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  1. Key Points David Marcus, the head of Facebook's digital currency project, says during a hearing in the U.S. Senate on Tuesday that authorities in Switzerland will oversee data and privacy protections for its new cryptocurrency, Libra. But a spokesperson for the Swiss agency, the Federal Data Protection and Information Commissioner, says it has not yet been contacted by Facebook. Several senators who questioned Marcus on Tuesday express concern over Facebook's reputation with data privacy. Facebook said on Tuesday that Switzerland's data protection agency will oversee data and privacy protections for its new cryptocurrency, Libra. But Facebook hasn't reached out to the Swiss regulator, a spokesman for the agency told CNBC. In his testimony before the Senate Banking Committee on Tuesday, David Marcus, the head of Facebook's digital currency project, said, "For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner (FDPIC) will be the Libra Association's privacy regulator." Asked about the agency's role regulating Libra, Hugo Wyler, head of communication at the FDPIC, said in a statement to CNBC: "We have taken note of the statements made by David Marcus, Chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra," Wyler said. "We expect Facebook or its promoters to provide us with concrete information when the time comes. Only then will we be able to examine the extent to which our legal advisory and supervisory competence is given. In any case, we are following the development of the project in the public debate." A Facebook spokesperson confirmed that the company hasn't yet met with the FDPIC. Facebook's cryptocurrency project has already been met with skepticism from policymakers around the world. U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both said they have "serious concerns" about Libra related to money laundering, financial stability and regulation. Many of the senators who questioned Marcus on Tuesday also brought up data privacy concerns tied to Libra. While FDPIC would handle data privacy issues, the Swiss Financial Markets Supervisory Authority, or FINMA, would be the main financial regulator of Libra, Marcus said in his testimony. FINMA confirmed to CNBC it was in contact with initiators of the Libra project. Source
  2. LONDON (Reuters) - Bitcoin fell 8% on Tuesday, breaching $10,000 for the first time in two weeks after U.S. lawmakers grilled Facebook on its cryptocurrency plans, as political and regulatory scrutiny of digital coins intensifies. The biggest cryptocurrency fell to $9828.89 by around 1630 GMT after David Marcus, the company’s top executive overseeing the planned Libra project, answered questions from the Senate Banking Committee. Earlier in the day, bitcoin had lost around 3%. Traders said the trigger for the selling was not immediately clear. During the testimony, a U.S. senator said Facebook was “delusional” to believe people will trust it with their money as the social media giant fights to get Washington onside for its planned Libra project, aimed for launch in 2020. Source
  3. WASHINGTON (Reuters) - Facebook Inc is “delusional” to believe people will trust it with their money, a U.S. senator said on Tuesday as lawmakers from both sides of the aisle grilled the social media company on its plans for a digital currency at a hearing on Tuesday. Facebook is fighting to get Washington onside after it shocked regulators and lawmakers with its announcement on June 18 that it was hoping to launch a new digital coin called Libra in 2020. Since then it has faced criticism from policymakers and financial watchdogs at home and abroad who fear widespread adoption of the digital currency by the social media giant’s 2.38 billion users could upend the financial system. “Facebook has demonstrated through scandal after scandal that it doesn’t deserve our trust,” Democratic senator Sherrod Brown, the ranking member of the Senate Banking Committee, said in his opening remarks. “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.” Brown added during questioning that he thought it was “delusional” to think individuals would trust the social media company with their “hard-earned” money. The Senate Banking Committee is questioning David Marcus, the company’s top executive overseeing the project, on issues ranging from how Libra could affect global monetary policy to how customer data will be handled. He received a frosty welcome from Democrats lawmakers and several Republicans, who shared many of the same concerns. “I don’t trust you guys,” said Republican Senator Martha McSally. “Instead of cleaning up your house you are launching into a new business model.” Marcus, who was president of PayPal from 2012 to 2014, tried to assuage concerns in his opening remarks by promising that Facebook will not begin offering Libra until regulatory issues are addressed. “We know we need to take the time to get this right,” Marcus, who is also due to testify before the House Financial Services Committee on Wednesday, said. Prior to announcing its Libra plans Facebook was already facing significant backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 U.S. presidential election. Concerns raised through questions included how the company plans to prevent money laundering through the new payment system, how consumers’ data and funds will be protected and how the Geneva-based association created to run the system will be regulated. McSally asked Marcus how consumers could trust Facebook not to share their payments data. “I know we have to earn people’s trust for a very long period of time,” Marcus said. The social media company has pledged that its payments subsidiary called Calibra will only share customer data with Facebook and external third parties if it has consent, or in “limited cases,” where it is necessary. UNDER WRAPS Critics have expressed anger that the company would have got so far in its plans for such a potentially groundbreaking project without extensive input from policymakers, especially when it is already in the spotlight over privacy issues. Facebook allocated a small fraction of its vast workforce to work on the project, Kevin Weil, who runs product for the Libra initiative, told Reuters on June 18. One former employee told Reuters the company tried to keep the project under wraps even internally - staff who were not involved knew little about it, not even that it was operating under the name Libra. Rumors had surfaced as early as last year that Facebook was working on a digital currency, but news that the project was in its advanced stages started to emerge only in recent months. In the weeks leading up to the announcement, the company began reaching out formally to key regulators including the Federal Reserve, the Treasury and the Commodity Futures Trading Commission. But two people with knowledge of the discussions said the conversations remained vague, with key details of the project discussed only on a theoretical level. Some lawmakers specializing in financial services policy have been frustrated by the lack of clarity from Facebook before and since June 18, three congressional sources said. One Democratic aide described the company’s contacts with lawmakers as “inept and entitled.” In its defense, Facebook has said that it announced the project in its early stages to get feedback from stakeholders. Marcus reiterated this at the hearing on Tuesday. Source
  4. The head of Facebook’s blockchain subsidiary Calibra David Marcus has released his prepared testimony before congress for tomorrow and Wednesday, explaining that the Libra Association will be regulated by the Swiss government since that’s where it’s headquartered. Meanwhile, he says the Libra Association and Facebook’s Calibra wallet intend to comply will all US tax, anti-money laundering, and anti-fraud laws. Image: David Marcus “The Libra Association expects that it will be licensed, regulated, and subject to supervisory oversight. Because the Association is headquartered in Geneva, it will be supervised by the Swiss Financial Markets Supervisory Authority (FINMA)” Marcus writes. “We have had preliminary discussions with FINMA and expect to engage with them on an appropriate regulatory framework for the Libra Association. The Association also intends to register with FinCEN [The U.S. Treasury Department’s Financial Crimes Enforcement Network] as a money services business.” Marcus will be defending Libra before the Senate Banking Committee on July 16th and the House Financial Services Committees on July 17th. The House subcomittee’s Rep Maxine Waters has already issued a letter to Facebook and the Libra Association requesting that it halt development and plans to launch Libra in early 2020 “until regulators and Congress have an opportunity to examine these issues and take action.” Attempting to assuage a core concern that Libra is trying to replace the dollar or meddle in financial policy, Marcus writes that “The Libra Association, which will manage the Reserve, has no intention of competing with any sovereign currencies or entering the monetary policy arena. It will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy. Monetary policy is properly the province of central banks. Marcus’ testimony comes days after President Donald Trump tweeted Friday to condemn Libra, claiming thaat “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity. Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.” TechCrunch asked Facebook for a response Friday, which it declined to provide. However, a Facebook spokesperson noted that the Libra association won’t interact with consumers or operate as a bank, and that Libra is meant to be a complement to the existing financial system. Regarding how Libra will comply with US anti-money laundering (AML) and know-your-customer (KYC) laws, Marcus explains that “The Libra Association is similarly committed to supporting efforts by regulators, central banks, and lawmakers to ensure that Libra contributes to the fight against money laundering, terrorism financing, and more” Marcus explains. “The Libra Association will also maintain policies and procedures with respect to AML and the Bank Secrecy Act, combating the financing of terrorism, and other national security-related laws, with which its members will be required to comply if they choose to provide financial services on the Libra network” He argues that “Libra should improve detection and enforcement, not set them back” because cash transactions are frequently used by criminals to avoid law enforcement. “A network that helps move more paper cash transactions—where many illicit activities happen—to a digital network that features regulated on- and off-ramps with proper know-your-customer (KYC) practices, combined with the ability for law enforcement and regulators to conduct their own analysis of on-chain activity, will present an opportunity to increase the efficacy of financial crimes monitoring and enforcement.” As for Facebook itself, Marcus writes that “The Calibra wallet will comply with FinCEN’s rules for its AML/CFT program and the rules set by the Office of Foreign Assets Control (OFAC) . . . Similarly, Calibra will comply with the Bank Secrecy Act and will incorporate KYC and AML/CFT methodologies used around the world.” Below you can read the full testimony: David Marcus' Libra testimony 7-16-19 Source
  5. This record-breaking fine will become an indelible mark, reminding the world why the social network is not to be trusted. That’s bad news for Libra. It looks like Facebook’s $5 billion settlement, which was ratified by the Federal Trade Commission, will likely go through. The deal was approved 3-2 along party lines, with the Republican commissioners voting for it and the Dems—who represent, arguably, the victims of the Cambridge Analytica data breach that may have helped elect Donald Trump—voting against it. All that remains is for the U.S. Justice Department to rubber stamp it, and a settlement that The Verge described as an “embarrassing joke” will be finalized. The social network can get back to business, unencumbered by a year-long investigation into its cavalier handling of users’ personal data. Though the size of the fine is historic, dwarfing a $22 million fine against Google in 2012, it’s nothing to Facebook, which made $22 billion in profits last year alone. Indeed, Wall Street immediately laughed off the settlement, and Facebook’s stock took off. But it might be the rest of the world that has the last laugh—at the social network’s expense. The $5 billion fine will exist as a perpetual black eye, a reminder that Facebook is not to be trusted. And that’s very bad news for one of its most ambitious, and literal money-making plans: Libra. Libra, which readers of this publication hardly need reminding, is a permissioned cryptocurrency that Facebook plans to roll out across Messenger and WhatsApp starting in 2020. Despite Facebook’s claims, it’s neither a stablecoin, nor a blockchain, but it could establish the social network and its hand-picked consortium as a new kind of international currency that would rival Bitcoin. Coindesk estimates, conservatively, that Libra could bring in billions of dollars in revenue for the companies running the network, and Facebook. In the U.S., Congressional leaders have called for a moratorium on any further progress on Libra; hearings will begin next week in Washington. And outside the U.S., world leaders have lined up to voice their horror: the UK, France, and Germany have already indicated their intense opposition to the Facbeook coin. In China, the central bank has stepped up its efforts to create its own digital currency, in an attempt to get one step ahead of Facebook. The South Koreans and the Japanese are nervous. And it’s still early days. The $5 billion fine will exist as a virtual Mount Rushmore for all the world to see—a reminder that Facebook can’t pull this off without catastrophic breaches of data privacy. That fine will be a pittance compared to all that could be lost when the world torpedoes Libra. Source
