Silicon Valley Tech News Roundup – May 7th

Vice President Kamala Harris meets with technology executives to discuss AI – 5/4

On Thursday, Vice President Kamala Harris met with the technology executives at the White House to discuss the dangers of Artificial Intelligence. Sundar Pichai (the CEO of Google), Sam Altmann (the CEO of OpenAI), and Satya Nadella (the CEO of Microsoft) attended the meeting.

In a statement released after the meeting, Vice President Kamala Harris said even though the technology has the potential to improve lives, it poses a risk to privacy, civil rights, and safety. Tech companies have “an ethical, moral, and legal responsibility to ensure the safety and security of their products.” Further, she added the Biden administration is open to implementing new regulations to cover Artificial Intelligence. The National Science Foundation will invest $140 million to open seven new AI research institutes.

Following the meeting, Sam Altmann (the CEO of OpenAI and the company behind ChatGPT) said to the media the tech executives were “surprisingly on the same page on what needs to happen.”

FTC wants to bar Meta from monetizing children’s data – 5/4

The Federal Trade Commission (FTC) accused Meta of weaknesses in its privacy program and claimed they posed “substantial risks to the public.”

The FTC claims independent assessors concluded the company violated the Children’s Online Privacy Protection Rule (the COPPA Rule). It requires parental consent for websites to collect personal information for children under 13. FTC claimed Meta stated children would only be able to engage with contacts approved by their parents. However, in some instances, children could communicate with additional contacts not vetted by parents. The statement reads: “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.” Likewise, Meta also allowed third-party apps access to private data even though the company stated it would cut off access if users did not use the app in the previous 90 days.

Some of the proposed actions by the FTC include a blanket prohibition of monetizing data of users 18 and younger and limiting future use of facial recognition technology. FTC also wants Meta to pause new launches of any products until it is established they are following privacy regulations.

Andy Stone (Meta’s spokesperson) called the move “a political stunt.” Further, he added the FTC singled Meta “while allowing Chinese companies, like TikTok, to operate without constraint on American soil,” and he accused Lina Khan (the Chair of FTC) of antagonizing American businesses. Stone said: “We have spent vast resources building and implementing an industry-leading privacy program under the terms of our FTC agreement. We will vigorously fight this action and expect to prevail.”

New York State proposes the CRPTO Act – 5/5

New York State’s Attorney General Letitia James proposed a new law called Crypto Regulation, Protection, Transparency and Oversight (the CRPTO Act). Its purpose is to protect investors and prevent cryptocurrency fraud.

The new regulation would require companies to provide financial statements and risk disclosures. Likewise, it would prevent conflict of interest stemming from companies owning multiple practices or marketplaces that trade for their own accounts. The law also proposes several safeguards including a ban on stablecoins, compensation for fraud victims, and “know-your-customer” requirements.

The office of the Attorney General would be able to require damages and penalties, issue subpoenas, and shut down and fine lawbreakers. The fines would be $10,000 for individuals and $100,00 for companies.

Justice Department investigating Binance for allegedly violating Russian sanctions – 5/6

Based on the report published by Bloomberg, the US Justice Department is investigating the cryptocurrency exchange Binance for potentially violating sanctions imposed on Russia. According to the report, Binance allowed Russian customers to transfer money to avoid US sanctions on Russian financial institutions. After Russia invaded Ukraine, The European Union and the United States imposed sanctions on Russian financial institutions. Binance was one of the crypto exchanges that refused to freeze Russian and Belarus accounts.

In 2021, the US Justice Department and the Internal Revenue Service started investigating Binance for potential money laundering. According to the Bloomberg report, Binance is also looking to settle with the Justice Department after the agency started investigating allegations customers used the cryptocurrency exchange to transfer money and avoid US sanctions against Iran.

Binance responded to the allegations published in Bloomberg’s report. The statement reads: “In 2021, Binance launched an initiative to completely overhaul its corporate governance structure, including bringing in a world-class bench of seasoned executives to fundamentally change how Binance operates globally… Our policy imposes a zero-tolerance approach to double registrations, anonymous identities, and obscure sources of money.”