reece Kershaw on Friday said officers were also working with Interpol to track down the criminals. "We know who you are," he said. "The AFP has some significant runs on the scoreboard when it comes to bringing overseas offenders back to Australia to face the justice system."

One Australian think tank told the Associated Press that the breach was caused by a stolen username and password, sold on a Russian dark web forum. "In a tweet, Australian Prime Minister Anthony Albanese, whose own Medibank data was stolen, said the Australian Federal Police knows where the hackers are and are working to bring them to justice," reports TechCrunch: The cybercriminals claimed that they initially sought $10 million in ransom from Medibank before reducing the sum to $9.7 million, or $1 per affected customer, the blog said. "Unfortunately, we expect the criminal to continue to release stolen customer data each day," Medibank CEO David Koczkar said on Friday. "These are real people behind this data and the misuse of their data is deplorable and may discourage them from seeking medical care."
Thanks to long-time Slashdot reader schwit1 for sharing the story.
Crime

FTX Crypto Wallets See Mysterious Late-Night Outflows Totalling More than $380M (coindesk.com) 59

More than $380 million in crypto left bankrupt crypto company FTX's wallets late Friday, with little clear explanation as to why. CoinDesk: According to on-chain data, various Ethereum tokens, as well as Solana and Binance Smart Chain tokens have exited FTX's official wallets and moved to decentralized exchanges like 1inch. Both FTX and FTX US appear to be affected. FTX US general counsel Ryne Miller tweeted that he was "investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges."

The transfers, which have not been addressed officially by FTX leadership, come on the same day that the firm officially filed for Chapter 11 bankruptcy protection after apparently losing billions of dollars in user funds. Many FTX wallet holders are also reporting that they are seeing $0 balances in their FTX.com and FTX US wallets.
There are indications that FTX may have been hacked.

At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, Reuters reported separately. From the report: The exchange's founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried's trading company Alameda Research, the people told Reuters. A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.
Piracy

Italy's Biggest TV Piracy Network Dismantled (reuters.com) 17

Italy's police said on Friday they had dismantled the country's largest network for online TV piracy, one that accounted for 70% of illegal streaming across the nation. From a report: The network had more than 900,000 users and yielded "millions of euros" in monthly profits, a police statement said. As part of the operation, premises were searched and material seized in more than 20 cities up and down the country, including Rome, Naples and Catania, the statement added. The raids were ordered by prosecutors in Catania, Sicily, who were due to give more details in a press conference later on Friday.
Programming

NSA Urges Organizations To Shift To Memory Safe Programming Languages (nsa.gov) 196

In an press release published earlier today, the National Security Agency (NSA) says it will be making a strategic shift to memory safe programming languages. The agency is advising organizations explore such changes themselves by utilizing languages such as C#, Go, Java, Ruby, or Swift. From the report: The "Software Memory Safety" Cybersecurity Information Sheet (PDF) highlights how malicious cyber actors can exploit poor memory management issues to access sensitive information, promulgate unauthorized code execution, and cause other negative impacts. "Memory management issues have been exploited for decades and are still entirely too common today," said Neal Ziring, Cybersecurity Technical Director. "We have to consistently use memory safe languages and other protections when developing software to eliminate these weaknesses from malicious cyber actors."

Microsoft and Google have each stated that software memory safety issues are behind around 70 percent of their vulnerabilities. Poor memory management can lead to technical issues as well, such as incorrect program results, degradation of the program's performance over time, and program crashes. NSA recommends that organizations use memory safe languages when possible and bolster protection through code-hardening defenses such as compiler options, tool options, and operating system configurations.
The full report is available here (PDF).
Biotech

Police Use DNA Phenotyping To Limit Pool of Suspects To 15,000 (vice.com) 50

An anonymous reader quotes a report from Motherboard: The Queensland, Australia police have used DNA phenotyping for the first time ever in hopes of leading to a breakthrough for a 1982 murder. The department partnered with a U.S.-based company called Parabon NanoLabs to create a profile image of the murder suspect, a Caucasian man with long blonde hair. Police claim that this image was generated using blood samples found at the scene of the murder of a man from 40 years ago; according to the Australian Broadcasting Corporation this is the first time "investigative genetic genealogy" has been used in Queensland.

