Silicon Valley Tech News Roundup – March 12th

Regulators close Silicon Valley Bank – 3/10

On Friday, the Federal Deposit Insurance Corporation (FDIC) announced it closed and took over the control of deposits of Silicon Valley Bank (SVB). FDIC created the Deposit Insurance National Bank of Santa Clara that now holds the Silicon Valley Bank’s insured deposits. According to the announcement, insured depositors will gain access to their deposits by Monday morning, and the bank’s branches will open.

The FDIC insurance covers up to$250,000 per depositor, per bank, and per account ownership category. However, it remains unclear whether the depositors with more than $250,000 will get all their money back. It will depend on how much money the FDIC gets after selling SVB’s assets or if another bank takes ownership. Based on the press release by SVB in December, the bank had around $209 billion in total assets and $175.4 billion in total deposits.

Silicon Valley Bank is one of the key players in the tech and venture capital community. Experts consider its collapse the biggest bank failure since the global financial crisis ten years ago. There are growing concerns in the tech and startup communities that some companies will be unable to make payroll as this crisis unfolds. Many in the tech and finance community started calling out the federal government to appoint another bank to assume SVB’s assets and obligations. Based on the regulatory filings, 95% of bank deposits were uninsured as of December last year.

TikTok whistleblower – data protections do not prevent Chinese access – 3/10

In an interview with the Washington Post, a TikTok whistleblower claims the company’s policy plan “Project Texas” does not go far enough to protect U. S. users’ data from potential Chinese espionage. According to the whistleblower, it would require a “complete re-engineering” of the app in order to protect data from Chinese employees. The Washington Post reports the whistleblower met with several U.S. senators to express these concerns.

The whistleblower used to work for the Trust and Safety Team for six months. As a part of his job, he was privy to who had access to some tools and user data. According to him, the company fired him after he spoke up about his data concerns.

TikTok’s spokesperson refuted the allegations: “Anyone who left the company in February of 2022 would have no knowledge of the current status of Project Texas and the many significant milestones the initiative has reached over the last year in our efforts to further safeguard our community and our platform in the United States.” The spokesperson for the company also stated Project Texas means full re-engineering of the app.

Another TikTok whistleblower came forward earlier in the week in a letter to ByteDance by Rep. Josh Hawley of Missouri. According to that whistleblower, TikTok’s access controls on U. S. data are “superficial” at best. Likewise, he claims TikTok and ByteDance employees can “switch between Chinese and U.S. data with nothing more than the click of a button.” Further, he added: “I have seen first-hand China-based engineers flipping over to non-China datasets and creating scheduled tasks to backup, aggregate, and analyze data… TikTok and ByteDance are functionally the same company.”

TikTok launches Project Clover in the EU – 3/8

In an announcement published on TikTok’s website this week, Theo Bertram (Vice President, Government Relations and Public Policy at TikTok) announced the launch of Project Clover. Its aim is to ease fears TikTok could be forced to share EU user data with China. The statement reads: “Project Clover is a program focused on creating a secure enclave for European TikTok user data. This initiative will introduce a number of new measures to strengthen existing protections and further align our overall approach to data governance with the principle of European data sovereignty.”

The company claims “security gateways” will add another security level and give more control over employee’s access to European user information and data transfers outside of Europe.

TikTok also announced its plans to create two more data centers in Dublin and Hamar region in Norway. The company announced plans for one data center in Dublin last year. Third-party service providers will operate the data centers. TikTok stated: “We will begin storing European TikTok user data locally this year, with migration continuing into 2024. Once operational, these three data centers will represent a total annual investment of €1.2 billion.”

Meta working on Twitter rival – 3/11

Meta is working on a text-based social networking app that could rival Twitter and Mastodon. According to the news published by MoneyControl, the code name for the new app is P92, and users would be able to log in using their Instagram details. Likewise, the app will be based on the framework used by Mastodon and decentralized. It cannot be sold or bought.

A spokesperson for Meta confirmed the news to the BBC: “We’re exploring a standalone decentralized social network for sharing text updates… We believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests.”

The news comes when Twitter is still in disarray after Musk’s takeover late last year. The company has been struggling to hold on to its advertisers as many companies pulled back their spending after the release of a paid verification feature that enabled imposters to take over prominent accounts.