Tech Week: Crypto Regulation Indecision, National Security Threat from Tik Tok & More

No Clear Direction on Crypto Regulation after FTX Crash

The collapse this month of Sam Bankman-Fried’s FTX, the third-largest cryptocurrency exchange by volume, has intensified calls for regulation of the industry. But exactly how to proceed with that task remains unclear.

Some say federal legislation is called for.

“The FTX bankruptcy is both devastating and alarming, but at the same time, not surprising,” said U.S. Sen. Cynthia Lummis (R-WY), who co-authored crypto legislation with U.S. Sen. Kirsten Gillibrand (D-NY) earlier this year. “The bottom line is that we need comprehensive regulation in place to weed out the bad actors and ensure consumers have faith in the institutions they are trusting with their hard-earned money.”

Others say what’s needed is better enforcement of the laws already on the books.

“Financial markets need a cop on the beat, and currently, the crypto market does not have one,” said Stephen Diehl, a prominent crypto industry critic.

Part of the reason for that appears to be that the lack of clarity about whether cryptocurrencies are commodities or securities has prevented either the Commodity Futures Trading Commission or the Securities Exchange Commission from becoming the primary regulator of the industry.

Aaron Klein, a senior economic studies fellow at the Brookings Institution, meanwhile, pointed out that Bernie Madoff operated illegally for an extended period of time without getting caught.

He said: “There’s a natural subcurrent to say, ‘Wow, this is really bad. We should have had more regulation to stop it.’ And you’d probably go, ‘You can’t regulate honesty.’” (VOX, QUARTZ, ASSOCIATED PRESS)

FBI Director Says Tik Tok Potential Threat to National Security

FBI Director Chris Ray told federal lawmakers last week that U.S. operations of the Chinese-owned short-form video hosting service TikTok raised national security concerns. Those risks include “the possibility that the Chinese government could use [TikTok] to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations,” he said. (INSURANCE JOURNAL)

Google Reaches Settlement with 40 States over User Location Tracking

Google has agreed to pay $391.5 million to 40 states to resolve an investigation of the company’s tracking of user location data. The multistate settlement is the largest in U.S history concerning privacy. (ASSOCIATED PRESS)

-- Compiled by KOREY CLARK