This image does not factor in any environmental characteristics, such as tattoos, facial hair, and scars, and cannot determine the age or body mass of the suspect. However, Queensland investigators have published the image online and are offering a $500,000 reward and indemnity from prosecution to anyone who might have information about the suspect. The image is a vague rendering of a man that does not provide any more information than the sketch that the department already has of the suspect. This further perpetuates the hyper-surveillance of any man who resembles the image. Parabon NanoLabs has already been criticized by criminal justice and privacy experts for disseminating images that implicate too broad a pool of suspects.

The Queensland police department said that the DNA sample from the case generated a genealogy tree of "15,000 'linked' individuals" and they have not been able to find a close match yet. Instead of facing the possibility that DNA phenotyping may not be an effective tool for narrowing down a suspect, the police department's strategy is to ask the public for their DNA samples. Criminologist Xanthe Mallett said in a press release that to help police find a match, people can "opt-in" to share their own DNA samples with investigators through DNA services such as Family Tree and GEDMatch.
"Many members of the public that see this generated image will be unaware that it's a digital approximation, that age, weight, hairstyle, and face shape may be very different, and that accuracy of skin/hair/eye color is approximate," said Callie Schroeder, the Global Privacy Counsel at the Electronic Privacy Information Center.
Privacy

Mysterious Company With Government Ties Plays Key Internet Role (washingtonpost.com) 67

whoever57 writes: Would you trust your communications to a company that has links to a spyware company and claims that its address is a UPS store in Toronto? You probably already do. Washington Post reports: An offshore company that is trusted by the major web browsers and other tech companies to vouch for the legitimacy of websites has connections to contractors for U.S. intelligence agencies and law enforcement, according to security researchers, documents and interviews. Google's Chrome, Apple's Safari, nonprofit Firefox and others allow the company, TrustCor Systems, to act as what's known as a root certificate authority, a powerful spot in the internet's infrastructure that guarantees websites are not fake, guiding users to them seamlessly.

The company's Panamanian registration records show that it has the identical slate of officers, agents and partners as a spyware maker identified this year as an affiliate of Arizona-based Packet Forensics, which public contracting records and company documents show has sold communication interception services to U.S. government agencies for more than a decade. One of those TrustCor partners has the same name as a holding company managed by Raymond Saulino, who was quoted in a 2010 Wired article as a spokesman for Packet Forensics. Saulino also surfaced in 2021 as a contact for another company, Global Resource Systems, that caused speculation in the tech world when it briefly activated and ran more than 100 million previously dormant IP addresses assigned decades earlier to the Pentagon. The Pentagon reclaimed the digital territory months later, and it remains unclear what the brief transfer was about, but researchers said the activation of those IP addresses could have given the military access to a huge amount of internet traffic without revealing that the government was receiving it.
whoever57 has also shared a unpaywalled link to the story.
Privacy

Egypt's COP27 Summit App is a Cyber Weapon, Experts Warn (politico.eu) 28

Western security advisers are warning delegates at the COP27 climate summit not to download the host Egyptian government's official smartphone app, amid fears it could be used to hack their private emails, texts and even voice conversations. From a report: Policymakers from Germany, France and Canada were among those who had downloaded the app by November 8, according to two separate Western security officials briefed on discussions within these delegations at the U.N. climate summit.

Other Western governments have advised officials not to download the app, said another official from a European government. All of the officials spoke on the condition of anonymity to discuss international government deliberations. The potential vulnerability from the Android app, which has been downloaded thousands of times and provides a gateway for participants at COP27, was confirmed separately by four cybersecurity experts who reviewed the digital application for POLITICO. The app is being promoted as a tool to help attendees navigate the event. But it risks giving the Egyptian government permission to read users' emails and messages. Even messages shared via encrypted services like WhatsApp are vulnerable, according to POLITICO's technical review of the application, and two of the outside experts.