  6. Facebook gets away with it again Mark Zuckerberg is laughing at you Facebook’s stock went up after news of a record-breaking $5 billion FTC fine for various privacy violations broke today. That, as the New York Times’ Mike Isaac points out, is the real story here: the United States government spent months coming up with a punishment for Facebook’s long list of privacy-related bad behavior, and the best it could do was so weak that Facebook’s stock price went up. From some other perspectives, that $5 billion fine is a big deal, of course: it’s the biggest fine in FTC history, far bigger than the $22 million fine levied against Google in 2012. And $5 billion is a lot of money, to be sure. It’s just that like everything else that comes into contact with Facebook’s scale, it’s still entirely too small: Facebook had $15 billion in revenue last quarter alone, and $22 billion in profit last year. The largest FTC fine in the history of the country represents basically a month of Facebook’s revenue, and the company did such a good job of telegraphing it to investors that the stock price went up. Here’s another way to say it: the biggest FTC fine in United States history increased Mark Zuckerberg’s net worth. What lesson would you learn from that? Would anyone? That’s actually the real problem here: fines and punishments are only effective when they provide negative consequences for bad behavior. But Facebook has done nothing but behave badly from inception, and it has only ever been slapped on the wrist by authority figures and rewarded by the market. After all, Facebook was already under a previous FTC consent decree for privacy violations imposed in 2011, and that didn’t seem to stop any of the company’s recent scandals from happening. As Kara Swisher has written, you have to add another zero to this fine to make it mean anything. There are other elements to the settlement, as Tony Romm at the Washington Post has reported: Facebook will have to document how it plans to use data before it launches new products, and execs like Zuckerberg will have to promise the company has protected user privacy. But none of these conditions will prevent Facebook from collecting and sharing data, and they certainly won’t affect Facebook’s insanely lucrative ad business, which relies upon that data. And as Peter Kafka notes, regulatory compliance costs aren’t exactly a deterrent either: Facebook will pay the fine, eat the cost of a few more lawyers and PR people to ensure compliance with this new order, and carry on with the business of, uh, issuing a new worldwide currency while exposing underpaid contractors to horrifying videos of people being murdered for $15 an hour. Members of Congress are already opposing this settlement — Rep. David Cicilline is calling it a “Christmas present,” while Senator Ron Wyden says the FTC has “failed miserably.” Senator Richard Blumenthal says the decision is “inadequate” and “historically hollow,” and Senator Mark Warner says “It’s time for Congress to act.” There are surely going to be many more statements and strongly-worded condemnations of the FTC in the weeks ahead, as the settlement goes through Justice Department review and inevitable approval. But words are just words, really. If our government is going to hold Facebook accountable for its reckless and irresponsible behavior, it has to actually do it, and in such a way that Mark Zuckerberg learns that actions have consequences. Source
  7. Facebucks — There’s a big problem with Facebook’s Libra cryptocurrency "I don't understand how this is possible," an expert said of Facebook's approach. Enlarge Mark Zuckerberg is known for his boundless ambition. He's had a longstanding fascination with Caesar Augustus, the Roman emperor who (in Zuckerberg's words) "established 200 years of world peace." So having conquered social networking, Zuckerberg has his eyes on something bigger: reshaping the global financial system. Payment services from rivals like Apple and Google essentially offer an improved user interface for conventional credit card networks. Facebook, by contrast, is aiming to use blockchain-like technology to build a new payment network from scratch, complete with its own currency. Facebook has assembled an impressive roster of launch partners for its Libra project. Visa, MasterCard, and PayPal are backing the effort. So are Uber and Lyft, as well as several venture capital firms and non-profit organizations. But Libra's future remains murky. Facebook is months away—at least—from actually launching a network. The documents Facebook released in June left a lot of unanswered questions about how the network will actually work—and in particular, how the network will deal with the wide range of legal and regulatory requirements that apply to payment networks. “Serious concerns” Enlarge / Jerome Powell, chairman of the US Federal Reserve, waits for the start of a House Financial Services Committee hearing in Washington, DC, US, on July 10, 2019. Andrew Harrer/Bloomberg via Getty Image Since Libra's unveiling, the project has gotten a chilly reception from some policymakers. On Wednesday, Federal Reserve Chairman Jerome Powell signaled skepticism about Facebook's plans for Libra. “I don’t think that the project can go forward ... without there being broad satisfaction with the way the company has addressed money laundering, all of those things,” Powell said in testimony before the House Financial Services Committee. He added that the project raised "serious concerns" for regulators. According to The New York Times, even some of Facebook's official partners are lukewarm on the project. Partners are slated to contribute $10 million each to help fund the launch of the network. But the Times' Nathanial Popper reported in late June that "no money has changed hands so far," and he noted that some of the companies who agreed to lend their names to the project avoided making strong public statements in support of it. That reflects significant uncertainty about how Libra will actually work—and if it's even possible to launch a network like this within the bounds of the law. Facebook is trying to build a payment system that combines the best characteristics of blockchain and conventional networks. But the result may wind up just being a contradictory mess that leaves almost everyone dissatisfied. Libra will be optimized for performance fdecomite In the bitcoin network, thousands of computers called full nodes work together to maintain a shared ledger of bitcoin transactions. Bitcoin's shared ledger is organized in a sequence of blocks—hence the term blockchain. Nodes use a computationally expensive technique called "proof of work" to decide who gets to add the next block in the chain. Each block contains a list of new transactions that becomes part of the official bitcoin transaction history. At a high level, the Libra network is designed to work the same way. A group of computers distributed across the Internet will maintain a shared ledger of Libra transactions. To make a Libra payment you'll submit a cryptographically signed transaction to one of the nodes in the network so it can be incorporated into the shared ledger. But Facebook deliberately departed from the bitcoin template in some important ways—changes that are designed to avoid the bitcoin network's shortcomings. The most fundamental difference: the bitcoin network is fully open, while Libra isn't. Anyone with significant computing power can participate in bitcoin's process for verifying bitcoin transactions, a process known as mining because participants win newly created bitcoins. By contrast, participation in Libra's transaction clearing process will be limited to a few dozen pre-approved organizations that are members of the Libra Association: those are the partners like Visa, MasterCard, and Uber we mentioned at the start of this story. This design locks out potential troublemakers, allowing Libra to use a more lightweight consensus mechanism: one that won't consume vast amounts of computing power—and energy—like bitcoin's proof-of-work approach. Bitcoin's developers have maintained a hard cap on the size of blocks in the bitcoin blockchain. This keeps down the bandwidth and storage costs of running a bitcoin node, which allows small organizations and even individuals to participate. But the result of this is that the network can only process a handful of transactions per second. The Libra network is designed for much higher throughput. "We anticipate the initial launch of Libra protocol to support 1,000 payment transactions per second," Libra's technical white paper states. The bitcoin network adds new blocks to the blockchain once every 10 minutes, on average, and experts recommend waiting up to six blocks before considering a transaction final (the more blocks that appear after a particular transaction, the harder it will be to reverse the transaction). Hence, an hour can go by before bitcoin transactions are considered truly final. Libra aims for a much shorter 10-second finality time. This is easier for Libra to achieve because it has a much smaller number of validation nodes, each of which can be assumed to have fast network connections. Listing image by Aurich Libra will support smart contracts—eventually Ethereum creator Vitalik Buterin. TechCrunch Ethereum introduced the concept of smart contracts: computer programs that are executed deterministically by a cryptocurrency network, with results stored in the blockchain. Not only does Libra employ a variant of smart contracts, the technology is deeply baked into the network's design. Facebook has developed a new programming language called Move that is designed to make it easy to write secure and verifiable code for execution on a blockchain. Nodes in the Libra network run a virtual machine that interprets Move bytecode. Many core functions of the Libra network will be implemented using bundles of Move code called modules that are stored in the Libra blockchain. Facebook argues that this design enhances the security and extensibility of Libra, since it will be possible to add new features to the Libra network merely by writing new modules. At the same time, the complexity of executing a general-purpose programming language could create scalability challenges. So rather than letting users write modules with arbitrary code in them, the Libra network will initially come with a collection of pre-defined modules that perform common functions. "While Move is used to define core system concepts, such as the Libra currency, users are unable to publish custom modules that declare their own resource types," Libra's technical white paper says. "This approach allows the Move language and toolchain to mature—informed by the experience in implementing the core system components—before being exposed to users." Libra's designers say that they "intend for future versions of the Libra protocol to provide open access to the Move language." This means that in principle Libra could become much more than just a payment network. The Ethereum community has experimented with a wide range of smart contracts that range from online gambling to collectible cryptokitties. But so far, no one has developed an application for smart contracts with truly mainstream appeal. If such applications do emerge, however, Libra may be well-positioned to take advantage. Libra will be pegged to conventional currencies aranjuez1404 Among the biggest hurdles to mainstream use of bitcoin and other conventional cryptocurrencies are their wild price swings. In the month of June alone, bitcoin's value soared from $7,500 to almost $14,000, then crashed to around $10,000. There have been a number of efforts to make "stablecoins:" cryptocurrencies whose value is permanently pegged to a conventional currency like the dollar. Facebook is pursuing a variant of this approach, pegging Libra to a basket of major conventional currencies. This design will make it easier for Facebook to position Libra as a new global standard that's not tied to any specific economy. Pegging Libra to