Avast ordered to pay $16.5 million for illegally selling user browsing data

The US Federal Trade Commission (FTC) has ordered a software company Avast, to pay $16.5 million and cease selling or licensing web browsing data for advertising purposes. The charges against Avast include allegations that the company collected and sold users’ browsing information without their consent, despite promising to protect their privacy.

Czech company based in the UK, collected the US consumers’ browsing information using browser extensions and antivirus software, according to the FTC complaint. The collected data included details about users’ web searches, visited webpages, religious beliefs, health concerns, political leanings, location, financial status, and visits to child-directed content. This information was stored indefinitely and sold to third parties without adequate notice or consent.

The FTC also argues that Avast deceived users by falsely claiming that its software would safeguard their privacy and block third-party tracking. Company failed to sufficiently inform consumers that it would sell their detailed, re-identifiable browsing data. The data was sold to over 100 third parties through Avast’s subsidiary, Jumpshot.

In addition to fine, Avast and its subsidiaries will be prohibited from misrepresenting their data usage practices. Under the proposed order, Avast is required to delete the browsing information transferred to Jumpshot and any products or algorithms derived from that data.

The company must also notify consumers whose browsing information was sold without consent about the FTC’s actions. Furthermore, they will be required to implement a comprehensive privacy program to address the misconduct highlighted by the FTC.

California temporarily suspended Waymo’s robotaxi expansion

Waymo’s application to expand its robotaxi service in Los Angeles and San Mateo counties has been suspended for 120 days by the California Public Utilities Commission’s Consumer Protection and Enforcement Division (CPED). Company can still operate driverless vehicles in San Francisco, but further expansion is on hold until June 2024. According to the CPED, the application has been suspended for additional staff review.

Waymo clarifies that this suspension is a standard procedural step in the CPUC’s thorough review process. However, David J. Canepa, Vice President of the San Mateo County Board of Supervisors, contends that Waymo has failed to engage in meaningful discussions about expanding into Silicon Valley, prompting the CPUC to suspend the application. Canepa sees this as an opportunity to address genuine concerns regarding public safety.

Waymo currently operates a commercial service round-the-clock in San Francisco and is permitted to offer free driverless rides in certain parts of Los Angeles. In January, Waymo submitted a document to the CPUC’s Consumer Protection and Enforcement Division, seeking approval of its updated safety plan and an expansion areas where its robotaxi vehicles can operate.

Various entities, including the city of South San Francisco, the Los Angeles County Department of Transportation, and the San Francisco Taxi Workers Alliance, have expressed opposition to Waymo’s expansion plans.

UK aims to pass laws regulating stablecoins and cryptocurrency staking

During a crypto event in London, the UK’s Economic Secretary to the Treasury Bim Afolami stated that the government is working intensively to ensure the new legislation regulating stablecoins and crypto staking. However, no specific details about the regulations were provided due to the ongoing developments in the field.

In 2022, UK Prime Minister Rishi Sunak pledged to establish the country as a global crypto hub, emphasizing the need for crypto firms to be able to invest, innovate, and scale up within the UK. Progress on implementing clearer regulations has been slow, despite calls from cryptocurrency firms for more concise rules.

The UK Law Commission published recommendations in July 2023 suggesting conducting a common law analysis of crypto assets and establishing an industry-specific panel consisting of technical experts, academics, and legal practitioners to advise courts on crypto-related legal matters.

On October 30, 2023, the UK government announced plans to introduce more crypto-specific regulations in 2024. This includes bringing the regulation of fiat-backed stablecoins under the purview of the Financial Conduct Authority (FCA).

United States financial regulators approved the first spot bitcoin exchange-traded fund

After a lengthy legal procedure that lasted six years, the United States Securities and Exchange Commission (US SEC) has approved the first-ever spot bitcoin exchange-traded fund (ETF). The SEC announced that the approval was granted for 11 ETFs waiting for the decision. The SEC fought several court cases against the companies seeking approval, and the court decisions were not favourable for them. This is a long-anticipated move from the SEC, and the whole finance industry in the US welcomed the decision

In its statement, the SEC stated that the granting of the bitcoin ETF does not mean that the SEC is promoting the cryptocurrency and called for individual investors to be cautious when they invest in digital assets.

What is the exchange-traded fund?

Invented back in the 1990s, exchange-traded funds are baskets of bonds or other assets that are usually managed by the leading financial investment firms. They can be traded on the stock exchanges and, therefore, realise gains and losses from trading. They are invented as a platform for the individual investors to participate. By investing in several assets and diversifying its portfolio, individual investors reduce the chance for significant losses.

Why is the bitcoin exchange-traded fund important for digital assets?

Considering that cryptocurrency use and safe storage still require certain technical knowledge, the ETF offers the opportunity for individual investors to invest directly in the cryptocurrency markets without the risk associated with cybersecurity. The bitcoin exchange-traded fund opens the way to invest in digital assets managed by professionals. From eleven companies that applied for the SEC approval, there are some Wall Street financial giants such as BlackRock or Van Eck but also a new wing of the crypto and innovative tech industry such as Fidelity or Ark Investments. Together, they manage hundreds of billions of dollars that will now be exposed to the cryptocurrency market. The ETF will follow the spot price of the bitcoin cryptocurrency, and may benefit the price stability of bitcoin. It will also serve as a safeguard for individual investors from the industry known for its many blunders

The SEC announcement comes one day after the security incident related to their X account. In the alleged hack, shared content was news that the SEC approved spot bitcoin exchange-traded fund. Was this a message that went public by accident or mistake from the account holders? Or was it a malicious act from the third party to undermine the government agency? Answering this question will be the primary purpose of the FBI investigation announced yesterday by the Securities and Exchange Commission

Australia reiterates its efforts to regulate crypto industry

The Australian Treasury has initiated efforts to further fine tune regulation around cryptocurrency. It has published a consultation paper titled “Regulating digital asset platforms” to outline its approach. Instead of creating new rules specifically for cryptocurrencies, the regulation of crypto exchanges will be carried out under existing financial services laws.