United States

US Launches Carbon Offset Program To Help Developing Countries Speed Clean Energy Transition (cnbc.com) 59

U.S. Climate Envoy John Kerry on Wednesday unveiled a carbon offset plan that would allow corporations to fund renewable energy projects in developing countries that are struggling to transition away from fossil fuels. CNBC reports: The program, called the Energy Transition Accelerator, is in partnership with philanthropic groups like the Rockefeller Foundation and the Bezos Earth Fund and will be finalized over the coming year. Officials argue it could funnel billions of dollars from the private sector into the economies of developing countries working to shift to renewable power sources like wind or solar. The plan will create a new class of carbon offsets that represent investments in projects that help accelerate renewable energy projects or build climate change resilience in a developing country. Businesses can buy these offsets to balance out some portion of their CO2 emissions, and the money will go to these projects.

Chile and Nigeria are among the developing countries interested in the program, the State Department said, and Bank of America, Microsoft, PepsiCo and Standard Chartered Bank have "expressed interest in informing the ETA's development." [...] In order to buy these credits under the new program, companies must commit to achieve net-zero emissions by 2050 and report annually on emissions as well as progress toward the target, according to a draft of the plan. Fossil fuel companies are also not allowed to participate in the program. But several major environmental groups said they are not supporting the plan, arguing the proposal lacked details and could ultimately undermine efforts to reduce global emissions.
"Carbon offsets are not an answer in a world already on fire, under water and facing mounting climate losses and damage," said Rachel Cleetus, policy director with the climate and energy program at the Union of Concerned Scientists. "A voluntary carbon credit program won't guarantee deep, real cuts in emissions -- it's tantamount to rearranging the deck chairs as the climate ship is going down."
Piracy

Court Upholds Piracy Blocking Order Against Cloudflare's 1.1.1.1 DNS Resolver 101

The Court of Rome has confirmed that Cloudflare must block three torrent sites through its public 1.1.1.1 DNS resolver. The order applies to kickasstorrents.to, limetorrents.pro, and ilcorsaronero.pro, three domains that are already blocked by ISPs in Italy following an order from local regulator AGCOM. TorrentFreak reports: Disappointed by the ruling, Cloudflare filed an appeal at the Court of Milan. The internet infrastructure company doesn't object to blocking requests that target its customers' websites but believes that interfering with its DNS resolver is problematic, as those measures are not easy to restrict geographically. "Because such a block would apply globally to all users of the resolver, regardless of where they are located, it would affect end users outside of the blocking government's jurisdiction," Cloudflare recently said. "We therefore evaluate any government requests or court orders to block content through a globally available public recursive resolver as requests or orders to block content globally." At the court of appeal, Cloudflare argued that DNS blocking is an ineffective measure that can be easily bypassed, with a VPN for example. In addition, it contested that it is subject to the jurisdiction of an Italian court.

Cloudflare's defenses failed to gain traction in court and its appeal was dismissed. DNS blocking may not be a perfect solution, but that doesn't mean that Cloudflare can't be compelled to intervene. [...] Cloudflare believes that these types of orders set a dangerous precedent. The company previously said that it hadn't actually blocked content through the 1.1.1.1 Public DNS Resolver. Instead, it implemented an "alternative remedy" to comply with the Italian court order.
The Courts

Antitrust Lawsuit Says Apple and Amazon Colluded To Raise iPhone, iPad Prices (hbsslaw.com) 32

A new antitrust class-action lawsuit accuses Apple and Amazon of colluding to raise the price of iPhones and iPads, according to Hagens Berman, the law firm representing consumers against two of the world's largest companies in today's filing. From a report: The lawsuit, filed in the U.S. District Court for the Western District of Washington accuses Apple and Amazon of seeking to eliminate third-party Apple resellers on Amazon Marketplace in a scheme to stifle competition, and maintain premium pricing for Apple products. The class action alleges an "unlawful horizontal agreement between Apple and Amazon to eliminate or at least severely reduce the competitive threat posed by third-party merchants," which attorneys say violates federal antitrust laws and has cost consumers.

The lawsuit says the parties' illegal agreement brought the number of third-party sellers of Apple products on Amazon Marketplace from roughly 600 to just seven sellers -- a loss of 98%, and by doing so, Amazon, which was formerly a marginal seller of Apple products, became the dominant seller of Apple products on Amazon Marketplace. The consumer-rights law firm behind the filing has bested Apple in multiple antitrust lawsuits, including a $400 million settlement related to price-fixing of e-books and a $100 million settlement on behalf of iOS developers harmed by App Store policies. Hagens Berman has also brought multiple pending antitrust cases against both defendants.

