The Level1 Show April 25 2023 - ICANNot Believe These Changes
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**Article:**
It's the 25th, and it's time for government and security links with friends. You might notice Krista is gone—I didn't until we actually started recording. Oh, harsh well, I didn't mean that in a harsh way; I just meant it because I'm completely spaced out. But anyway, she's glamping—or hiking, I guess. Maybe they're the same thing? She was worried about her calorie intake because she was like, "This is going to be 5,000 calories a day. How am I gonna eat that much?" We'll hear all about it and her menu next week.
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**Government News: FTC Targets AI**
The FTC is trying to be more proactive these days. They see something on the horizon that everyone with three brain cells can see will be disruptive, and they want to get their hands on it. The US FTC leaders will target AI that violates civil rights or is deceptive. So, what are they targeting? Calls to call my mom under "deceptive" wouldn't make sense—it's like saying all AI at the moment is deceptive.
The civil rights angle is another thing you can shape into anything. I'm not saying we don't need these rules, but I don't think that's the thing we should be basing them on. There isn't a scary amount of AI alarmist stuff coming, and it's not just from the oh-my-gosh-it's-going-to-disrupt-everything economically because it'll be able to do a lot of jobs. But people are worried about strange things.
Look at what they did with some of the robot dog: "Oh, the robot dog might be biased—we must stop it." The cops just like, "We removed the bias—it's back. It's a stupid argument because it can't be proven or disproven in any real way. Let's just observe them for what they are, which is terrifying enough but that would be inconvenient for the big donors."
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**SEC Reopening Exchange Definition Proposal**
The SEC is considering reopening the "quote-unquote exchange definition proposal." Decentralized Finance platforms may or may not be able to skirt rules if they can fit themselves outside the definition of exchange. The SEC wants to close that loophole while simultaneously saying, "No, don't be silly—you're an exchange."
We're dealing with the whole registered versus unregistered Securities thing. It seems like the government is already doing what they want. This would give them more control—it almost seems like someone in a closed-door session told the SEC, "You need to go after them. Don't worry about it if it doesn't fit in the law; we'll fix that later."
The crypto space was a lawless horrible wild west of a world, and bad things happened. It always goes that way.
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**State Attorneys General Urge Congress on Right-to-Repair Bill**
Montana or Colorado—let's think about which one had Roger? I think it was Montana last week. But anyway, they did like an actual retro repair that might actually have some teeth that upset the big deer, which is a good sign.
The floodgates broke for Apple. Hopefully, it broke.
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**CFPB Staffer Transferred 256K Consumers' Data**
A CFPB staffer transferred 256,000 consumers' data to a personal email account in a "quote-unquote major incident." The most baffling thing is that the employee hasn't confirmed or even attested that they've deleted the email. They were probably fired when they found out about this, but before being fired, they didn't deal with the emails—so the emails are presumably still out there.
They haven't sent confirmation of deletion. You just test that I have deleted this—which you can't trust. How revealing is it that the attorney generals are used to things like Apple's malicious compliance to such an extent that they're like, "Please just do this at a federal level because it's going to make it impossible for us."
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**China's Transnational Repression Schemes**
40 officers of China's national police were charged with transnational repression schemes targeting US residents. The stuff happening in Canada wasn't weird—it was happening in the US; we just weren't paying attention.
This was all online stuff, but if they have physical presence like in Canada, it can't happen without some kind of approval at the local level. Imagine if you and I started a private security company and started doing stuff like this in this area—what if the CCP doesn't have to have local people? What if they can just pay other people to go rough up people they don't like?
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**Coinbase Regulatory Crackdown**
Coinbase is feeling the crunch of the regulatory crackdown. Are they going to be punished for being an exchange or not an exchange—are there Securities registered or unregistered? They're tired of this fight and are saying, "Maybe we just leave Coinbase could move away from the U.S if no regulatory clarity."
Brian Armstrong said it's really brilliant. Coinbase is laying the groundwork for incredible legal defense if the SEC ever does anything with them because they're out in front saying hey, this is what we do—we're being really transparent; we're trying to dot the eyes and cross the t's.
They're creating a paper trail but by doing these kinds of things and saying, "Hey, we're looking for clarity—what should we be doing here?" They're giving the SEC conflicting information and saying, "Oh, you should do this, and I said, well, we can't do that if we also do this." The SEC seems completely unprepared to deal with that level of insanity.
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**Pentagon Floats Theory for Unexplained UFO Sightings**
The Pentagon released a report with 350 unexplained sightings. Sean Kirkpatrick leads the new Pentagon anomaly resolution office, and Avi Loeb has a history of these kinds of things. It's not about alien civilization but rather something that can be debunked.
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**.NET Domain Seizure Update**
There's an update at the end: the .net TLD (top-level domain). It's already happened with .com—it's true. The language in the article says that if you're in violation of certain things, a government can simply grab your domain name.
