Binance: Watchdog clamps down on cryptocurrency exchange

Binance, the world’s biggest cryptocurrency exchange, has been issued a warning by the UK’s financial regulator.

The Financial Conduct Authority (FCA) has ruled that the firm cannot conduct any “regulated activity” in the UK.

It also advised people to be wary of adverts promising high returns on cryptoasset investments.

Binance said the FCA notice would have no “direct impact” on the services it provides from its website Binance.com.

Binance’s existing crypto exchange is not UK-based so despite the FCA ruling, there will be no impact on UK residents who use the website to purchase and sell cryptocurrencies.

The FCA does not regulate cryptocurrencies, but requires exchanges to register with them. Binance has not registered with the FCA and therefore is not allowed to operate an exchange in the UK.

The FCA move comes amid pushback from regulators around the world against cryptocurrency platforms.

Binance.com is an online centralised exchange that offers users a range of financial products and services, including purchasing and trading a wide range of digital currencies, as well as digital wallets, futures, securities, savings accounts and even lending.

Binance Group is currently based in the Cayman Islands, while Binance Markets Limited is an affiliate firm based in London. The firm has multiple entities dotted around the world and Binance Group was previously based in Malta.

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The FCA said that Binance Markets Limited (BML), which is owned by Binance Group, is not currently permitted to undertake any regulated activities without the prior written consent of the FCA. It has until Wednesday to comply with the ruling.

The regulator also stressed that no entity in the Binance Group holds any form of authorisation, registration or licence to conduct regulated activity in the UK.

At first sight, the Financial Conduct Authority’s move to bar Binance from operating in the UK will have little impact. After all, it won’t stop the company’s many UK customers from using its exchange based in the Cayman Islands to buy and sell Bitcoin and other cryptocurrencies.

Nevertheless, the FCA is sending a strong signal that it is worried about the dangers of investing in cyptocurrencies in general.

The reason it wants them all to register is because it’s concerned about their potential use as a cover for illicit activity – and it wants consumers to be very careful indeed.

As well as forbidding Binance from setting up an exchange in the UK, the regulator is ordering its UK division to stop any form of advertising here by 30 June. More significantly, it has until the end of this week to show the FCA that it has stored records of all of its UK customers, ready to be handed over if necessary.

And there’s a message to UK consumers to check whether any crypto company is registered with the regulator and, if it isn’t, to consider withdrawing their assets.

The FCA cannot stop people from trading in cryptocurrencies – but it has got out its biggest red flag and is waving it vigorously.

Google tracking cookies ban delayed until 2023

Google has delayed its plan to block third-party cookies from its Chrome internet browser.

Cookies track users’ internet activity and allow digital publishers to target advertising.

They are already blocked by a number of Google’s rivals, including Apple, Microsoft and Mozilla.

But critics say Google’s ban forces ad sellers to go direct to the tech giant for this information instead – giving it an unfair advantage.

This is because it plans to replace the system with another one of Google’s own design, which it claims is better for privacy but still allows marketing. Its proposals are already under investigation by the UK Competition and Markets Authority (CMA).

The ban had been planned for 2022, and has now been put back until 2023.

In a blog, Vinay Goel, privacy engineering director for Google’s Chrome browser said: “It’s become clear that time is needed across the ecosystem” in order to “get this right”.

According to GlobalStats, Chrome has a 65% market share worldwide.

Farhad Divecha, founder of digital marketing agency AccuraCast, said the delay was good news for his industry.

“We welcome this delay and only hope that Google uses this time to consult with the CMA as well as different parties that will be affected by the changes, including advertisers, agencies, publishers, and ad-tech and tracking solutions providers,” he said.

Google’s new privacy proposals are known as the Privacy Sandbox .

One of its ideas is the introduction of something called The Federated Learning of Cohorts, or “Floc”.

The idea is that a browser enabled with Floc would collect information about browsing habits and assign users to a group, or “flock”, with similar browsing histories. Each would share an ID which would indicate their interests to advertisers.

This too has faced a lot of criticism, including from the Electronic Frontiers Foundation (EFF) which described it as “[Internet] users begin[ning] every interaction with a confession: ‘Here’s what I’ve been up to this week, please treat me accordingly’.”

Apple claims ‘sideloading’ apps is ‘serious’ security risk

Apple claims that allowing developers to distribute apps outside its official App Store would “expose users to serious security risks”.

A new report from the company argues strongly against allowing so-called sideloading of apps.

The report suggests a range of hypothetical problems including ransomware and financial scams.

It comes as Apple is under pressure from regulators and some developers over its App Store.