a basket of mature currencies means that its value won't fluctuate as much as bitcoin. But Libra's value won't be fixed to the dollar or any other conventional currency. In practice, ordinary users probably won't have to learn to think in a new currency. Their Libra balances will display in their home currency, and they'll have the option to draw additional funds from a bank account or credit card as needed. But if users choose to hold balances in their Libra accounts, they'll find that the dollar value fluctuates a bit from day to day. It'll be interesting to see if users find this annoying, infuriating, or no big deal. Facebook is wading into a regulatory thicket Enlarge marc falardeau US law imposes a wide variety of legal requirements on companies that run payment networks. Customer-facing payment networks must verify the identities of their customers and report suspicious transactions to anti-money laundering authorities. They must block payments to terrorist groups and hostile nations like Iran and North Korea. They may have to register as money transmitters in each state where they operate, and many states require money transmitters to post bonds to ensure they won't defraud customers. And that's just in the United States. Other governments around the world have their own rules. Satoshi Nakamoto, the pseudonymous creator of bitcoin, found a clever way to sidestep all of these issues: design a network so that no one controls it. The bitcoin network operates by a strict set of rules that are collectively enforced by a global network of bitcoin miners. No single miner or group of miners has the ability to block, modify or delete transactions, limit access to the network, or change the network's design. This decentralized structure effectively puts the bitcoin network beyond the reach of regulators because there's no Bitcoin Inc. or any other entity they can fine for non-compliance. US regulators started thinking seriously about these issues around 2013. Theoretically, regulators could have tried to shut down the bitcoin network for failing to comply with laws about money laundering, foreign sanctions, and the like. But bitcoin advocates convinced US officials that this would be counterproductive. Attacking bitcoin in the United States would have just driven mining activity overseas. The network would likely continue operating somewhere, and Americans could still access it using virtual private networks. Instead, US regulators took a more pragmatic approach. They left the core bitcoin network unmolested and focused on enforcing compliance by cryptocurrency exchanges and other bitcoin intermediaries. If you want to buy bitcoins on a mainstream exchange like Coinbase, you're required to supply the same kinds of identifying documents you need to open a US banking account. Coinbase complies with the regulations of the Office of Foreign Assets Control, which administers sanctions against countries like Iran and North Korea. Meanwhile, the office reports suspicious transactions to the authorities as required by the Bank Secrecy Act. It has registered as a money transmitter in dozens of states. This is an arrangement law enforcement can live with. If someone commits a crime using bitcoin (say, using it to pay for child pornography), investigators can conduct forensic analysis on the bitcoin blockchain (which makes every transaction public) to figure out where the bitcoins came from and where they went. Often, the user will have purchased his bitcoins with an intermediary like Coinbase. Investigators can subpoena Coinbase in the same way that they'd subpoena a conventional bank. “I don’t understand how this is possible” Enlarge / The Libra Association will be based in Switzerland, but that won't necessarily shield it from regulatory scrutiny in the US. kmaschke Facebook envisions a Libra ecosystem that looks a lot like the existing bitcoin ecosystem. Just as people use intermediaries like Coinbase to acquire and manage their bitcoins, Facebook envisions users interacting with the Libra network via exchanges and user-friendly apps—including Facebook's own app called Calibra. Each company building a Libra payment service will need to hire its own lawyers to make sure it's complying with all applicable laws. A key assumption behind this plan is that the Libra network itself will operate beyond the reach of any country's regulatory regime in the same way that bitcoin does. A Libra Association representative, Dante Disparte, articulated this principle in a recent interview with blockchain podcaster Laura Shin. Shin asked Disparte what would happen if a government like the United States demanded that the Libra Association blacklist certain Libra addresses in order to comply with sanctions laws—something that's required of most conventional payment networks. "The Association won't interact with any jurisdiction," Disparte said. "The Association has three macro-level functions: governance, management of a reserve, management of an open-source technology. The companies that offer consumers and citizens in different jurisdictions around the world are the regulated entities that provide an on- and off-ramp to Libra the currency." But this position has a fair number of skeptics. One of them is Jerry Brito, a lawyer who runs a blockchain-focused think tank called the Coin Center. "I don't understand how this is possible," Brito tweeted. If the US government asked the Libra Association to block a list of Libra addresses, the Association's members—big companies like Facebook, Mastercard, Visa, and Uber—would have little choice to comply, he argued. Libra could get bogged down with regulations Enlarge / Rep. Maxine Waters (D-Calif.) chairwoman of the House Financial Services Committee, listens during a hearing on May 16, 2019. Anna Moneymaker/Bloomberg via Getty Images And the same point applies to other laws governing payment networks. Brito pointed out that the Libra Association likely qualifies as a money transmitter under the Bank Secrecy Act. Other experts agree. That means the Libra Association may have to ask its users for identification and report suspicious transactions to authorities in the United States—and possibly in other jurisdictions, too. You can make a similar point about any situation where payment networks interact with the legal system. For example, if someone hacks your computer and transfers your bitcoins to another account, there's nothing the legal system can do about it—even if your stolen funds are still sitting in the hacker's bitcoin account. No one has the technical ability to reverse a bitcoin transaction, and so the legal system can't order that it happen. But the situation is likely to be different if a hacker steals someone's Libra coins. A judge could order the fraudulent transaction to be reversed, and it's hard to see how the Libra Association or its members could refuse. Of course, we can expect Facebook to dispatch an army of lobbyists and lawyers to argue that Libra should be treated like bitcoin. But Congress never passed a law stating that blockchain networks should be treated differently from conventional financial networks. The bitcoin network has been able to ignore regulations only because there's no one for regulators to punish for bitcoin's non-compliance. The Libra network won't have that advantage. Fed Chairman Jerome Powell made that clear in his Wednesday congressional testimony. "Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell said. A group of Democratic lawmakers led by Rep. Maxine Waters (D-Calif.) raised similar concerns earlier this month. Libra "raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy," they wrote. Regulatory compliance could force changes to Libra’s design Enlarge / Facebook CEO Mark Zuckerberg departs after testifying on Capitol Hill, April 10, 2018. Win McNamee/Getty Images Regulatory compliance won't just be an implementation headache for the Libra Association and its members. It could have big consequences for the technical design of the Libra network. For example, one of the most distinctive things about the bitcoin network is that all transactions are final. As we noted above, if a hacker steals your bitcoins, you're just out of luck. This is a potential downside for users, but it also has some significant upsides. It's a boon for merchants, who don't have to worry about payments being reversed after a product has been delivered. And it simplifies the development of financial services built on top of the bitcoin network, since confirming the validity of a transaction is strictly a matter of cryptography. But the Libra network may not have the option to just ignore fraudulent transactions. Courts and regulators may compel the Libra Association to return stolen funds. And even if they don't, Facebook and the other Libra Association members will have strong incentives to avoid having fraud run rampant on the Libra network. Hence, the Libra Association will face strong pressure to add the capability to reverse fraudulent transactions. But making transactions reversible—even occasionally—would mean giving up the simplicity of the bitcoin payment model. Merchants could no longer assume that a transaction was final as soon as it's been accepted by the network. Financial services built on top of Libra would have to take into account the risk that a seemingly-valid transaction could get reversed hours or days after the fact. Another example: the Libra network claims that "the Libra Blockchain is pseudonymous and allows users to hold one or more addresses that are not linked to their real-world identity." But this design choice seems hard to square with the Bank Secrecy Act's requirement that money transmitters identify their customers. So the Libra Association could be forced to add some rules requiring anyone building a Libra-based payment service to not only collect users' identifying information but also to share it across the Libra network. Facebook wants to make Libra permissionless, but that might not be possible Enlarge Getty Images No single change here is going to be fatal to Libra's ambitions to build a new global payment network. But if you combine all of these changes, you could easily wind up with a network that looks more like a conventional payment network than a blockchain network. You could wind up with a network where would-be payment app developers have to do stacks of paperwork before they can write their first line of code, where small organizations struggle to get approval to create Libra-based services, and where the functionality of services is constrained by legal requirements. To be clear, this is not where Facebook and the Libra Association think Libra is going. "Our ambition is for the Libra network to become permissionless," the Libra Association wrote in a white paper, using blockchain jargon for a bitcoin-like network that no one controls. "One of the association's directives will be to work with the community to research and implement this transition, which will begin within five years of the public launch of the Libra Blockchain and ecosystem." But this aspiration may prove unrealistic. Beyond the issues we've already mentioned, Libra's status as a stablecoin creates a problem. Libra has promised to hold conventional assets to back the value of all Libra in circulation. Someone is going to need to have custody of those funds. But it's hard to see how such a stablecoin network can become permissionless, since whoever controls the funds backing the network's currency will have de facto control over the network. So far from gradually giving up control, the Libra Association is going to face pressure to exert ever more active control over the network to deal with issues like fraud and money laundering. Source: There’s a big problem with Facebook’s Libra cryptocurrency (Ars Technica)
  8. LONDON (Reuters) - Bitcoin dipped almost 8% on Thursday, extending losses the day after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s Libra cryptocurrency project until concerns ranging from privacy to money-laundering were addressed. The original cryptocurrency initially fell 7.7% to $11,164 in early morning trade, following a 3.8% slide on Wednesday after Powell's testimony on monetary policy before the U.S. House of Representatives Financial Services Committee. It was last down 4.5%. Other major cryptocurrencies including Ethereum and XRP's Ripple fell by similar levels. “This is a direct response to the Powell testimony and comments on Facebook’s Libra and the implications that could have for the entire cryptocurrency space,” said Craig Erlam, senior market analyst at FX trading platform OANDA. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell told the committee, adding that he did not think the project could proceed unless those concerns were addressed. The proposed cryptocurrency has drawn close scrutiny from policymakers and financial regulators globally. Powell said existing rules do not fit cryptocurrencies. Other traders said the moves fitted within the pattern of bitcoin’s recent volatility, where double-digit intra-day price moves have been common. The biggest coin climbed nearly 55% in nine days after Facebook unveiled its plans for Libra on June 18, touching an 18-month high of nearly $14,000. The project has boosted hopes that cryptocurrencies could gain wider acceptance. Source