This is about the .NET domain, but it already happened with .COM like you said. Some people pointed out to them, "Hey, bro, this already happened with .com," and they were like, "Oh my God, I looked it up—it's true."
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**Seagate Pays $300M Penalty for Shipping Huawei Hard Drives**
Seagate is going to pay 300 million USD as a penalty for shipping Huawei 7 million hard drives. It was apparently 1.1 billion dollars of hard drives—this seems weird.
300 million will almost certainly wipe out their profit margin but probably not eat too much into their costs. It's like, "Oops, didn't get away with it that time. Gosh darn it."
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**Google Wins Appeal Over $20M Patent Verdict**
Google wins appeal of its 20 million dollar U.S patent verdict over Chrome technology. The malware one—anti-malware.
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**EU's Push for Algorithmic Transparency and AI Regulations**
The EU is desperate to change the AI race. They're pushing for an AI research hub to apply accountability rules to Big Tech. Spain-based algorithmic transparency Center to support enforcement of EU's Digital Services Act.
Press releases talk about opening up the algorithm, but in reality, with modern AI, you can't necessarily do that because it's too large and complex—it doesn't work like that.
The whole point of the large language models is that you really can't explain why they get from A to B. You could follow it from A to B—you could give them new training data and say, "No, don't do that," or "Yes, do more of this." But in terms of showing variable a and variable b and how that leads to variable c—it doesn't work like that.
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**EU's Chip Subsidy Plan**
The EU takes on the US and Asia with a chip subsidy plan. They set aside about 50 billion Euros—doesn't go very far these days, and less in the future probably.
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**Stable Coins vs Central Bank Digital Currencies**
Stable coins are a direct threat to central bank digital currencies because they serve the same purpose—they don't appreciate or depreciate (at least in perfect conditions) and facilitate trade. The Bank of England considers limits on stable coin payments as Parliament debates new crypto rules.
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**UK Police Illegally Recorded Calls via App**
Surrey and Sussex police unlawfully recorded phone calls via app Watchdog finds so. This was an app if you installed it on your phone, it would just record everything—even if you were talking to a confidential informant or whatever—it would record everything. They weren't supposed to use it on every phone, but someone didn't read the full documentation and said, "Everybody install this," and most of the cops did.
They proceeded to record every interaction they had with the public, which wasn't supposed to be done. When they wanted to go through those recordings to see if anything egregious happened—they were like, "Oh sorry, it's all gone. Can't let you do that." There were so many egregious things—so many most of the cops didn't know it was actually doing that.
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**Canada Court Dismisses Appeal Against Proctorio**
The BC court of appeals dismisses a former UBC staff member's appeal at an ongoing battle against proctorio. This is the link-letter case we covered a year or two ago. He lost his case, which seemed weird because it was obviously a slap-type situation—something that would crush an individual.
Proctorio is the software that monitors your e-learning stuff and it's terrible—it monitors everything you do but doesn't really tell people using it that well. They pointed out in their case that in the YouTube terms of service, it said treat an unlisted video as public. So they sued him, which seems like a lawsuit meant to silence.
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**UN Predicts India Will Surpass China as Most Populous Country**
The UN says we're getting ready mid-year for a huge Changing of the Guard—India will surpass China as the world's most populous country by mid-year. Canada has moved way down on the list of freest places.
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**Asia: Forced Sterilization and NSO Spyware in Mexico**
In Mexico, the government doesn't like people investigating mass graves or drug cartels. They use NSO group's Pegasus spyware to hack journalist phones. Three more instances of NSO spyware variations zero-click were found under the radar.
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**Apple Targets Ransomware and Tax Time Warnings**
The headline ransomware isn't usually a thing, but that's gonna be changing because Apple security isn't that great. The lock bit group from Russia is spreading malware via fake Chrome updates.
Tax time is over, but if you used online prep software or purchased some software—you might have noticed a sneaky little checkbox. This gives them permission to do things like ads tailored on all the stuff they know about you from your taxes.
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**Valve Bans Steam Reviews for Controversial DRM**
Valve banned 2500 Steam accounts for liking a review about a game called "Warlander." Valve later admitted that the bans were a mistake. The Sentry anti-cheat stays on your machine after you uninstall it—that's just cool, it's disgusting.
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**Japan's Cybersecurity Nightmare and Southwest Airlines Glitch**
Japan is starting to experience a horrible wave of ransomware—a cyber security nightmare affecting everyone else's problem too. Japanese companies won't pay the ransom but will go back to doing things without computers until they can restore them.
Southwest delayed hundreds of departures Tuesday due to a networking glitch caused by a third-party firewall that failed. At least it stopped all traffic when it failed instead of being a fail-open firewall.
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**Conclusion**
For tomorrow, we've got lots of fun business news that's going to be exciting because the collapse continues. We'll see you then.
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