CRYPTO

When Westphalian Sovereignty Meets Distributed Ledgers

There’s chatter in cryptocurrency circles that winter may be coming. Will prophecies of a prolonged bear market turn out to be true? Who knows. But one trend appears certain: More regulation is coming down the pike. 

A bloc-by-block breakdown

Last month, the Treasury Department proposed requiring hodlers to disclose any crypto transaction worth ≥$10,000 to the IRS. The SEC, meanwhile, has slow-rolled a ruling on WisdomTree’s proposed bitcoin ETF. The fund would track bitcoin and make it easier for institutional investors like mutual funds to directly invest in the cryptocurrency.

• Maybe related? A bipartisan cohort of lawmakers has indicated they oppose the greenlighting of crypto ETFs. 
• Finally, yesterday, SEC Chairman Jay Clayton and former Under Secretary of the Treasury Brent McIntosh wrote in the WSJ that crypto needs regulation using existing rules. 

New Delhi has walked back proposals for a wholesale ban of cryptocurrencies. Last week, the Reserve Bank of India (IRB) circulated a memo saying banking services should not be denied to crypto traders. That measure, first proposed by the IRB in 2018, was struck down by India’s Supreme Court in March 2020. 

• While this is good news for India’s crypto community, it doesn’t mean the country will backslide into full-on laissez faire policy for digital assets. The IRB has indicated it still has major concerns with cryptocurrency. 

As Beijing cracks down on bitcoin mining, the country’s biggest players are moving their farms elsewhere and “fire-selling” rigs, one US exec told Wired. 

Nothing new to report from Brussels, which published new rules for crypto assets in January. But last week, Sweden’s finance minister said crypto exchange regulation is a work in progress “at the international level.” 

• What is new from the EU = a European Investment Bank report that the Continent is falling behind the US and China in blockchain and AI investment. 
• The EU is focused on boosting its technological prowess on the international stage. This economic and geopolitical framing could temper calls for a stiffer strong-arm of cryptocurrencies. 

On Sunday, El Salvador’s President Nayib Bukele propose  making bitcoin legal tender. The measure is likely to pass in Congress, where his party has a supermajority. 

Bottom line: As crypto gains mainstream adoption globally, most countries are headed for a middle ground between laissez faire and blanket ban.—RD

AI

NYC’s sprawling surveillance web

A new Amnesty International report found that the NYPD has a sprawling network of at least 15,280 surveillance cameras it can connect to facial recognition software. 

• That figure only covers Manhattan, the Bronx, and Brooklyn, meaning Staten Island and Queens—the second-most populous borough—aren’t accounted for.
• The NYPD has used facial recognition in 22,000+ cases since 2017, per FOIA requests by NYC-based Surveillance Technology Oversight Project (STOP). 

Why it matters: Police use of facial recognition has prompted intense backlash from citizens, activists, and lawmakers, both due to general privacy concerns and also because the tech is biased against people with darker skin tones. Several cities, including Portland, Boston, and San Francisco, have banned police use of the tech, but not NYC. 

The NYPD’s facial recognition program is one of the most expansive in the country, according to Albert Fox Cahn, founder and director of STOP. 

• “I’m not aware of a city that has disclosed a higher number of facial recognition searches for a single municipality,” he told us. “But that doesn’t mean it’s not happening.”
• Fox Cahn added that Amnesty’s report only covers municipal cameras, but the NYPD also uses “tens of thousands of additional cameras” via partnerships with private entities, like corporate offices.

Amnesty’s report comes nearly a year after the Public Oversight of Surveillance Technology Act passed in New York City, which requires the NYPD to disclose its surveillance tech (e.g., drones, geolocation devices). Initial disclosures happened in January, but Fox Cahn said the detail was insufficient and STOP is considering litigation to force greater transparency.

Looking ahead... Fox Cahn said the outcomes of NYC’s June 22 mayoral and city council primaries will play a big role in whether the city moves to ban the tech. New York’s State Senate is also currently considering a bill to regulate facial recognition, and we recently reported that federal regulation will be reintroduced soon.—DM

AV

Google Maps + Waymo Ridehail = Goober?

Alphabet’s autonomous ridehailing arm is integrating with the maps service of Google, the holding company’s favorite child. 

How does it work?

In a sense, Google Maps is treating Waymo as a new transportation modality. In supported areas, after inputting directions, Maps users will have the option to tap the ridehailing/transit tabs. They’ll see the estimated Waymo fare and time of arrival. Then, users can book a fully autonomous ride through the Waymo One app. 

Where are the supported areas? Geofenced sections of Metro Phoenix—parts of Chandler, Mesa, and Tempe—where Waymo is operating driverless Chrysler Pacificas. 

Who can use it? Green texters for now. One would expect the service to become available on iOS eventually, so Waymo/Google Maps could expand the total addressable market for the feature. On the other hand, exclusive robotaxis on Android is a nice competitive advantage. 

Big picture: We have a long-running theory that Maps could evolve into a mobility and travel super-app. See examples here. —RD

BITS & BYTES

Stat: The revolving door extends to the cloud. Amazon Web Services has hired at least 66 ex-government officials since 2018. 

Quote: “When Amazon One finally arrived at an East Coast Amazon Go store, we knew we needed to try it ourselves...So I (Halie) handed Amazon my biometric data at a Midtown [Manhattan] store last week. For journalism.”—Retail Brew tries out Amazon’s palm-scanning payments system

Read: Our guide to cloud computing. 

Pot talk: With marijuana legalization fever burning through the courts, now’s the time to get into cannabis stocks. Here’s how Barron’s—the folks who know finance as well as anyone—thinks you should play this promising sector.*

WHAT ELSE IS BREWING

• Jeff Bezos and his brother will go to space on Blue Origin’s first human spaceflight. 
• Cruise received a California permit for driverless passenger rides. This is a first for The Golden State.
• 2% of the App Store’s top money makers are scams, according to a WaPo analysis of Appfigures data. Apple pulled two-thirds of said apps from after the publication flagged them.  
• Aurora is reportedly close to SPACing.
• US regulators approved Microsoft’s nearly $20 billion takeover of AI company Nuance Communications. 
• Phillips, a UK auction house, will accept bitcoin and/or ether for a Banksy piece worth millions (in fiat dollars).

THREE THINGS WE'RE WATCHING

Monday: Apple’s WWDC21 developer conference kicks off at 1pm ET and runs through the week. We’ll be listening in for literally any mention of EVs/self-driving (very unlikely) or mixed-reality hardware (very possible). The promo image, revealed back in March, could be interpreted as an AR glasses teaser. But we’re probably just seeing things. 

• Also today: Cloudflare Connect starts. With all the recent ransomware attacks, a slate of security-focused programming seems especially relevant right now. 

Tuesday: Microsoft's Azure + AI Conference starts at Disney World.

Saturday: E3, the world’s biggest gaming expo, begins in an all-virtual format. It can be accessed on E3’s Twitch, YouTube, Twitter, and Facebook accounts. 

FROM THE ARXIVES

Any time Stanford researchers publish new updates on brain-computer interface (BCI) and typing-by-thought, it has our attention. 

The latest from Nature = A 65-year-old man with a spinal cord injury and electrode array implanted in his brain was able to double his typing speed. Researchers instructed the man to imagine using hand movements to write sentences, and used a new BCI system and neural net decoder to parse his thoughts. 

Not only did the individual jump from nine to 18 words per minute, he reached the speed at which people typically write by hand.  

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Federal facial recognition ban will be reintroduced 'soon'
• OpenAI vets start Anthropic 
• Waveguides are key to AR’s future