Google

Google is Bringing Its VPN To Mac and Windows PCs (theverge.com) 35

Google is bringing its VPN access to desktop today. Google One subscribers on Premium plans (2TB or higher) can now download VPN apps for Windows and macOS, allowing users in 22 countries to mask their IPs on desktop and reduce online trackers. From a report: While Google is expanding its VPN service, it still comes with the same restrictions as Android and iOS. You'll only be able to use the service in one of the supported countries, and you won't be able to use Google's VPN freely to avoid geo-restrictions on live sports or other streaming video. Much like Apple's iCloud Plus VPN service, the Google One VPN won't let you assign an IP address from a different country manually. Instead, Google assigns you an IP in the region you're connecting from.
Bitcoin

America's Slow-Moving, Confused Crypto Regulation Is Driving Industry Out of US (arstechnica.com) 74

An anonymous reader quotes an excerpt from an Ars Technica article: In the United States, the lack of regulatory clarity threatens to slow down not just mainstream adoption of new technologies but also innovation in digital payment options, potentially cutting off consumers and businesses nationwide from sought-after conveniences, simply because regulators can't keep up with how digital assets are being used today. "There has to be some clarity that comes out, some standards, some ideas of the dos and the don'ts and some structure around it," said May Zabaneh, PayPal's vice president of product in blockchain, crypto, and digital currencies during a Money 20/20 session focused on how people use crypto to make digital payments. "Otherwise, that mainstream adoption will really be inhibited." According to Zabaneh, digital payment processors need government agencies to ensure much more stability before the companies can confidently "explore the potential" of using digital assets like stablecoins or central bank digital currencies to provide alternative payment options in e-commerce. She said that even though PayPal has a responsibility to continue innovating in digital payments, efforts can become stalled because "there needs to be more clarity around regulation," particularly regulations around consumer protection and the tax implications of using digital assets. These are areas US agencies have only just begun considering, and that's holding innovation back. "In order for things to become mainstream, they have to be easily accessible, easily adoptable," she said.

Zabaneh was not alone in calling for regulatory clarity to drive innovation. Executives from other payment processors like Checkout.com, cryptocurrency exchange platforms like Coinbase, and banks like JPMorgan Chase all repeated the same call in their sessions, warning that US fears over digital assets involved in financial crimes created hard-to-navigate compliance risks for those most invested in driving innovation. The executives said the US is moving so slowly in passing laws and establishing rules that industry leaders will start to conduct business elsewhere. Experts at Money 20/20 said this is already happening. The US wants to be on the leading edge of digital currencies, but tension remains between what President Joe Biden wrote in an executive order this year concerning the country's economic "interest in responsible financial innovation" and the wide-ranging security risks, including those to consumers and businesses, as well as to national security. To keep fintech leaders doing business in the US and participating in what's become a trillion-dollar market, Tufts University cybercrime expert Josephine Wolff told Ars she thinks the country must first prove it can prevent illegal activity and other security risks associated with digital assets. [...]

The US government has struggled to keep up with the way digital assets are used but seems determined to crack down on illegal uses while simultaneously pushing aggressively forward with government-backed digital assets, like a central bank digital currency. Wolff said that because many in the government don't know how digital currencies are used, both legally and illegally, legislators are unsure how to regulate new digital assets. Meanwhile, digital payment technologies continue to evolve. New uses emerge, and policymakers are continuing to look at the US's existing financial regulatory framework while asking basic questions. Is this digital asset considered a form of currency like a security (such as bitcoins), or is it being traded like a commodity (such as non-fungible tokens)? Or is some new legislation, such as the Stablecoin Transparency Act, needed to regulate emerging digital assets? Until mainstream adoption of technologies makes evident the most common uses of digital assets, regulators will continue struggling to make clear laws defining how digital assets can be used. Wolff told Ars it's a difficult policy agenda to navigate because "each of these new digital assets we see creates new opportunities for crime."
"The United States is trying to balance two somewhat at-odds priorities: We want this technology to be sufficiently regulated and traceable so that we can conduct law enforcement investigations and hold criminals accountable," Wolff told Ars. "But we also want it to be flexible enough that people can invent new things and experiment with new models and innovate. So I understand why companies are saying, 'Well, look, we could innovate more if you told us exactly what's allowed.'"