  9. WASHINGTON (Reuters) - U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that Facebook’s (FB.O) plan to build a digital currency called Libra “cannot go forward” until serious concerns were addressed, piling further pressure on the controversial project. Policymakers globally have already expressed serious concerns about the cryptocurrency, but the strong comments from the United State’s most powerful financial regulator further underscores the growing regulatory hurdles for the project. “Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell told the U.S. House of Representatives Financial Services Committee, adding later in the morning “I don’t think the project can go forward” without addressing those concerns. Powell said any regulatory review of the recently announced project should be “patient and careful,” while acknowledging digital currencies do not neatly fit within existing rules. “It’s something that doesn’t fit neatly or easily within our regulatory scheme but it does have potentially systemic scale,” he said. “It needs a careful look, so I strongly believe we all need to be taking our time with this.” It is unclear exactly how the Fed could slow the project if it wanted, given the murky regulatory treatment of digital currencies, but Powell’s perspective looms large as the head of one the globe’s most powerful regulators. Facebook officials are scheduled to testify before Congress on the project later this month, where senior lawmakers have raised data privacy and other concerns. Powell said the Fed has established a working group to follow the project and is coordinating with other central banks across the globe. He also expects that the U.S. Financial Stability Oversight Council, a panel of regulators charged with identifying broad risks to the financial system, will also review the idea. Powell noted that he supports financial innovation as long as appropriate risks are identified, but he said the massive platform enjoyed by Facebook immediately sets Libra apart from other digital currency projects. “Facebook has a couple billion-plus users, so I think you have for the first time the possibility of very broad adoption,” he said. Any problems that could emerge through Libra “would arise to systemically important levels just because of the mere size of Facebook.” Source
  10. BRUSSELS (Reuters) - Facebook will face Austrian privacy activist Max Schrems next week at Europe’s top court in a landmark case that could affect how hundreds of thousands of companies transfer personal data worldwide as well as Europeans’ privacy rights. FILE PHOTO: Austrian lawyer and privacy activist Max Schrems prepares his laptop during a Reuters interview in a cafe in Vienna, Austria, May 22, 2018 At issue is standard contractual clauses used by Facebook and other companies to transfer personal data to the United States and other parts of the world and whether these violate Europeans’ fundamental right to privacy. Cross-border data transfers worth billions of dollars are a fact of life for businesses ranging from banks to carmakers to industrial giants. Schrems, an Austrian law student, successfully fought against the EU’s previous privacy rules called Safe Harbour in 2015. He is now challenging Facebook’s use of such standard clauses on the grounds that they do not offer sufficient data protection safeguards. Facebook’s lead regulator, the Irish Data Protection agency, took the case to the High Court in Ireland which subsequently sought guidance from the Luxembourg-based Court of Justice of the European Union (ECJ). Facebook was not immediately available to comment. The court ruling will have a global impact, Tanguy Van Overstraeten, global head of data protection at law firm Linklaters, said. “The whole data transfer system would be impacted and could impact the global economy,” he said. “There are alternatives to the standard clauses, including the derogations set out in the GDPR such as consent, contractual necessity and others but they are strictly interpreted and difficult to apply in practice.” Van Overstraeten said hundreds of thousands of companies would be hit if the ECJ rules against the clauses compared to some 4,500 companies affected when Safe Harbour was struck down. Safe Harbour was replaced in 2016 by the EU-U.S. Privacy Shield which was designed to protect Europeans’ personal data transferred across the Atlantic for commercial use. Data privacy has become a major concern since revelations in 2013 by former U.S. intelligence contractor Edward Snowden of mass U.S. surveillance which triggered outrage among politicians in Europe. The EU adopted the GDPR data protection laws last year. The case is C-311/18 Data Protection Commissioner V Facebook Ireland Ltd, Maximillian Sc Source
  11. BERLIN (Reuters) - German authorities have fined Facebook 2 million euros ($2.26 million) for providing a distorted picture of the amount of illegal content on the social media platform, a violation of the country’s law on internet transparency. In a statement issued on Tuesday, the Federal Office of Justice, a judicial agency, said that by publishing incomplete information regarding the complaints it had received, the web giant created a skewed picture. Faced with a global backlash over the role its platform played in election campaigns from the United States to Britain to the Philippines, Facebook has been on a public relations drive to improve its image. Under Germany’s network transparency law, social media platforms are required to report the number of complaints of illegal content they have received. The charge that Facebook underreported violations could undermine its drive to burnish its tarnished reputation. “This creates a distorted picture of the scale of illegal content on the platform and the way Facebook deals with it,” the office said. “The report contains only a fraction of the complaints of illegal information.” In 2018, Facebook said it had received 1,048 complaints relating to illegal content on its platform over the second half of that year, according to its transparency report. By contrast, transparency reports from Twitter and Google’s YouTube video service both reported well over a quarter of a million complaints for the whole year. Scarred by the memory of the two authoritarian police states on its territory over the past century, Germany has some of the world’s strictest privacy and hate speech laws, latterly combined with some of the strictest social media regulations. Source
  12. SAN FRANCISCO (Reuters) - Facebook’s Silicon Valley campus received the all-clear on Tuesday after fears that a package at its mail facility contained the nerve agent sarin. Four of the social media company’s buildings were evacuated on Monday and two people were checked for possible exposure to the compound that attacks the nervous system and can be fatal. But exhaustive testing by fire and hazardous material teams found no toxic material, said Jon Johnston, fire marshal for the city of Menlo Park in California where Facebook is based. “There is no sarin,” he told Reuters, referring to the package that had erroneously tested positive on Monday morning. Facebook routinely checks all packages and had initiated a standard safety protocol, Johnston added, saying teams worked into the early hours of Tuesday to clear the scene. Federal Bureau of Investigation (FBI) agents also went to the scene, Facebook said. No company representative was immediately available to confirm the all-clear on Tuesday. With 2.3 billion monthly active users and more than $55 billion in revenue in 2018, Facebook is massively popular around the world but also faces criticism for its control of personal information and has been subject to cyber attacks. In December, it had a bomb threat at its main campus in Menlo Park that forced the evacuation of several buildings. No bomb was found. Sarin was used in a 1995 attack by a Japanese cult on the Tokyo subway that killed 13 people and injured several thousand. More recently, Syria’s government has been accused of using sarin against insurgents during their civil war. It denies that. Source
  13. SAN FRANCISCO (Reuters) - Facebook Inc evacuated four buildings and two people were being evaluated for possible exposure to the nerve agent sarin on Monday after a package at the social media company’s Silicon Valley mail facility tested positive for the toxic compound. The people who came in contact with the suspicious package at about 11 a.m. PT (1800 GMT) did not show any symptoms of exposure to sarin, said Jon Johnston, fire marshal for the city of Menlo Park, California, where Facebook is based. “The (Facebook) facility tests all of the packages that come in and they had a positive test, so they just initiated their standard protocol. Now we’re just waiting to verify whether that’s true or not,” he said. Fire personnel were preparing to enter the mail facility at around 6 p.m. to assess the packages, Johnston said. Facebook spokesman Anthony Harrison said the company evacuated four buildings following the positive test and was cooperating with police in the investigation. “Authorities have not yet identified the substance found. As of now, three of the evacuated buildings have been cleared for repopulation,” Harrison said. Agents from the San Francisco office of the Federal Bureau of Investigation were responding to the scene, a spokesman for the agency said. Sarin, a potent toxic compound that disrupts the nervous system, has been used as a chemical weapon. Exposure can be fatal. Source
  14. PARIS (Reuters) - Facebook has agreed to hand over the identification data of French users suspected of hate speech on its platform to judges, France’s minister for digital affairs Cedric O said on Tuesday, adding the deal was a world first. The move by the world’s biggest social media network comes after successive meetings between Facebook’s founder Mark Zuckerberg and French President Emmanuel Macron, who wants to take a leading role globally on the regulation of hate speech and the spread of false information online. So far, Facebook has cooperated with French justice on matters related to terrorist attacks and violent acts by transferring the IP addresses and other identification data of suspected individuals to French judges who formally demanded it. Following a meeting between Nick Clegg, Facebook’s head of global affairs, and O last week, the social media company has extended this cooperation to hate speech. “This is huge news, it means that the judicial process will be able to run normally,” O, a former top adviser to Macron, told Reuters in an interview. “It’s really very important, they’re only doing it for France.” O, who said he had been in close contact with Clegg over the last few days on the issue, said Facebook’s decision was the result of an ongoing conversation between the internet giant and the French administration. Facebook declined to comment. The discussions started off with a Zuckerberg-Macron meeting last year, followed by a report on tech regulation last month that Facebook’s founder considered could be a blueprint for wider EU regulation. Facebook had refrained from handing over identification data of people suspected of hate speech because it was not compelled to do so under U.S.-French legal conventions and because it was worried countries without an independent judiciary could abuse it. France’s parliament, where Macron’s ruling party has a comfortable majority, is debating legislation that would give the new regulator the power to fine tech companies up to 4% of their global revenue if they don’t do enough to remove hateful content from their network. Source