The company is awaiting the outcome of its legal battle with Epic Games over what the games studios says are unfair terms set by Apple.

Epic Games has made no secret of its ambition to create a competing storefront – but Apple does not allow third-party app stores to be downloaded from its own App Store.

Separately, Apple is under investigation in the EU, UK, and US over its App Store policies, as an increasing number of developers have spoken out against the so-called “Apple tax” over the past year.

Similar allegations are lodged against Apple’s main rival in the space, Google, which is also embroiled in a legal battle with Epic Games.

Apple is also concerned that forthcoming EU regulation of digital markets could effectively force Apple to enable sideloading.

The 16-page report from Apple appears to be a compilation of all the tech giant’s arguments against relinquishing exclusive control of app sales on its iPhone and iPad platforms.

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“Some have suggested that we should create ways for developers to distribute their apps outside of the App Store, through websites or third-party app stores,” the report says.

“Allowing sideloading would degrade the security of the iOS platform and expose users to serious security risks.”

It also claimed that allowing sideloading “would expose users to scammers who will exploit apps to mislead users, attack iPhone security features, and violate user privacy”.

Accompanying the claims were a series of theoretical scenarios which Apple said showed “a family’s everyday experience” in “this more uncertain world” – accompanied by illustrations of a thieving cartoon fox, apparently representing unscrupulous developers.

It referenced news reports and blogs it said suggested real-world examples of those kinds of activities on Android systems, where sideloading is permitted.

The report also touted Apple’s app review process – itself controversial among developers – as the primary way to defend users from threats.

Some developers took issue with the report, suggesting it was cherry-picking or misrepresenting examples, while others ridiculed the cartoons suggesting the thief could be seen as Apple siphoning off its large cut of sales.

“Is this fox meant to represent the bad guys or Apple taking 30%?” tweeted developer and blogger Benjamin Mayo.

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Tim Sweeney, the head of Epic Games and a vocal Apple critic, characterised the report as a “a sea of lies”.

Marco Arment, a well-known developer behind popular apps Overcast and Instapaper, has previously said he is against sideloading on iOS.

But reacting to Apple’s paper, he wrote that “the best thing Apple could do to protect the safety and security of iOS touted so heavily in that sideloading PDF [is] lift the most anticompetitive [in-app purchases] rules”.

“Without them, no government would have enough reason to force larger changes like sideloading or alternative app stores.”

Online Safety Bill ‘catastrophic for free speech’

The draft Online Safety Bill harms free speech and hands policing the internet to Silicon Valley, a new campaign claims.

The “Legal to Say. Legal to Type” campaign says if it becomes law, US tech firms would gain too much power.

The draft bill places new duties on social media firms to remove harmful or illegal content.

The government has said firms should have safeguards to ensure freedom of speech.

These would include effective routes for people who have had their content removed to appeal against any decision.

The new campaign includes Ruth Smeeth, of Index on Censorship, Jim Killock of the Open Rights Group, Gavin Millar QC and MP David Davis.

While the group supports the bill’s aim of ensuring online platforms remove images of child sexual abuse, terrorist material and content which incites racial hatred and violence, it fears other provisions will adversely affect free speech.

The new bill could see legal online posts from ordinary people blocked and would turn Ofcom into a free speech “super regulator”, it claims.

Legal harms
Published in May 2021 the Draft Online Safety Bill imposes a “duty of care” on social media companies, and some other platforms that allow users to share and post material, to remove “harmful content”.

This can include content that is legal but still judged to be harmful, such as abuse that doesn’t reach the threshold of criminality, and posts that encourage self-harm and misinformation.

Under the bill, Ofcom will be given the power to block access to sites and fine companies which do not protect users from harmful content up to £18m, or 10% of annual global turnover, whichever is the greater.

Campaigners claim this gives tech firms an incentive to “over-censor”, and “effectively outsources internet policing from the police, courts and Parliament to Silicon Valley”.

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Campaigners are particularly concerned about content that is legal, but deemed to be harmful.

Mr Davis described the bill as a “censor’s charter”. He added: “Lobby groups will be able to push social networks to take down content they view as not politically correct, even though the content is legal.”

The bill includes some protections for political speech and journalism, but in a report published simultaneously with the launch of the new campaign, Index on Censorship argued they did not go far enough.

“For instance, while news published on the Telegraph’s website would be subject to the journalistic exemptions in the bill, the article disseminated on Facebook would be subject to the algorithmic removal of ‘legal but harmful’ content’,” the report said.

Campaigners are also concerned that technology companies may use artificial intelligence to identify harmful content.

That, they say, may introduce racial biases and will wrongly censor language, “especially when it comes to irony-loving Brits”.

