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This Week's Updates:
Sen. Warren Attacks Revolving Door Between Law Enforcement and Crypto
This week, Sen. Elizabeth Warren (D-MA) accused the crypto industry of employing a “small army” of former defense, national security, and law enforcement personnel in its attempt to block or delay counterterrorism measures. The connection between cryptocurrencies and terrorist financing is nothing new; in 2020, the Department of Justice seized millions of dollars’ worth of cryptocurrencies from accounts linked to Hamas, al-Qaeda, and ISIS. More recently, the Oct. 7th attack on Israel by Hamas has drawn attention to the ways unregulated cryptocurrency exchanges can be used for money laundering by terrorist organizations. At the same time, crypto companies and advocacy organizations have been snapping up law enforcement officials as lobbyists. Now, Sen. Warren is calling on major players in the crypto industry to disclose information about any former government personnel they employ, including individuals who served in Congress.
In early November, CfA alerted Sen. Warren to apparent entanglements between the American cryptocurrency company Circle and the Asia-based blockchain network TRON, which has been tied to the financing of terrorist organizations. In June of this year, Circle celebrated the hiring of new Chief Legal Officer and Head of Corporate Affairs Heath Tarbert by highlighting his “decades of experience from all three branches of the U.S. government.” Prior to joining Circle, Tarbert served as chairman of the Commodity Futures Trading Commission – an agency which may eventually play a role in crypto regulation.
The Power of Defaults in FTC’s Proposed COPPA Updates
On Wednesday, the FTC published proposed changes to the Children’s Online Privacy Protection Act Rule (COPPA Rule) which would establish additional safeguards for children and make it more difficult for technology companies to monetize their data. The agency’s proposals largely rely on parental consent, which will force platforms to adopt a model of “opt-ins” rather than “opt-outs” for features like targeted advertising. If adopted, these rules would considerably alter children’s online experiences by limiting the use of push notifications, which can disrupt activities like school and sleep. A recent report from Common Sense Media studied a cohort of users aged 11 to 17 and found that over half of participants received more than 230 notifications a day, 23% of which arrived during school hours. While COPPA applies only to children under 13, these updated rules could help families begin to set healthy boundaries with online platforms by making data minimization the default, not the exception.
How Google Hid its Hand in Campaign Against Journalism Funding
According to a story published this week in the L.A. Times, Google gave $1.2 million to the California Taxpayers Association (CalTax) in order to fund an ad campaign against California’s Journalism Preservation Act, which would have forced large online platforms to compensate news outlets for links to their material. The bill was designed to counteract declining revenues in the media industry, and specifically requires eligible outlets to spend 70% of funds received on journalists and support staff. In the ads Google paid for, though, the act is mischaracterized as a tax increase that would impact small businesses; Google’s name does not appear on the advertisements, because they were placed by a separate nonprofit. It took the release of lobbying disclosures to expose Google’s arrangement with CalTax. The journalism bill, meanwhile, is on hold until 2024.
