[NEWS] Problems in the world of crypto
This week in the news we saw two troubling stories about cryptocurrency trading.
In the first story, according to a new lawsuit filed in California, several celebrities are being accused of promoting EthereumMax (EMAX), a new cryptocurrency to boost its value, only to have the crypto creators sell their holdings for big bucks, in a scheme known as ‘pump and dump.’ The BBC reported that Kim Kardashian, boxer Floyd Mayweather, and former NBA star Paul Pierce promoted EMAX on social media or provided incentives to purchase the currency. As a result of their endorsements, EMAX quickly increased in value. Then EMAX creators Steve Gentile and Giovanni Perone sold off their holdings, making a profit before the cryptocurrency took a nosedive. According to the lawsuit, “EthereumMax’s entire business model relies on using constant marketing and promotional activities, often from ‘trusted’ celebrities, to dupe potential investors into trusting the financial opportunities.”
And in the second, Crypto.com is being cryptic about a possible hack. Gizmodo reports that Crypto.com, a popular cryptocurrency trading app with over 10 million users, suspended withdrawals for 14 hours on Monday and required all users to reset two-factor authentication. According to a company tweet, some users “experienced unauthorized activity in their accounts” but reassured users that “all funds are safe.” Some users reported significant funds missing from their accounts but then noted that the money had been restored. But Gizmodo notes, “it’s not clear if hackers made off with stolen funds and the users were simply compensated by the company or if no money was actually stolen,” and the company refused attempts to get clarification on this point.
In other news
- Facebook faces significant antitrust action in the US and UK. This week a federal judge in the US ruled that the Federal Trade Commission could move forward with antitrust action against Meta Platforms/Facebook as a monopoly. As Wired reports, in reversing a previous decision, the judge now accepts the government’s contention that “Facebook has a dominant share of the social networking market.” The question now is whether or not holding a monopoly is harmful if the product itself is free. Meanwhile, Reuters reports that the company faces a ￡2.3 billion class-action suit in Britain for using its dominance in the market to exploit the personal data of 44 million users.
- Town exchanges flashing lights for text messages. The town of Windcrest, northeast of San Antonio, is hoping to reduce traffic stops by encouraging residents to sign up for a new Trusted Driver Program. According to Gizmodo, participants will receive text messages if they commit minor traffic violations like speeding or running red lights. CEO of the program and former San Antonio Police Department officer Val Garcia hopes that reducing traffic stops will give officers more time to pursue serious crimes.
- Chess-playing AI could have massive privacy implications. Computer scientists at the University of Toronto trained an AI to play in a more human style using data from millions of games played on the Lichess website. The goal ostensibly was to learn how to create human-like AIs for systems such as chatbots. But as researchers discovered, the system can be used to not only improve gameplay but identify behavioral patterns that can identify individual players. The journal Science points out that in the future, this technology may not be reserved just for games and customer service. Privacy advocates suggest that such systems could be employed in the future to identify people based on all sorts of behaviors such as driving, shopping, or other activities, and could become a new tool for law enforcement.
- Microsoft acquires Activision Blizzard. In the past, we’ve reported on the ongoing troubles at the video game company Activision Blizzard, including labor disputes and accusations of sexual harassment against CEO Bobby Kotick. Now The New York Times reports that Microsoft plans to purchase the company for a whopping $70 billion. This acquisition would position Microsoft as a top player in online gaming and boost its Xbox gaming platform. Gizmodo notes that this is Microsoft’s largest-ever acquisition, twice the size of its purchase of LinkedIn, and points out that Microsoft stands to gain “nearly 400 million monthly active players in 190 countries” in a move that could generate billions for the tech company.