The Department for Digital, Culture, Media and Sport has been approached for comment.

Google investigated over ‘dominance’ in ad market

The European Commission has opened an investigation into whether Google is dominating the online-advertising market at the expense of its rivals.

It will examine Google’s role in collecting data, selling advertising space and acting as an online-advertising intermediary.

The commission is concerned the technology giant is making it hard for other online advertisers to compete.

Google has said it will co-operate with the inquiry.

‘Fair competition’
The fact the company is present “at all levels of the supply chain for online display advertising” is concerning, commission executive vice-president Margrethe Vestager said.

“Online-advertising services are at the heart of how Google and publishers monetise their online services,” she said.

“Google collects data to be used for targeted advertising purposes, it sells advertising space and also acts as an online advertising intermediary.

“A level playing field is of the essence for everyone in the supply chain.

“Fair competition is important – both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers.”

The inquiry will look at:

the obligation to use Google’s services and or Google Ads to purchase display ads on YouTube
the obligation to use Google Ad Manager to service online display ads on YouTube
the apparent favouring of Google’s ad exchange, AdX, by its other services
the restrictions placed by Google on the ability of rival advertisers to access data about user identity or behaviour
Google’s plans to prohibit third-party cookies on Chrome
Google’s plans to stop making the advertising identifier available to third parties on Android smart mobile devicesGoogle says its plans will strengthen user control over their own data.

Its Privacy Sandbox alternative to cookies, which track users as they move around the web, on Chrome will provide only anonymised feedback.

But there are concerns it will also favour Google over its rivals.

Increased scrutiny
In the UK, the Competition and Markets Authority (CMA) has won commitments from the search giant any alternatives it develops will avoid this.

Google has also agreed with the CMA to publicly disclose the results of tests of new technologies and limit how it uses and combines individual user’s data for advertising purposes.

Google has been hit with a series of EU fines in the past three years, totalling 8.25bn euros (£7bn).

In March 2019, it was fined £91m for abusing its market dominance by restricting third-party rivals from displaying search ads between 2006 and 2016.

Google and Facebook together account for most of the global internet-ad sales market but the practices of both are now under increased scrutiny from regulators around the world.

German watchdog probes Apple’s market dominance

Apple is under investigation by the German competition watchdog.

The Federal Cartel Office (FCO) said the initial investigation will look at whether the company is of “paramount significance across markets”.

Apple said it looked forward to “having an open dialogue” with the FCO about any of its concerns.

Facebook, Amazon and Google have faced similar probes this year, after a new German competition law enabled early action against large digital firms.

In a statement, Andreas Mundt, President of the FCO, said it would examine whether with iOS Apple had created “a digital ecosystem around its iPhone that extends across several markets”.

He added that a focus of the investigation would be the App Store, “as it enables Apple in many ways to influence the business activities of third parties”.

In June the UK’s Competition and Markets Authority (CMA) confirmed it was investigating Apple and Google over their “effective duopoly” in mobile app stores, operating systems and web browsers.

Further scrutiny
Depending on the outcome of its investigation, the FCO said it would look in more detail at specific practices of Apple, in a possible further proceeding.

The FCO said it had received various complaints alleging anti-competitive practices, which a further probe could consider.

The watchdog noted that App developers had criticised “the mandatory use of Apple’s own in-app purchase system and the 30% commission rate associated with this”.

It had also received a complaint from the advertising and media industry about restrictions on user tracking in iOS 14.5, the watchdog said.

The FCO said it would establish contact, where necessary, with the European Commission, which is currently investigating how App Store policies affect music streaming.

In response to the news, Apple said the “iOS app economy” supported more than 250,000 jobs in Germany.

It added that the App Store had given “German developers of all sizes the same opportunity to share their passion and creativity with users around the world, while creating a secure and trusted place for customers to download the apps they love with the privacy protections they expect.”

Chip shortage addressed by US-EU tech alliance

Manufacturing more computer chips in Europe and the US will be one of the key focuses of a new technology alliance between the two.

The Trade and Technology Council (TTC) was unveiled following talks between European commissioner Margrethe Vestager and US President Joe Biden.

The group will also seek to set common standards for new technologies such as artificial intelligence.

Both sides are concerned by the rise of China as a technology superpower.

Gaming consoles
A statement on the summit, includes a pledge to build “an EU-US partnership on the rebalancing of global supply chains in semiconductors”.

The pandemic has led to global chip shortages and exposed weaknesses in supply chains, causing shortages of consumer electronics, such as gaming consoles, as well as slowing down production of cars.

Last month, IBM president Jim Whitehurst said the shortage could last for another two years.

