Yearly Archives: 2019

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Third Party Consultants and Watchdogs: The Highs and the Lows


Companies, especially social media companies which navigate heretofore uncharted waters relating to politics, racial tension, and free speech, often benefit from association with independent, third-party organizations that can help keep their policies ethical and steer them in the direction of responsible stewardship.

Twitter was already facing censure and backlash from the government as well as from users when it announced the formation of the Trust and Safety Council in 2016. The Trust and Safety Council was an independent, external group with more than 40 outside experts and groups whose main task was to help “ensure that people feel safe expressing themselves on Twitter.”

Recently, however, some of the safety consultants revealed that Twitter has not been consulting them.

Twitter Trust and Safety Council wants more communication with company executives

Reportedly, the Twitter Trust and Safety Council had a good relationship with the company’s executives during the first two years of its formation, but subsequently, communication between them decreased. They did not have regular calls, or meetings with CEO Jack Dorsey to discuss new policies at the company annual summit.

Some members of the Trust and Safety Council sent a letter sent to Twitter’s leadership, highlighting that they have gone months without any updates from the company.  They wrote that the council had received no warnings about any changes in policy or about product changes, and concluded with a request to discuss the future of the council with the company’s CEO.

Twitter responds to the letter

Twitter responded to the letter stating that its leadership had been discussing ways to improve how the company works with advocates, partners, and experts, and arguing that one small group is not reflective of Twitter’s role worldwide, which is why the company was working to hear from a more diverse range of voices.


When companies like Twitter engage with external groups like the Trust and Safety Council, they get two major benefits:  independent counsel that can steer them away from abusive or damaging policies or practices, thus protecting the public as well as the company; and the public relations benefit of being able to tout these relationships as evidence of the company’s openness and dedication to social responsibility.

Of course, the voluntary nature of the relationship means that the degree of influence that the third parties have can vary greatly.


The Massive Scope of Cryptocurrency Fraud and Scams

Cryptocurrency fraud and scams may hit $4.3 billion in 2019


A blockchain security company, CipherTrace, reported on the large scale of cryptocurrency scams and hacks in the past several years.   These included over $125 million in stolen cryptocurrencies in the 2nd quarter of 2019, and $227 million lost to hacking in the first half of 2019.  It also included other scams, thefts and misappropriations totaling as much as $3.1 billion dollars.

On the heels of this comes a theft of $2.9 billion in deposits in an alleged scam involving a cryptocurrency exchange and wallet provider called PlusToken.   While six suspects allegedly affiliated with the scam have been arrested by Chinese police, the main operators of the scam are still out and running.  A loss of $2.9 billion would constitute the largest cryptocurrency exit scam to date.

CipherTrace estimated that cryptocurrency fraud and scams may reach $4.3 billion this year.


The Conditions for Fraud and Scams

As in all areas, criminals are attracted to opportunity and are deterred by risk.  The world of cryptocurrency is new, exciting and largely unregulated.  Investors don’t fully understand the product, and legal and technological protections are few.  This provides opportunity.

Similarly, the lack of strong regulatory schema worldwide, the proliferation of cryptocurrencies, ICOs, and exchanges, and the still not-fully-developed ability of law enforcement to catch the perpetrators, combine to minimize the risks to those who want to perpetrate cryptocurrency-related scams and crimes.

These factors make the circumstances ripe for cryptocurrency-related crime.





The Trend towards Transparency and Control

Control of Personal Data

New fields often develop in stages.   A few years ago, cryptocurrency made its grand entrance, tokens proliferated, and speculation ran high in an unregulated wild-west.  As the industry continues in its growth, regulators are beginning to step in and many see the need for order.

A similar phenomenon happened in social media.  For years, users shared data with social media companies without a real awareness of what those companies were doing with their data.  Much ink has been spilled about how the price we pay for the convenience of social media is our very privacy.

As data has grown to be one of the most valuable commodities of our era, its unbridled collection and use by social media companies has begun to attract public scrutiny.  We are just beginning to understand the importance of giving people control of their own data.

The growing awareness of the importance of control of personal data has reached the point that even big social media companies are beginning to respond.

Example: Control Over Personal Data on Facebook

For example, Facebook is tentatively rolling out an “Off-Facebook Activity” feature, which it claims will give users better control over some of their data which Facebook controls.  In particular, the feature refers to data shared with Facebook by other companies which Facebook can use to identify its own users.

To illustrate, imagine a shoe company sends Facebook information that someone browsed its website from a particular device.  Facebook then scans its databases and identifies that the individual attached to that device is one of its users.  It can then send more shoe-related ads to that user.

The “Off-Facebook Activity” feature is supposed to allow users to see which companies have sent identifying data about them to Facebook which Facebook has subsequently linked to their account.  It further enables users to disconnect the data from their personal account.