  15. An Australian Court has ruled that media organizations are liable for anything defamatory that’s published to the public Facebook pages of those media companies, even if it’s just posted by a random Facebook user. The Supreme Court of New South Wales ruled today that Facebook pages controlled by the Australian media companies Fairfax, Nationwide News, and Sky News all contained defamatory content and that they should be held liable despite the fact that none of the news organizations published the content to Facebook themselves. Dylan Voller, an Aboriginal-Australian whose abuse at a youth detention facility was documented by Australia’s public broadcaster in 2016, brought the lawsuit against a number of Australian news organizations for content on their Facebook pages that was posted by third parties. Facebook commenters reportedly made false allegations that Voller had attacked a Salvation Army officer, leaving him blind in one eye. Voller never asked for the comments on Facebook to be taken down, at least according to the media companies. Previously in Australia, publishers were only liable for comments in which the subject of the defamation had asked them to be removed but failed to do so. The preliminary decision, written by Justice Stephen Rothman, ruled that responsibility for publication was “wholly in the hands of the media company that owns the public Facebook page.” The crux of Rothman’s judgment rested on the idea that the news organizations were money-making enterprises that were profiting from the encouragement of comments on their Facebook pages. “The primary purpose of the operation of the public Facebook page is to optimize readership of the newspaper (whether hardcopy or digital) or broadcast and to optimize advertising revenue,” Justice Rothman wrote. “The exchange of ideas on the public Facebook page is a mechanism (or one of the mechanisms) by which that is achieved.” But representatives for the news organizations are shocked that they should be held liable for the comments of others on Facebook. “It defies belief that media organizations are held responsible for comments made by other people on social media pages,” a spokesperson for News Corp Australia told the Sydney Morning Herald. “It is ridiculous that the media company is held responsible while Facebook, which gives us no ability to turn off comments on its platform, bears no responsibility at all. News Corp Australia is carefully reviewing the judgment with a view to an appeal.” As News Corp points out, the decision will likely be appealed to a higher court, but if it stands the ruling could have a chilling effect on speech in Australia. The nation of almost 30 million people is the only wealthy democracy in the world without some constitutional guarantee for freedom of expression. “We are very happy with the judgment as it clarifies the law around social media platforms and paves the way for a broader understanding of how defamation proceedings can protect people in the context of new technology,” Voller’s attorney told the Sydney Morning Herald. Source
  16. Jaguar is a mouse. He lives at Harvard’s Rowland Institute, where, from time to time, he plays video games on a rig that looks like it belongs in A Clockwork Orange. Metal bars position him inside a small platform in front of a metal lever; his mission is to find a virtual box’s edges by feel. To do this, he reaches with his right paw to grab the joystick, which can rotate 360 degrees, and maneuvers it until he feels feedback from the machine. When he reaches the right target area—say, an edge of the box—a tube rewards him with a dribble of sugar water. To track Jaguar’s brain activity, researchers have genetically altered him so his neurons emit fluorescent light when they fire. This light is visible through a glass plate fused to part of his skull with dental cement. A microscope affixed above the plate records images of his brain lighting up as he plays. “Within one session, you can teach them new rules and literally watch thousands of neurons learn this process and see how they change,” says Mackenzie Mathis, the neuroscientist leading the experiments. In decades past, Mathis’s insights would have served only to advance what we know about mice and brain function. Today, however, she’s one of a growing number of specialized animal researchers assisting in the development of artificial intelligence software and brain-computer interfaces. She wants to discover how mice learn, in part because it could inform how we teach computers to learn. Watching mice react to unexpected situations in video games, for instance, could someday let her pass on similar skills to robots. Other neuroscientists are studying zebra finches’ songcraft. Some are becoming expert in the electrical conductivity of sheep skulls. Still more are opting for the classics of high school biology: fruit flies, whose neural setup is relatively simple to behold, or worms, who wring considerable juice from their few neurons. Over the past few years, technology companies have been raiding universities to hire away such people. Apple, Facebook, Google, and Twitter all hired doctoral candidates from one of Mathis’s recent fellowship programs, she says. “The Ph.D. students would have jobs before they got their degrees.” Animals have long played important roles in advancing corporate science, of course, particularly for medical treatments. But the leap required to translate insights from the zebra finch’s sound-processing anatomy into Siri’s voice-recognition software—or mouse gaming into a future when Amazon.com Inc. runs all-android warehouses—is of an entirely different order. With whole new industries at stake, the race to unlock the secrets of the animal mind is getting weird. In 1958, Cornell neurobiologist Frank Rosenblatt unveiled the perceptron, one of the earliest attempts to mimic inside a computer the architecture of a brain. Its processing elements, which he called neurons, coordinated to figure out, say, whether a particular photo depicted a man or a woman—a primitive stab at image recognition. The lingo used to describe the perceptron stuck, and Facebook, Google, and other companies continue to describe their vast AI computing systems as “neural nets” with millions of neurons working in unison. The shorthand vastly exaggerates the overlap between the realms of computation and cognition even today. It’s tough to replicate something you don’t really understand. The true workings of the brain—for instance, how a group of neurons stores a memory—remain elusive to neuroscience, so the neurons’ digital counterparts can’t help but be flawed imitations. They’re rudimentary processing engines trained to perform reams of statistical calculations and identify patterns, with the imprimatur of a biological name. Still, with the technology industry chasing what’s known as artificial general intelligence, or AGI, the walls between the two realms have grown more porous. The implicit goal is a functionally sentient machine that can figure out things by itself, instead of relying on humans to train it, and that independently wants things. To the relief of some ethicists, we’re a long way from AGI, but many computer scientists and neuroscientists are betting that brains will show us the way. Separately, several companies are battling to build brain-computer interfaces that could help prostheses behave like natural limbs or allow people to download knowledge into their minds. Elon Musk’s Neuralink Corp. is one such company; another is Kernel, run by tech multimillionaire Bryan Johnson. Neuroscientists are advising these startups on everything including how to blast information through skulls and make sure electrodes don’t cause infections in test subjects. The scientific principles common to both endeavors are evident at Mathis’s Harvard lab. “Here’s our mouse palace,” she says, opening the door to a room filled with dozens of mice in plastic cages. The animals scamper around, cocking their heads and twitching their whiskers as they inspect visitors. Their clean quarters emit only a mild whiff of rodent. A red light fills the habitat to make sure the creatures, nocturnal by nature, stay awake during the day, ready to contribute to science. That science includes the virtual-box game and a much harder one that looks like a primitive form of Mario Kart. For the latter, a mouse straddles two custom, motorized circular plates, its paws nestled into grooves on either side. A screen displays a green pathway with a blue rectangle at the end. As the mouse begins to run in place, trying to approach the blue rectangle, it must steer carefully to stay on the virtual pathway. Like humans, the mice take on a glassy-eyed cast as they play. The sessions last about a half-hour before they lose interest. The microscopes peering into their brains record an incredible amount of information. “We can cover most all of their sensory, motor cortex, and decision-making areas at the same time,” Mathis says. The researchers sometimes change the games’ rules and controls—for instance, by making joystick pulls result in zigzag motions instead of straight ones—then look for differences in how the neurons light up. Mathis has also been working to shut off subsets of neurons, such as the nodes associated with learning, to check how the remaining ones react. One early insight: When it comes to decoding motion, the sensory cortex seems to play a larger role, alongside the motor cortex, than previously thought. “These neurons are doing a lot more than engaging in one specific thing,” she says. One of her primary motivations is to learn more about how animals rapidly adjust to changes in their physical environment. When you pick up an object of unknown weight, for example, your brain and body quickly compute what kind of force is needed to deal with it. Robots can’t currently do that, but one infused with the neuronal learning patterns of a mouse potentially could. Mice are an unusually strong candidate to help bridge the gap, Mathis says. Their brains are complex enough to demonstrate high-level decision-making but simple enough for the researchers to deduce the connections given enough time. We’ve only relatively recently developed computers powerful enough to capture, process, and analyze the volume of data produced by a subset of the average mouse brain’s roughly 75 million neurons. And it’s only within the last couple of years that AI software has advanced far enough to automate much of the research. Mathis and her husband, Alex Mathis, a fellow neuroscientist, have developed open source software called DeepLabCut to track their subjects’ movements. The application uses image recognition to follow a mouse’s tiny digits as it plays a game and track its reaction to the sugar-water reward. Scientists used to do this type of work manually, jotting down every sip of water in their notebooks. The software now performs in minutes tasks that once required weeks’ or months’ worth of attentive human labor. “There’s a paper on primates from 2015 where they track quite a few body parts, like knuckles and limbs and one arm, and the monkey has different tasks, like reaching for things and holding them,” Alex says. “The first author of the paper wrote me and said his Ph.D. could have been two years shorter.” More than 200 research centers now use DeepLabCut to follow all manner of animals. This type of software development and analysis attracts tech companies to neuroscientists just as strongly as their insights about animal cognition. The modern brain researcher has to know how to code and work with incredible volumes of information, much as an AI staffer at Google would to improve an advertising algorithm or the lane-merging abilities of a self-driving car. Animal-centric neuroscientists are also accustomed to working with unconventional ideas. “You tend to get creative people that are a little bit cowboy,” Mackenzie says. “People who are willing to bet their career on trying to study a black box.” Tim Otchy doesn’t do mice. He’s a bird man. A research assistant professor at Boston University, Otchy sports a tattoo of a zebra finch on his right forearm. It shows the short, squat bird with a bright orange beak sitting on a branch and gazing pensively at the sky. “I do really like birds,” he says, sitting in an office filled with books—The Cellular Slime Molds, Nonlinear Dynamics and Chaos, and Principles of Brain Evolution, to name a few. While Otchy was majoring in mechanical engineering at the Georgia Institute of Technology in the late 1990s, he also worked for a company that specialized in automating factory systems. His job was to teach robots to identify things, whether gadgets or auto parts, and sort them as they came down a conveyor belt. “It was just astounding to me how difficult it was,” he says. “These were tasks that children do.” His frustrations left him determined to uncover the inner workings of perception, decision-making, and learning. He left the factory line and, eventually, made his way to neuroscience and the zebra finch. Songbirds such as the zebra finch have an unusual skill set. Whereas most creatures know instinctively how to make noises, songbirds learn to imitate what they hear, then vary the tunes, demonstrating some semantic understanding of their songs. Decades of research have pinpointed the structure in the finch’s brain, what’s known as the song nucleus, responsible for this behavior. Studying this area has led to rich insights into how neural circuits function, in turn informing other research around how humans move, feel, and emote. Figuring out how the birds imitate one another could help explain how we do the same thing, which could prove important in, say, teaching language skills to a machine. Otchy works with about 300 birds at a BU aviary. For one experiment, a researcher will outfit a zebra finch with a backpack containing batteries that power a host of electronics attached to its skull. The bird is then placed in a sound booth about the size of a microwave, where it sings for days while Otchy and his team peer into its brain via mechanisms similar to the ones Mathis uses for her mice. As researchers have learned more about the