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US securities regulator sues cryptocurrency platform Coinbase

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US securities regulators sued Coinbase in the latest crackdown by authorities on the cryptocurrency market
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US securities regulators sued Coinbase on Tuesday, alleging that the cryptocurrency platform’s failure to register as a securities exchange venue exposed investors to risk.

The complaint — which sent Coinbase shares sharply lower — comes on the heels of Securities and Exchange Commission (SEC) charges filed Monday against cryptocurrency exchange Binance and founder Changpeng Zhao for numerous securities law violations, including running an unregistered national securities exchange.

“Since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities,” said the SEC in a statement.

The largest crypto assets trading platform in the United States, Coinbase had 110 million users and $80 billion in assets at the end of 2022.

In filing a complaint in federal court, the SEC said Coinbase’s failure to register “has deprived investors of significant protections, including inspection by the SEC, record-keeping requirements, and safeguards against conflicts of interest, among others.”

In the absence of congressional action, the US regulator has stepped up its oversight of cryptocurrency, an approach that Coinbase slammed on Tuesday.

“The SEC’s reliance on an enforcement-only approach in the absence of clear rules for the digital asset industry is hurting America’s economic competitiveness and companies like Coinbase that have a demonstrated commitment to compliance,” said Paul Grewal, general counsel of Coinbase.

“The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation,” Grewal said. “In the meantime, we’ll continue to operate our business as usual.”

Grewal was scheduled to testify before a House of Representatives panel later on Tuesday at a hearing on the “future of digital assets.”

Binance on Monday also blasted the SEC for responding to the industry with “the blunt weapons of enforcement and litigation” rather than a more “nuanced” approach.

The SEC said Coinbase’s “staking-as-a-service” program should have been registered as a securities offering.

Under the program, Coinbase pools customers’ crypto assets, uses those assets to perform blockchain transaction validation services and provides a portion of the rewards back to customers.

“Coinbase was fully aware of the applicability of the federal securities laws to its business activities, but deliberately refused to follow them,” said SEC director of enforcement, Gurbir Grewal.

“While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled,” Grewal added.

Coinbase shares fell 14.7 percent to $50.07 in morning trading.

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AI’s relentless rise gives journalists tough choices

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The arrival of ChatGPT sent shockwaves through the journalism industry
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The rise of artificial intelligence has forced an increasing number of journalists to grapple with the ethical and editorial challenges posed by the rapidly expanding technology.

AI’s role in assisting newsrooms or transforming them completely was among the questions raised at the International Journalism Festival in the Italian city of Perugia that closes on Sunday.

 – What will happen to jobs? –

AI tools imitating human intelligence are widely used in newsrooms around the world to transcribe sound files, summarise texts and translate.

In early 2023, Germany’s Axel Springer group announced it was cutting jobs at the Bild and Die Welt newspapers, saying AI could now “replace” some of its journalists.

Generative AI — capable of producing text and images following a simple request in everyday language — has been opening new frontiers as well as raising concerns for a year and a half.

One issue is that voices and faces can now be cloned to produce a podcast or present news on television. Last year, Filipino website Rappler created a brand aimed at young audiences by converting its long articles into comics, graphics and even videos.

Media professionals agree that their trade must now focus on tasks offering the greatest “added value”.

“You’re the one who is doing the real stuff” and “the tools that we produce will be an assistant to you,” Google News general manager Shailesh Prakash told the festival in Perugia.

– All about the money –

The costs of generative AI have plummeted since ChatGPT burst onto the scene in late 2022, with the tool designed by US start-up OpenAI now accessible to smaller newsrooms.

Colombian investigative outlet Cuestion Publica has harnessed engineers to develop a tool that can delve into its archives and find relevant background information in the event of breaking news.

But many media organisations are not making their own language models, which are at the core of AI interfaces, said University of Amsterdam professor Natali Helberger. They are needed for “safe and trustworthy technology”, he stressed.

– The disinformation threat –

According to one estimate last year by Everypixel Journal, AI has created as many images in one year as photography in 150 years.

That has raised serious questions about how news can be fished out of the tidal wave of content, including deepfakes.

Media and tech organisations are teaming up to tackle the threat, notably through the Coalition for Content Provenance and Authenticity, which seeks to set common standards.

“The core of our job is news gathering, on-the-ground reporting,” said Sophie Huet, recently appointed to become global news director for editorial innovation and artificial intelligence at Agence France-Presse.

“We’ll rely for a while on human reporters,” she added, although that might be with the help of artificial intelligence.

– From Wild West to regulation –

Media rights watchdog Reporters Without Borders, which has expanded its media rights brief to defending trustworthy news, launched the Paris Charter on AI and journalism late last year.