As a result, Facebook will no longer use the “shoe-store—user” connection to tailor ads towards the user, but will rely on more generic ads.

Regardless of how meaningful a nod it is to consumer privacy and control of data, Facebook’s new product certainly reflects the zeitgeist of the times:  Users’ control of their own personal data is important.


The Need for Cyber-Security Professionals

The Importance of Cyber-Security

It is no longer possible to ignore cyber-security.  The risk of cyber attacks is very real and affects millions of businesses. There is not a day that goes by without a hack. In many cases, victimized companies do not have the important security tools necessary to prevent it or reduce its impact.

Cyber-attacks can lead to both financial and reputational losses, even to the point of shutting a company down. The public healthcare IT systems of Singapore, for example, suffered a cyber-attack in 2018 which compromised the sensitive and personal data of over 160,000 patients. There is not a single developing or developed country that has not been affected by a cyber-attack. Cyber security is not a luxury, it is a necessity.

In Light of the Need for Cyber-Security Professionals, Who Will Work in Cyber-Security?

One cyber-security expert, Dr. Magda Chelly, explained the across-the-board need for cyber-security professionals.  Until recently, the demand for cyber security services was not as great as it is now. Companies were more interested in IT, CRMs and digitalization.  As a result, new graduates went to pursue careers in other cyber fields, which is why there has been a shortage of cyber-security professionals. As a result, the shortage of cyber-security professionals will likely continue until 2028.

Chelly explained that until a few years ago, cyber-security required primarily technical skills, but now companies look for skills like incident and crisis management, security management, and threat and vulnerability assessment. Furthermore, while industry-recognized certifications like CSSP or CISSP certifications are important, real-life hacking experience can be invaluable.




Identity Theft Targeting Kids Becoming More Common

The first time many of us heard of identify theft was through TV shows (e.g. such as “Friends”, where the identity of a central character, Monica, is stolen) but now it is in the headlines practically every day. Previously, identity thieves stole identity cards, credit cards or other information to steal the identity of a person, but now there is an abundance of other information that can be targeted. Email addresses, names, phone numbers and passwords, for example, can be used to hack into your account to steal more information and your identity.

Identity theft targeting kids

Even worse, children have become a favored target for identity theft schemes.  According to a report,  identity thieves hacked the identities of more than 1 million American children in 2017. They did so to steal over $2.6 billion, which left the victim’s families with over $540 million in out-of-pocket costs.

Another report, citing a 2018 online survey by The Harris Poll, noted that over 60 million Americans were affected by identity theft and around 15 million consumers faced identity theft in 2017. Further, the Identity Theft Resource Center recorded over 1,579 data breaches in 2017, in which more than 178 million records were exposed. The details stolen included birth dates, address, social security numbers, driver’s license numbers, and the like.

Forms of identity theft

The Federal Trade Commission notes that there are six main categories of identity theft: tax-related fraud, phone fraud, credit card fraud, bank fraud, government documents fraud,and loan fraud.

As an example, in tax-related fraud, an offender steals the personal information of a person to file a false income tax return or to gain employment. In the case of the children, offenders steal social security numbers of children to gain extra refunds on their taxes, obtain a credit card, or get a loan.


Government Concerns about Libra

U.S. President Donald Trump launched several attacks on Facebook’s new Libra cryptocurrency. He started by censuring cryptocurrencies in general, saying he is not a fan of Bitcoin and other cryptocurrencies that aren’t money and whose value is volatile. Later, however, he followed those tweets with his concerns about Libra in particular.

Claim of little dependability

According to Trump, Libra will have little standing. Trump added that unregulated crypto assets can facilitate illegal behavior like the drug trade and other unlawful activity. The President suggested that if Facebook and other companies want to become banks, then like other banks, they must get a new banking charter and work according to banking regulations.

He did not stop there, and said that the country has only one real currency, which is both reliable and dependable – the U.S. Dollar.

France is also opposed to Facebook’s Libra plans. An official at the French finance ministry said recently that the country would not let any private company start a virtual currency equivalent to a national currency.

According to French officials, a cryptocurrency issued by a company like Facebook, which has a user base of hundreds of millions of people, would come with unacceptable systemic risks. The French statement comes just before the G7 meeting that will probably discuss important agenda items like cyber security and cryptocurrencies.

Facebook insists that Libra will stay legal

A Facebook spokesperson responded that the Libra association would not operate as a bank or interact with consumers, and that the cryptocurrency is only meant to complement the present financial system. Facebook and Libra Association executives added that they expect Libra to be subject to sales tax as well as capital gains taxes.

Further, they revealed that Facebook is talking with money exchanges and local convenience stores to make sure that anti-laundering checks are applied when people cash-in or cash-out the cryptocurrency for traditional currency.