zebra finch’s sound processing centers, they’ve sought to answer increasingly precise questions about its brain. “We don’t know how the information of how to ride a bicycle, or fly a helicopter, or speak Japanese, is stored in the brain,” Otchy says. “One day, we will have that knowledge.” He came to run this research center, the Gardner Lab, after its namesake, Tim Gardner, took a leave of absence to work at Neuralink, which seeks to augment the human brain with a superfast computer processor. The departure created considerable buzz among neuroscientists and among students excited by Musk’s vision. (Gardner, who didn’t respond to requests for comment, is moving the lab to the University of Oregon; he’ll stay on at Neuralink part time.) “It’s a fantasy at this point, but I find the idea that we could, one day in the distant future, really write information directly into the brain … amazing,” Otchy says. “I would love to be able to contribute in even a small way to figuring out how.” Birdsong researchers are among the hottest hires in a wide range of AI fields. After his dissertation at the University of California at Berkeley and a stint at Apple Inc., Channing Moore joined Google’s sound-understanding group, where he creates sound-recognition systems as sophisticated as the company’s image-recognition software, capable of distinguishing a siren from a crying baby. At Intel Corp., another Berkeley Ph.D., Tyler Lee, is drawing on his zebra finch research to improve voice processing—the type of technology that ends up in voice-command software such as Siri. “We’re trying to ask very similar questions,” he says. “How can I take auditory input, process it in a way that I can understand what a person is saying, what is the noise they’re in, what’s the environment they’re in?” Berkeley professor Frederic Theunissen, who runs the lab where Moore and Lee studied, says many potential applications arise from the focused research he oversees. “It’s a special set of skills you gain if you’re interested in automatic speech recognition, voice recognition, and so forth,” Theunissen says. Voiceprint-based security systems for phones and other devices are one example. Another is noise reduction in phone calls and videos. That application came out of Moore’s work with the noise-resistant birds. The neurons of the zebra finch are capable of isolating another finch’s song from the surrounding cacophony. Academics have been trying to declare it the age of neuroscience since the Reagan era, but in the early years of this century, the prospects for a young neuroscience graduate were low, and so were their numbers. Fifteen years ago, American universities counted fewer than 1,500 neuroscience undergrads and handed out fewer than 400 doctorates, according to the U.S. Department of Education. And even with such modest numbers, schools didn’t have enough full-time work or grant money to go around. When Drew Robson graduated from Princeton with a math degree in 2005, his undergrad counselor gave him a memorable piece of advice: Whatever you do, don’t pursue neuroscience. Robson ignored it and went on to found the Rowland Institute’s RoLi Lab with Jennifer Li, his partner and Princeton sweetheart. They’ve seen the field grow to the point that U.S. schools now award about 5,000 neuroscience bachelor’s degrees and 600 doctorates a year. “We’ve had this explosion of tools in the last 10 years,” Robson says. Team RoLi studies zebra fish, members of the minnow family whose bodies are transparent when they’re young, which allows researchers to observe their neurons without skull-plate surgeries and dental glue. A special mobile microscope Robson and Li developed helps them record which neurons are active while the fish swim. To capture different facets of zebra fish behavior, they might vary the current—leading an animal to turn away or swim harder in the same direction. “That’s many orders of magnitude more data,” Li says. “If you were to use biology, you can essentially cheat and look at what the solution should be without having to reinvent the wheel.” Robson says he wouldn’t mind trying to help Tesla solve those kinds of problems someday. The fluid borders between public and private enterprise in neuroscience have opened the question of who’ll control prospective mergers between humans and machines. The universities that long performed the most ambitious research are now rivaled by tech companies with access to larger computers and datasets. A fresh Ph.D. can expect to earn about $50,000 a year at a typical university, whereas private companies are offering well into six figures and a vastly higher ceiling beyond. Chris Fry, another zebra fincher, was earning $10.3 million a year as senior vice president for engineering at Twitter within a decade and a half of leaving Theunissen’s lab. “There is a massive exodus of talent from academia right now,” says Mackenzie Mathis, the mouse researcher. “It’s a choice to stay in academia.” Beyond the pay, many neuroscientists are drawn to the private sector because it tends to give them a chance to do more exciting, even weirder work—not to mention a break from writing grant applications. Yet decamping for Silicon Valley can also mean cutting off promising lines of research or leaving colleagues adrift. When Gardner went to work for Neuralink, one of his Ph.D. students switched schools, only to see his next eminent adviser take a leave of absence to work on his own startup. Li and Robson are heading to the government-funded Max Planck Institute for Biological Cybernetics in Tübingen, Germany, and starting in September. The fish couple stay on the public side because they like the freedom and flexibility of what Robson calls the “playground setting.” Yes, the animal experiments can do unnatural things to harmless, helpless creatures. They can also encourage a humanizing perspective—something we might want to see AI exhibit. Four years ago, before they’d finished their trackable microscope, Li and Robson were using an adhesive gelatin to keep young zebra fish swimming in place for a couple of hours, to measure how their neurons lit up. One morning the two arrived at the lab to find a big surprise: A larva they’d left swimming was still going 18 hours later, far beyond what they’d expected. “This animal was a champion,” Robson says. “Perfect,” Li adds. “His behavior was perfect.” Because of the rigors of the experiment, the researchers couldn’t save their hero for posterity, but they did the next best thing: Li and Robson installed his mom in a special aquarium as their pet. They named her Fred, after Amy Acker’s whip-smart character from the TV show Angel. Robson and Li say the development of AI and brain-computer interfaces is going to force humans to become more humane. After all, if one of our goals is to imbue thinking machines with our own morals, we’ll have to grapple more than we’re used to with what morality is. Questions like: Who deserves the power of enhanced thought? Should a self-driving car choose to save a passenger over a pedestrian? And how smart do machines have to get before they’re considered part of that equation? “That’s a fundamentally very moral question—how do you value life?” says Li, who studied philosophy as an undergrad. “It forces us to be rigorous in what our morality really boils down to,” Robson says. “You have to commit to something.” Source
  17. Key Points Central bankers around the world say Facebook should expect regulatory questions over its new cryptocurrency. Libra, announced earlier this week, is backed by a basket of bank deposits and short-term government securities. Fed Chairman Jerome Powell also says he's spoken with Facebook about the digital currency. Facebook will find itself dealing with plenty of regulatory questions about its new cryptocurrency, central bankers around the world said Thursday. The social network detailed plans for its virtual currency, called Libra, earlier this week, a move that almost instantly provoked a reaction from politicians and regulators alike. France's Finance Minister Bruno Le Maire warned against Facebook's crypto becoming a "sovereign currency," hours after Facebook's announcement, while a German politician called the company a "shadow bank." Meanwhile, the U.S. Senate Banking Committee recently called on the tech giant to join a hearing on its ambitions to create a virtual currency. Now, several central bankers are also weighing in on the debate. "I think there's a lot of water to flow under the bridge before Facebook's proposal becomes something that we're using all the time," Reserve Bank of Australia Governor Philip Lowe said at a press conference Thursday. "There are a lot of regulatory issues that need to be addressed, and they've got to make sure there's a solid business case." What is Libra? Facebook's token will take the form of a stablecoin, a digital currency that's asset-backed — usually by currencies like the dollar — to avoid the volatility seen in most cryptocurrencies. In Facebook's case, the currency is backed by a basket of bank deposits and short-term government securities. Libra is being overseen by a wide consortium of firms ranging from payments companies like Visa and Mastercard to tech giants like eBay and Uber. It's set to launch in 2020. Experts have said that, while Facebook's crypto project is a good sign for the industry, potentially driving more adoption, regulation could be a key hurdle for the venture. "It does seem clear that something like this could be very important from a regulatory point of view," said Bank of England Deputy Governor Sam Woods, quoted by Reuters news agency. Mark Carney, the U.K. central bank's governor, had already said earlier this week that Facebook's crypto project should expect to face the "highest standards of regulations." 'High expectations' Indonesia's central bank reportedly also commented on the matter of Facebook's token Thursday, saying the company's plans should be reviewed. Federal Reserve Chairman Jerome Powell, meanwhile, said Wednesday that he had spoken to Facebook about Libra. Powell said the Fed will have "high expectations" for the currency in terms of how safe it is and whether it complies with financial laws. The world's best-known cryptocurrency, bitcoin, was created with the aim of taking financial institutions out of the picture. It's faced plenty of regulatory questions, particularly due to its use in illegal transactions and speculative trading. Jeff Sloan, the CEO of U.S. payments firm Global Payments, said regulatory oversight for Libra would be a welcome sign. "At the end of the day, it's important for consumers to have confidence in the systems in which we operate," he told CNBC's "Squawk Box Europe. " "We're already highly regulated, so we welcome more prudent regulation, and we welcome a level playing field where our competitors are in the same way." Given that Facebook is working with established players like Visa and Mastercard, it has the benefit of having partners that are experienced in dealing with existing regulations, Sloan said. Source
  18. WASHINGTON (Reuters) - Facebook Inc’s plans to create a global cryptocurrency will face scrutiny from the U.S. Senate Banking Committee on July 16, the latest sign that policymakers around the globe are casting a wary eye on the project. The hearing will explore the project, dubbed Libra, as well as any data privacy considerations it may raise, the committee said on Wednesday. No witnesses have been announced yet, according to a committee spokesperson. David Marcus, who oversees Facebook’s blockchain efforts, is expected to testify, according to a source in Washington familiar with the matter. The announcement comes one day after the social media giant unveiled plans to launch a global cryptocurrency, which immediately attracted attention from regulators across the globe, and skepticism from Washington. Representative Maxine Waters, the Democrat who chairs the House Financial Services Committee, said Tuesday she planned to similarly call Facebook to testify, and asked the company to halt the project while policymakers studied it. In May, the leaders of the Senate Banking Committee wrote to Facebook seeking information on rumors of its cryptocurrency project, and how it would protect consumer information. On Tuesday, a Facebook representative said the company looked forward to answering lawmaker questions. The company did not immediately respond to a request for comment on the July 16 hearing. Facebook hopes to launch the Libra in the first half of 2020. They hope it will not only power transactions between established consumers and businesses globally, but offer unbanked consumers access to financial services for the first time. Before Tuesday’s announcement, Facebook was already facing significant backlash over mishandling user data and not doing enough to prevent Russian interference in the 2016 U.S. presidential election. Those issues have led some government officials to call for Facebook to incur penalties, or be forcibly broken up. Source
  19. aum

    Bodies in Seats