The EU wants to increase its share of the global chip-manufacturing market from 10% to 20% and has promised $150bn (£100bn) towards the effort.

Meanwhile, the US has allocated $52bn to domestic chip manufacturing.

The TTC will also include working groups on:

AI
the internet of things
climate
green technology
information and communications technology security
As well as looking at cooperation and standards, the groups will also assess the “misuse of technology threatening security and human rights”.

ICO watchdog ‘deeply concerned’ over live facial recognition

The UK Information Commissioner has said she is “deeply concerned” live facial recognition (LFR) may be used “inappropriately, excessively or even recklessly”.

Elizabeth Denham questioned what would happen if it was combined with social media and other big data.

There is a “high bar” for LFR where “we shop, socialise or gather”, she wrote.

New guidance for companies and public organisations using the technology has also been published.

In a blog post Ms Denham addressed the use of live face recognition, saying that facial recognition technology could be useful, allowing us to unlock our mobile phones, or set up a bank account online.

But when people’s faces were scanned and processed by algorithms in real time and in public places, the risks to privacy increased.

“We should be able to take our children to a leisure complex, visit a shopping centre or tour a city to see the sights without having our biometric data collected and analysed with every step we take,” she wrote.

The tech could create instant profiles of people to be used in serving personalised adverts or it could match shoppers’ faces against watch-lists of known shoplifters.

In a separate Commissioner’s Opinion, the ICO revealed it was aware of proposals to use live facial recognition in billboards.

Ads in public spaces might be able tell how engaged a person was, or estimate their age, ethnicity, sex and even clothing styles and brands, in order to serve personalised content.

Billboards might even remember faces allowing companies to track individuals visits across different locations.

Taking steps
Companies also needed to be aware of the dangers of bias in facial recognition systems and the risks of misidentification.

The Commissioner’s Opinion sets standards for the use of the live facial recognition by companies and public bodies; police use was addressed in an earlier document.

The new opinion revealed that out of six ICO investigations into LFR systems, none of the systems that actually went live were fully compliant with data protection law.

All of the organisations chose to stop, or not proceed with the use of the technology.

Chip shortage addressed by US-EU tech alliance

Manufacturing more computer chips in Europe and the US will be one of the key focuses of a new technology alliance between the two.

The Trade and Technology Council (TTC) was unveiled following talks between European commissioner Margrethe Vestager and US President Joe Biden.

The group will also seek to set common standards for new technologies such as artificial intelligence.

Both sides are concerned by the rise of China as a technology superpower.

Gaming consoles
A statement on the summit, includes a pledge to build “an EU-US partnership on the rebalancing of global supply chains in semiconductors”.

The pandemic has led to global chip shortages and exposed weaknesses in supply chains, causing shortages of consumer electronics, such as gaming consoles, as well as slowing down production of cars.

Last month, IBM president Jim Whitehurst said the shortage could last for another two years.

The EU wants to increase its share of the global chip-manufacturing market from 10% to 20% and has promised $150bn (£100bn) towards the effort.

Meanwhile, the US has allocated $52bn to domestic chip manufacturing.

The TTC will also include working groups on:

AI
the internet of things
climate
green technology
information and communications technology security
As well as looking at cooperation and standards, the groups will also assess the “misuse of technology threatening security and human rights”.

Irish police to be given powers over passwords

Irish police will have the power to compel people to provide passwords for electronic devices when carrying out a search warrant under new legislation.

The change is part of the Garda Síochána Bill published by Irish Justice Minister Heather Humphreys on Monday.

Gardaí will also be required to make a written record of a stop and search.

This will enable data to be collected so the effectiveness and use of the powers can be assessed.

Special measures will be introduced for suspects who are children and suspects who may have impaired capacity.

The bill will bring in longer detention periods for the investigation of multiple offences being investigated together, for a maximum of up to 48 hours.

It will also allow for a week’s detention for suspects in human trafficking offences, which are currently subject to a maximum of 24 hours detention.

‘Powers and safeguards’
“The law in this area is currently very complex, spread across the common law, hundreds of pieces of legislation, constitutional and EU law,” the minister said.

“Bringing it together will make the use of police powers by gardaí clear, transparent and accessible.

“The aim is to create a system that is both clear and straightforward for gardaí to use and easy for people to understand what powers gardaí can use and what their rights are in those circumstances.

“At the same time, where we are proposing to extend additional powers to gardaí, we are also strengthening safeguards. The bill will have a strong focus on the fundamental rights and procedural rights of the accused.

“I believe this will maintain the crucial balance which is key to our criminal justice system, while ensuring greater clarity and streamlining of Garda powers.”