“One of the things I really liked about the Paris Charter was the emphasis on transparency,” said Anya Schiffrin, a lecturer on global media, innovation and human rights at Columbia University in the United States. 

“To what extent will publishers have to disclose when they are using generative IA?” 

Olle Zachrison, head of AI and news strategy at public broadcaster Swedish Radio, said there was “a serious debate going on: should you mark out AI content or should people trust your brand?”

Regulation remains in its infancy in the face of a constantly evolving technology.

In March, the European Parliament adopted a framework law aiming to regulate AI models without holding back innovation, while guidelines and charters are increasingly common in newsrooms.

AI editorial guidelines are updated every three months at India’s Quintillion Media, said its boss Ritu Kapur.

None of the organisation’s articles can be written by AI and the images it generates cannot represent real life.

– Resist or collaborate? –

AI models feed off data, but their thirst for the vital commodity has raised hackles among providers.

In December, the New York Times sued OpenAI and its main investor Microsoft for violation of copyright.

In contrast, other media organisations have struck deals with OpenAI: Axel Springer, US news agency AP, French daily Le Monde and Spanish group Prisa Media whose titles include El Pais and AS newspapers.

With resources tight in the media industry, collaborating with the new technology is tempting, explained Emily Bell, a professor at Columbia University’s journalism school.

She senses a growing external pressure to “Get on board, don’t miss the train”.

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Malaysia to build massive chip design park: PM

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Malaysian Prime Minister Anwar Ibrahim has announced a plan to build a massive chip design park
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Malaysia’s leader on Monday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry.

A prominent player in the semiconductor industry for decades, Malaysia accounts an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch.

Now it wants to go beyond production and emerge as a chip design powerhouse too, Prime Minister Anwar Ibrahim said Monday.

“I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm,” Anwar said in a speech, referring to the British chip design giant.

The park will be located in Selangor state, he said, without offering any details on costs and timelines.

AFP has reached out to Arm for comment.

The project would mark a significant step for Malaysia, which has long been a chip manufacturing hub, with its northern island of Penang home to a number of facilities and is often dubbed the country’s Silicon Valley.

Tensions between Washington and Beijing over advanced tech, especially semiconductors, in recent years have forced many firms to look into relocating their manufacturing from China to other countries including Malaysia, Vietnam and India.

The Malaysian government is actively pursuing investment in its semiconductor industry, and Anwar has said the country should have done better with past opportunities to grow the sector.

“The fact is that we have experienced missed opportunities in technology investments, making it imperative for us to re-strategise,” he said Monday.

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Bill to ban TikTok in US moves ahead in Congress

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TikTok says a ban on the app would violate freedom of expression
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The US House of Representatives approved a bill Saturday that would force the wildly popular social media app TikTok to divest from its Chinese parent company ByteDance or be shut out of the American market.

US and other Western officials have voiced alarm over the popularity of TikTok with young people, alleging that it allows Beijing to spy on users. It has 170 million in the United States alone.

These critics also say TikTok is subservient to Beijing and a conduit to spread propaganda. China and the company deny these claims.

The bill, which could trigger the rare step of barring a company from operating in the US market, now goes to the Senate for a vote next week. It passed the House on Saturday with strong bipartisan support, by a margin of 360 to 58.

President Joe Biden has stated he will sign the legislation. He reiterated his concerns about TikTok in a telephone conversation with Chinese President Xi Jinping early this month.

The ultimatum to the social media app was included in a broader text that provides aid for Ukraine, Israel and Taiwan.

TikTok quickly complained Saturday after the vote, saying in a statement “it is unfortunate that the House of Representatives is using the cover of important foreign and humanitarian assistance to once again jam through a ban bill that would trample the free speech rights of 170 million Americans, devastate 7 million businesses, and shutter a platform that contributes $24 billion to the U.S. economy, annually.”

– Under scrutiny –

Under the bill, ByteDance would have to sell the app within a year or be excluded from Apple and Google’s app stores in the United States.

The House of Representatives last month approved a similar bill cracking down on TikTok, but the measure got held up in the Senate.

Steven Mnuchin, who served as US treasury secretary under former president Donald Trump, has said he is interested in acquiring TikTok and has assembled a group of investors.

TikTok has been in the crosshairs of US authorities for years, with authorities saying the platform allows Beijing to snoop on users in the United States.

But a law banning it could trigger lawsuits. This bill gives the US president the authority to designate other applications as a threat to national security if they are controlled by a country deemed hostile.

Elon Musk, the billionaire owner of X, formerly Twitter, came out Friday against banning TikTok, saying it went against freedom of expression.

“TikTok should not be banned in the USA, even though such a ban may benefit the X platform,” Musk said in a post on the social network he acquired in 2022.

“Doing so would be contrary to freedom of speech and expression,” said Musk.

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