    At Facebook’s worst-performing content moderation site in North America, one contractor has died, and others say they fear for their lives Content warning: This story contains descriptions of violent acts against people and animals, accounts of sexual harassment and post-traumatic stress disorder, and other potentially disturbing content. First, he served in the Coast Guard, where he rose to the rank of lieutenant commander. He married, had a family, and devoted himself utterly to his two little girls. After he got out of the military, he worked as a moderator for Facebook, where he purged the social network of the worst stuff that its users post on a daily basis: the hate speech, the murders, the child pornography. Utley worked the overnight shift at a Facebook content moderation site in Tampa, FL, operated by a professional services vendor named Cognizant. The 800 or so workers there face relentless pressure from their bosses to better enforce the social network’s community standards, which receive near-daily updates that leave its contractor workforce in a perpetual state of uncertainty. The Tampa site has routinely failed to meet the 98 percent “accuracy” target set by Facebook. In fact, with a score that has been hovering around 92, it is Facebook’s worst-performing site in North America. The stress of the job weighed on Utley, according to his former co-workers, who, like all Facebook contractors at the Tampa site, must sign a 14-page nondisclosure agreement. “The stress they put on him — it’s unworldly,” one of Utley’s managers told me. “I did a lot of coaching. I spent some time talking with him about things he was having issues seeing. And he was always worried about getting fired.” On the night of March 9th, 2018, Utley slumped over at his desk. Co-workers noticed that he was in distress when he began sliding out of his chair. Two of them began to perform CPR, but no defibrillator was available in the building. A manager called for an ambulance. The Cognizant site in Tampa is set back from the main road in an office park, and between the dim nighttime lighting and discreet exterior signage, the ambulance appears to have had trouble finding the building. Paramedics arrived 13 minutes after the first call, one worker told me, and when they did, Utley had already begun to turn blue. ... Read the full story at: Source
  20. SAN FRANCISCO/NEW YORK (Reuters) - Facebook Inc announced ambitious plans on Tuesday to launch a new global cryptocurrency called Libra, part of an effort to expand into digital payments that immediately raised privacy concerns. The social networking giant has linked with 28 partners including Mastercard, PayPal and Uber to form Libra Association, a Geneva-based entity governing the new digital coin, according to marketing materials and interviews with executives. No banks are yet part of the group. To facilitate transactions, Facebook also created Calibra, a subsidiary that will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook messaging platforms Messenger and WhatsApp. The whole system is scheduled to launch in the first half of 2020. Facebook executives and others associated with Libra have big aspirations. They hope it will not only power transactions between established consumers and businesses globally, but offer unbanked consumers access to financial services for the first time. Facebook is also betting Libra can squeeze more revenue out of its suite of apps, something already happening on Chinese social networks like WeChat. Representative Maxine Waters, chairwoman of the U.S. House Financial Services Committee, called for Facebook executives to testify before Congress and asked the company to halt development of Libra until lawmakers and regulators have reviewed the project. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users,” Waters said in a statement. Other regulators, lawmakers and government officials around the globe also quickly issued critical statements. France’s finance minister said he had asked central bank heads from G7 countries to write a report on the project by mid-July. Source
  21. SAN FRANCISCO/NEW YORK (Reuters) - Facebook Inc revealed plans on Tuesday to launch a cryptocurrency called Libra, the latest development in its effort to expand beyond social networking and move into e-commerce and global payments. Facebook has linked with 28 partners in a Geneva-based entity called the Libra Association, which will govern its new digital coin set to launch in the first half of 2020, according to marketing materials and interviews with executives. Facebook has also created a subsidiary called Calibra, which will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook’s messaging platforms Messenger and WhatsApp, which already boast more than a billion users. The Menlo Park, California-based company has big aspirations for Libra, but consumer privacy concerns or regulatory barriers may present significant hurdles. Facebook hopes it will not only power transactions between established consumers and businesses around the globe, but offer unbanked consumers access to financial services for the first time. The name “Libra” was inspired by Roman weight measurements, the astrological sign for justice and the French word for freedom, said David Marcus, a former PayPal executive who heads the project for Facebook. “Freedom, justice and money, which is exactly what we’re trying to do here,” he said. Facebook also appears to be betting it can squeeze revenue out of its messaging services through transactions and payments, something that is already happening on Chinese social apps like WeChat. The Libra announcement comes as Facebook is grappling with public backlash due to a series of scandals, and may face opposition from privacy advocates, consumer groups, regulators and lawmakers. Some Facebook adversaries have called for the company to incur penalties, or be forcibly broken up, for mishandling user data, allowing troubling material to appear on its site and not preventing Russian interference in the 2016 presidential election through a social media disinformation campaign. It is not clear how lawmakers or regulators will react to Facebook making a push into financial services through the largely unregulated world of cryptocurrency. In recent years, cryptocurrency investors have lost hundreds of millions of dollars through hacks, and the market has been plagued by accusations of money-laundering, illegal drug sales and terrorist financing. Facebook has engaged with regulators in the United States and abroad about the planned cryptocurrency, company executives said. They would not specify which regulators or whether the company has applied for financial licenses anywhere. Facebook hopes it can bring global regulators to the table by publicizing Libra, said Kevin Weil, who runs product for the initiative. “It gives us a basis to go and have productive conversations with regulators around the world,” said Weil. “We’re eager to do that.” MAJOR PARTNERS Bitcoin, the most well-known cryptocurrency, was created in 2008 as a way for pseudonymous users to transfer value online through encrypted digital ledgers. Early developers believed that the world needed an alternative to traditional currencies, which are controlled by governments and by central banks. Since then, thousands of bitcoin alternatives have launched, and Facebook is just one of dozens of blue-chip companies dabbling with the underlying technology. But its status as a Silicon Valley behemoth that touches billions of people around the world has created significant buzz around Libra’s potential. Partners in the project include household names like Mastercard Inc, Visa Inc, Spotify Technology SA, PayPal Holdings Inc, eBay Inc, Uber Technologies Inc and Vodafone Group Plc, as well as venture capital firms like Andreessen Horowitz. They hope to have 100 members by Libra’s launch during the first half of 2020. Each member gets one vote on substantial decisions regarding the cryptocurrency network and firms must invest at least $10 million to join. Facebook does not plan to maintain a leadership role after 2019. Though there are no banks among the inaugural members, there have been discussions with a number of lenders about joining, said Jorn Lambert, executive vice president for digital solutions at Mastercard. They are waiting to see how regulators and consumers respond to the project before deciding whether to join, he said. The Libra Association plans to raise money through a private placement in the coming months, according to a statement from the association. PRIVACY, REGULATORY CONCERNS Although Libra-backers who spoke to Reuters or provided materials are hopeful about its prospects, some expressed awareness that consumer privacy concerns or regulatory barriers may prevent the project from succeeding. Calibra will conduct compliance checks on customers who want to use Libra, using verification and anti-fraud processes that are common among banks, Facebook said. The subsidiary will only share customer data with Facebook or external parties if it has consent, or in “limited cases” where it is necessary, Facebook said. That could include for law enforcement, public safety or general system functionality. Transactions will cost individuals less than merchants, Facebook said, though executives declined to provide specifics. Each Libra will be backed by a basket of government-backed assets. The company plans to refund customers who lose money because of fraud, Facebook said. Sri Shivananda, Paypal’s chief technology officer said in an interview that the project is still in its “very, very early days,” and there were conversations in progress with regulators. Mastercard’s Lambert characterized Libra similarly, noting much needed to happen before the launch. If the project receives too much regulatory pushback, he said, “we might not launch.” Source
  22. Hundreds of active and former police officers are part of extremist Facebook groups An investigation from Reveal News identified nearly 400 current and former police officers Illustration by Alex Castro / The Verge Hundreds of active and retired police officers and law enforcement personnel are congregating in private Facebook groups where they engage in open racism, Islamophobia, and even lend support to violent, anti-government groups, according to an investigation from nonprofit news organization Reveal, which is run by the US Center for Investigative Reporting. After Reveal notified law enforcement agencies, more than 50 departments have reportedly opened internal investigations. In some cases, departments say they’ll be evaluating officers’ online activity to see if it may have influenced past policing conduct. At least one officer has been fired for violating department policies as a result of participating in these groups, some of which bear names like “White Lives Matter” and “Death to Islam Undercover.” Reveal reports that the groups contain a full range of right-wing political ideologies, from standard conservativism to far-right initiatives that center around outright racism and Islamophobia. Some go even further: some Facebook groups surveyed by Reveal were associated with anti-government and militia movements, like the Oath Keepers. Reveal says that 150 of the 400 or so officers that it identified as belonging to these groups were part of that more extreme end. REVEAL IDENTIFIED NEARLY 400 CURRENT AND FORMER LAW ENFORCEMENT PERSONNEL ENGAGING IN THESE GROUPS The unifying thread to all of these Facebook groups is that they are frequented and sometimes founded and operated by active and retired police officers, and that they actively recruit other police officers to join. Reveal reports that members of small rural departments and officers in the largest precincts in the nation, in Los Angeles and New York City, are participating in these groups. Reveal’s findings are troubling for Facebook’s ongoing moderation efforts. Like most of Silicon Valley’s large social platforms that host media and speech, Facebook is struggling to deal with its outsize impact on society; the company has neither the resources nor the wherewithal to combat the flood of hate groups, extremism, and misinformation on its platform. In some rare but tragic cases, activity on platforms like Facebook and Google’s YouTube has contributed to the radicalization of certain individuals who go on to commit offline violence. And in some disturbing cases, like the Christchurch shooting earlier this year, that offline violence is then rebroadcast on Facebook and YouTube for maximum effect. Facebook has leaned on artificial intelligence as a kind of panacea for its moderation woes. But at the F8 developer conference earlier this year, Facebook also announced a shift away from the News Feed and toward private groups as a way to lessen the influence of its algorithms. The shift also, in a way, absolves the company of responsibility for moderation. If public posts and pages wane in favor of private group activity, the logic is that those groups will self-moderate, and that by