The main focus of this regulatory framework is to oversee and regulate cryptocurrency exchanges and service providers, rather than individual cryptocurrencies or tokens. The Australian Treasury is considering making it mandatory for crypto exchanges to obtain a financial services license from the local financial regulator. These proposed rules will only apply to crypto exchanges holding more than $3.2 million ($5 million AUD) or more than $946 ($1,500 AUD) per individual.

Why does it matter?

With a quarter of Australians owning some sort of cryptocurrency, the treasurer, Jim Chalmers, stated that they are taking swift and systematic action to create a regulatory framework that balances consumer protection with the promotion of innovation in the digital asset industry.

The US regulators filed a suit against the Binance cryptocurrency exchange

In light of the recent legal cases and lawsuits against companies from the cryptocurrency industry, the US Commodity Futures Trading Commission (CFTC) filed a suit against world’s biggest cryptocurrency exchange Binance. The Binance exchange, and the company CEO Changpeng Zhao are accused of trading violation, by not registering with the US regulatory body.

gold round coin on brown and black box

The commission has been investigating the online exchange since 2021 and this is a final step in their investigation. The CFTC claims that Binance also allowed US citizens to buy and trade cryptocurrency on its platform, back in 2017. Currently, the US citizens are not allowed to trade on the exchange which implements Know Your Customer (KYC) procedure. The companies CEO Changpeng Zhao is accused of having numerous accounts on the exchange which he used to trade against their customers.   

The Binance exchange started in Shanghai and it now holds companies in a couple of world jurisdictions, with a yearly revenue of $20 billion. Mr Changpeng Zhao has Canadian and Chinese passports, while living in Dubai.

MasterCard and Visa delay plans for cryptocurrency implementation

According to a report from Reuters, the world’s largest payment processor companies, Visa and Mastercard, are pushing back the launch of products and services related to crypto, until market conditions and the regulatory environment improve. Visa and Mastercard already have a card issued in partnership with the cryptocurrency exchange Binance, and it offers a fiat-to-cryptocurrency gateway for Binance users.

Anyhow, companies shared concerns about the future of cryptocurrency regulation in a midst of the recent collapse of large players in the crypto industry, such as the FTX. A hard year for crypto companies, pushed Visa and MasterCard to delay the proposed partnerships and decide the way forward after a clearer regulation perspective is established.

The IMF is in favor of regulating the cryptoassets but also leaving the mechanism for ban if needed

At the outskirts of the G20 summit in India, the International Monetary Fund Managing Director, Ms Kristalina Georgieva answered the questions from media around the cryptoassets and digital currencies. In her words, the IMF is very much in favor of regulating the world of crypto and digital money. The IMF, alongside the Bank for International Settlements and the G20s Financial Stability Board (FSB) believes this is a top-priority in the forthcoming period.

She pointed out the difference between legal tenders (national currencies) which are backed by countries that issue them, and the ‘publicly issued cryptoassets and stablecoins calling them ‘just a speculative asset’. If such assets start to pose a threat to the consumers and/or financial  stability for countries we should have a mechanism to ban crytpoassets altogether. We have requests from our members not to rule out the mechanism for the total ban. If there are strong consumer protection laws set in place, we will not need a ban. The ban of cryptocurrencies is indeed a tool of last resort, she added in her interview.

The US regulators order the halt of the BUSD stablecoin issuance 

The US cryptocurrency company Paxos was ordered by the New York department of financial services (NYDFS)  to stop the issuance of the BUSD stablecoin 

This action comes after Paxox received a notice from the US Security and Exchange Commission (SEC) that BUSD stablecoin is a financial security and that Paxos needs to register with the Commission. Stablecoins are cryptocurrencies that are pegged to the US dollar or other national currency. The regulatory battle around the stablecoins will continue as Paxos complained to the decision from the SEC. Meanwhile, all deposits of the BUSD will be halted. BUSD is a stablecoin used on a cryptocurrency exchange Binance as a stablecoin pegged to the US dollar. The Binance online exchange is the world’s second largest cryptocurrency exchange based. Binance announced that this will not affect their business.

Stablecoin regulation will be on the agenda of the G20 Finance Ministers meeting on February 24-25 in India. Regulation around this issue might need an overarching regulatory approach.

Australian authorities look into deceptive marketing practices by social media influencers

On 27 January 2023, the Australian Competition and Consumer Commission (ACCC) started a search to identify misleading testimonials and endorsements by social media influencers. The action is in response to ‘community concern about the ever-increasing number of manipulative techniques on social media, designed to exploit or pressure consumers into purchasing goods or services’.

With the overall goal of identifying deceptive marketing practices across the digital economy, the ACCC plans to analyse influencer marketing practices across several social media platforms such as Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch. The authority is also looking at the role that other parties such as advertisers, marketers, brands, and social media platforms may have in facilitating misconduct.