"Regulation of the financial services industry has a bad name, and rightfully so," said Consumer Financial Protection Bureau's director, Rohit Chopra, but CFPB was motivated to activate a dormant authority in the Consumer Financial Protection Act to ensure the US benefits from "a more decentralized and neutral consumer financial market structure" that "has the potential to reshape how companies compete in the sphere."

"That could mean the most innovative companies capture the largest parts of the US payments market," reports Ars, citing Wolff. "And as the market favors technologies and consumers adopt trusted digital assets, that could help regulators who still aren't sure how to craft policy for digital assets."
EU

Spyware Is Running Amok in Europe, EU Lawmaker Warns (bloomberg.com) 40

Spyware such as Pegasus is being deployed by state-run organizations across the European Union to snoop on politicians and journalists with virtually no EU-level oversight, according to a draft report for the bloc's parliament. From a report: The document on the use of surveillance spyware released on Tuesday said citizens can "safely assume that all EU member states have purchased one or more commercial spyware products" such as Pegasus, developed by Israel-based NSO Group. But, "no meaningful European oversight is in place; not to curb the illegal use of powerful spyware against individuals, nor to monitor the trade in these digital goods," lawmaker Sophie in 't Veld, the report's author, said in a statement. The 159-page document focuses on the use of spyware based on investigations of journalists and civil society groups and the parliament's own research missions.
The Courts

Court Sides With LinkedIn in Data Scraping Lawsuit vs. hiQ Labs (adweek.com) 12

LinkedIn emerged victorious in a nearly six-year-old lawsuit against hiQ Labs for data scraping. From a report: The U.S. District Court for the Northern District of California ruled in favor of the professional network, with Judge Edward Chen writing, "hiQ relied on LinkedIn for its data primarily by scraping wholly public LinkedIn profiles using automated software. hiQ had continuously attempted to circumvent LinkedIn's general technical defenses since May 2014.

"It experimented and attempted to reverse engineer LinkedIn's systems and to avoid detection by simulating human site-access behaviors. hiQ also hired independent contractors known as 'turkers' to conduct quality assurance while 'logged-in' to LinkedIn by viewing and confirming hiQ customers' employees' identities manually." hiQ Labs wound down its operations in 2018, although its servers continued running into 2019 to deliver on client contracts.

Chen wrote, "In sum, hiQ breached LinkedIn's user agreement both through its own scraping of LinkedIn's site and using scraped data, and through turkers' creation of false identities on LinkedIn's platform."

Crime

US Attorney Announces $3.36 Billion Crypto Seizure And Conviction In Connection With Silk Road Dark Web Fraud (justice.gov) 58

Department of Justice, announcing through a press release: Damian Williams, the United States Attorney for the Southern District of New York, and Tyler Hatcher, the Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Los Angeles Field Office ("IRS-CI"), announced today that JAMES ZHONG pled guilty to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 Bitcoin from the Silk Road dark web internet marketplace. ZHONG pled guilty on Friday, November 4, 2022, before United States District Judge Paul G. Gardephe.

On November 9, 2021, pursuant to a judicially authorized premises search warrant of ZHONG's Gainesville, Georgia, house, law enforcement seized approximately 50,676.17851897 Bitcoin, then valued at over $3.36 billion. This seizure was then the largest cryptocurrency seizure in the history of the U.S. Department of Justice and today remains the Department's second largest financial seizure ever. The Government is seeking to forfeit, collectively: approximately 51,680.32473733 Bitcoin; ZHONG's 80% interest in RE&D Investments, LLC, a Memphis-based company with substantial real estate holdings; $661,900 in cash seized from ZHONG's home; and various metals also seized from ZHONG's home.

U.S. Attorney Damian Williams said: "James Zhong committed wire fraud over a decade ago when he stole approximately 50,000 Bitcoin from Silk Road. For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery. Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds. This case shows that we won't stop following the money, no matter how expertly hidden, even to a circuit board in the bottom of a popcorn tin."

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