nature of being private they’ll reduce the reach of potentially harmful activity, too. FACEBOOK THINKS PRIVATE GROUPS WILL TAKE THE PRESSURE OF ITS ALGORITHMIC NEWS FEED But there’s no evidence to suggest Facebook is taking a more active role in moderating these groups’ activities — in fact, the opposite appears to be true. And the notion of active duty police officers with access to firearms participating openly in bigotry and potentially violent online behavior is worrisome for how it could translate into offline actions in the future. Facebook bans content that targets individuals based on their skin color or religion under its hate speech policies, and it also has rules around violent incitement and groups that have been known to organize and take action offline. It’s taken action against groups like far-right figure Gavin McInnes’ Proud Boysand individuals like conspiracy theorist Alex Jones for violations of those policies. But it’s often difficult for Facebook to take such action against individuals without large followings or specific groups if those groups are private and if those groups have taken measures to conceal the nature of their purpose. As such, some organizations on Facebook use coy in-jokes and other far-right dog whistling tactics to circumvent Facebook’s algorithmic filters. So a group with the phrase “Ku Klux Klan” in its title will easily get taken down, but one titled “Confederate Brothers & Sisters” will go unnoticed. Reveal says it identified these officers with a strategy that, ironically enough, involved using data Facebook has since stopped providing to third-parties due to developer misuse. Yet it’s this data that allows watchdogs like Reveal to do the investigations Facebook seemingly won’t. Reveal says it could not initially assume that every member in a police Facebook group was an actual officer or even a retired one. They could have been individuals with general affinity and respect for law enforcement, relatives of officers, or those who aspire to join the police. So Reveal says it did research on hundreds of individuals, sometimes calling local departments to confirm active employment or retirement status. Reveal also joined dozens of these groups to verify its findings. “Ultimately, we confirmed that almost 400 users were indeed either currently employed as police officers, sheriffs or prison guards or had once worked in law enforcement,” the report reads. It is not clear at the moment how Facebook plans to review these groups or under what policies it might take action. Meanwhile, Reveal reports that the law enforcement agencies it contacted are continuing to conduct their own investigations into the officers’ online and offline conduct. Facebook was not immediately available for comment. Source
  23. Facebook seals cryptocurrency deal with Visa, Mastercard, PayPal: report Updated: Reports suggest the new virtual coin will be revealed next week with the backing of major companies. Facebook is reportedly gearing up to announce its own brand of cryptocurrency next week with the backing of over a dozen major financial organizations. According to the Wall Street Journal, Facebook's venture into the cryptocurrency space has been strengthened with the support of companies including Visa, Mastercard, PayPal, and Uber. In total, the group of backers will invest roughly $10 million each into the venture, the publication says, and these funds will be used for the development of the coin, as well as the infrastructure and blockchain required to support it. Cryptocurrency, first created as an alternative to mainstream banks and fiat currency, often experiences swings in value in what is usually a turbulent market. However, as traditional financial organizations began to explore the possibilities of virtual coins and the blockchain, the idea of tying virtual to fiat currency has become an option to stabilize value. In Facebook's case, the company's coin will be "pegged to a basket of government-issued currencies," the WSJ says. Facebook has reportedly already initiated talks with brokers and banks to allow its future cryptocurrency users to exchange their coins for fiat currency. Rumors have been swirling around Facebook's cryptocurrency for months, and it is believed the coin would be used to send funds not only through the social media platform but also for purchases made through partner retail websites in return for transaction fees which are lower than what standard banks offer. However, nothing has been set in stone and even some of the backers are not aware of their roles in the future cryptocurrency project or the direction Facebook will take. The consortium of backers is known as the Libra Association and a white paper describing the coin and its blockchain-based infrastructure is reportedly due to be published next week. In May, it came to light that a new financial services organizations called Libra Networks had been registered in Switzerland by Facebook. The company has been described as a developer of financial technologies, the blockchain, and data analytics. It is not known whether the cryptocurrency itself will be known as Libra, or whether past reports which cited the name "GlobalCoin" are more accurate. Either way, the formal launch of the cryptocurrency may take place as soon as Q1 2020. Update 13.51 BST: A Facebook spokesperson told ZDNet: "Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications." Source
  24. Deactivation does nothing for your privacy. I thought deactivating my Facebook account would stop the social network from tracking me online. But Facebook kept tabs on me anyway. Over the past year, I've tried to minimize my presence on Facebook. I deleted a 10-year-old account and replaced it with a dummy account that I use as little as possible. I deleted the app from my phone. As of January, I started deactivating my dummy account every time I used it, rather than just log out. I couldn't break up completely with Facebook because I needed it to sign up twice a week for a workshop. I thought the precautions would reduce how much data Facebook gathered about me. Turns out, I was wasting my time. Even when your account is deactivated, the social network continues collecting data about your online activities. All that data gets sent back to Facebook and is tied to your account while it's in this state of limbo. It's as if you'd changed nothing. Facebook says it only removes all of your data if you permanently delete your account. Deactivating isn't as extreme, the company says, and the social network continues collecting your data in case you change your mind and want to return to your profile. Facebook expects deactivated users to return and wants to continue serving them ads relevant to their new interests. 'A deceptive practice' On the site, Facebook explains that deactivating is a half-step to complete deletion. But it says little about how data collection works during the period. In its data policy, Facebook suggests deactivation to manage your privacy but doesn't mention that it still collects data during that period. The ongoing collection of data from deactivated accounts could be considered misleading, privacy experts warn. "Most people would expect less or no data collection during a deactivated period," said Gabriel Weinberg, CEO and founder of private search engine DuckDuckGo. "Deactivated means cease to operate, and you wouldn't expect all the wheels to be turning." The average person would assume that Facebook pauses data collection when your account is deactivated, said Kathleen McGee, the former chief of the New York State attorney general's Internet Bureau. People could look at deactivating accounts and mistake it for an opt-out when it isn't, she explained. "For consumer transparency purposes, I would be concerned that this is a deceptive practice," said McGee, now a technology counsel at the Lowenstein Sandler law firm. The vague disclosure the social network provides is another point of concern about its privacy protections. In March 2018, Facebook found itself in hot water after Cambridge Analytica, a British consultancy, was collecting information about people on the social network through several personality quizzes. The backlash prompted a campaign encouraging people to delete their Facebook accounts. The Pew Research Center found that 42 percent of Americans have taken a break from the social network at some point during the last year. Active tracking Facebook already monitors online activity, including the browsing habits of members who have logged out or people who don't have accounts. In the latter case, the social network doesn't have the names of individuals but can still customize ads based on browsing. It does this with tools like Facebook Pixel and plugins such as the Share button on pages. The social network's Share button is on 275 million web pages. It collects data allowing advertisers to see what kind of content you're viewing. That's why you're likely to see ads for sports in your Facebook feed if you've been visiting a lot of sports websites. If you aren't a member, the social network can follow your activity through your browsers and deliver ads using its Facebook Audience Network, the company detailed in 2016. The service uses your browsing habits to target ads as you surf the internet, just as it would if you were on Facebook. Even if you don't have an account, Facebook is following you. Facebook said deactivating your account was never intended to be a measure for data privacy but rather for privacy from other people on Facebook. Source
  25. Employees within Facebook have dug up “emails that appear to connect Chief Executive Mark Zuckerberg to potentially problematic privacy practices” in the course of responding to a Federal Trade Commission investigation, the Wall Street Journal reported on Wednesday, citing “people familiar with the matter.” The Journal was not able to review the emails directly, but wrote they could complicate efforts at Facebook to quickly reach a settlement with the FTC over alleged violations of a 2012 agreement known as a consent decree. That agreement resolved charges that Facebook “deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public,” according to the FTC. To avoid penalties, the agency required the company agree to obtain “express consent before sharing [users’] information beyond their privacy settings” as well as implement a “comprehensive privacy program to protect consumers’ information.” At least one of the email chains from April 2012 (after the decree was announced but before it went into effect) appears to show Facebook and Zuckerberg “grappling” with what type of practices it should permit under the order, namely a third party service that claimed to be offering access to user profiles no matter what privacy settings they had enabled. The Journal wrote: In one email exchange from April 2012 that has caught regulators’ attention, according to a person familiar with the matter, Mr. Zuckerberg asked employees about an app that claimed to have built a database stocked with information about tens of millions of Facebook users. The developer had the ability to display that user information to others on its own site, regardless of those users’ privacy settings on Facebook, the person said. According to the Journal (paraphrased), Zuckerberg replied asking “if such extensive data collection was possible” and whether Facebook should do something about it. A staffer responded in the affirmative to the first question, adding that it was common practice, but that it was a “complicated issue.” Facebook later suspended the specific app, but did not do much to change its platform in response; similar issues blew up in the company’s face over the course of the past year as privacy scandals including the sprawling Cambridge Analytica mess were revealed. Facebook staff have also expressed concern that the content of the emails could damage the company’s reputation and make it look like Zuckerberg doesn’t care about privacy (duh!), the Journal added. It’s unclear whether additional emails are involved. “We have fully cooperated with the FTC’s investigation to date and provided tens of thousands of documents, emails and files. We are continuing to work with them and hope to bring this matter to an appropriate resolution,” a Facebook spokesperson told the paper. “... At no point did Mark or any other Facebook employee knowingly violate the company’s obligations under the FTC consent order nor do any emails exist that indicate they did.” Reports have indicated that Facebook expects to pay up to a record-setting $5 billion in a settlement with the FTC, but the agency is still mulling naming Zuckerberg as a respondent in its official complaint—something that could make the CEO personally liable for any future violations and would likely push Facebook into fighting the FTC in court, according to the Journal. But such a court battle would risk sensitive Facebook documents such as the aforementioned email going public. Source
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