Privacy and data protection Archives | Digital Watch Observatory

Central bank in Russia cracks down on crypto-enabled pyramid schemes

Russia’s central bank reports that two-thirds of pyramid scheme operators use crypto, with funds sent to over 4,600 fraudster-controlled wallets in 2025. Authorities identified 7,087 online scams last year, most of which used crypto and money mules to collect illicit funds.

Officials highlighted that these schemes typically operate without physical offices, engaging victims via social media, chat apps, and phone calls. Nearly 1,500 firms offered fake crypto investments, and 84% of scammers used cryptocurrency to raise funds, up from 77% in 2024.

The central bank has blocked 21,500 web pages and social media posts linked to fraudulent operators.

The government is fast-tracking regulations, warning that only licensed firms can offer investments to Russian retail investors. Authorities plan to continue monitoring sophisticated online schemes and enhance public awareness to combat crypto-enabled fraud.

Crypto markets remain active, with Bitcoin trading at $66,566, up 3.8%, and Ethereum at $1,990, up more than 6% in the past 24 hours.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Finance ministry in South Korea pledges reform for public crypto management

South Korea’s finance minister, Koo Yun-cheol, has pledged urgent reforms to how government agencies manage digital assets following high-profile failures in state custody.

Recent incidents revealed that police and tax authorities mishandled seized cryptocurrency, highlighting weaknesses in oversight and security practices. Authorities will review current management methods and implement measures to prevent future losses.

Operational risks around securing crypto in public institutions have become increasingly apparent. A notable case involved Seoul police in Gangnam losing access to 22 BTC, worth around $1.4 million, after failing to retain private keys and allowing a third-party firm to manage the assets.

Prosecutors are now investigating potential bribery linked to the case.

The government says it holds only digital assets acquired through lawful enforcement, such as seizures for unpaid taxes or criminal cases. The reforms aim to strengthen security, improve operational controls, and restore confidence in the public sector’s handling of crypto amid growing scrutiny.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Reddit surges as AI search drives a new era of online discovery

AI-generated search summaries are reshaping online discovery and pushing Reddit to the forefront of global information flows.

The rise of Google’s AI Overview feature places curated AI summaries above traditional search results, encouraging users to rely on machine-generated syntheses instead of browsing lists of websites.

Reddit’s visibility surged after the platform agreed to data access partnerships with Google and OpenAI, enabling large language models to train on its vast archive of human conversations.

The platform’s user-generated discussions are increasingly prioritised because they provide commentary viewed as more neutral and less commercially influenced.

Research from Profound identifies Reddit as the most cited source across major AI platforms. Reddit’s rapid expansion reflects such a shift.

It has overtaken TikTok in the UK, according to Ofcom and now reports 116 million daily active users and more than one billion monthly users.

Communities built around niche interests, combined with voting systems and karma-driven credibility, create a structure that appeals to AI systems searching for grounded, human-authored content.

The platform’s design, centred on subreddits run by volunteer moderators, reinforces trust signals that large models can evaluate when generating AI Overview results.

As AI-powered search becomes the dominant interface for navigating the internet, Reddit’s role as a primary corpus for training and citation continues to expand, reshaping how people discover and verify information.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Singapore and South Korea expand AI partnership

South Korean President Lee Jae Myung used the opening day of his state visit to Singapore to set out plans for deeper cooperation in emerging technologies and renewable energy.

He framed the partnership as a chance to build a future-oriented agenda shaped by a shared reliance on human capital rather than natural resources.

The visit precedes a summit with Lawrence Wong, their second meeting in four months following the upgrade of bilateral ties to a strategic partnership. Both governments want to broaden collaboration across AI, energy, the green transition and defence while maintaining strong trade and investment links.

Lee told Korean residents in Singapore that the strengthened partnership could guide relations for the next fifty years by opening new routes for collaboration across strategic sectors. He added that expanding cooperation would support wider regional stability and long-term technological development.

The programme also includes a meeting with Tharman Shanmugaratnam and attendance at AI Connect. This forum connects business leaders and entrepreneurs from both countries seeking opportunities in AI research and commercial innovation.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

OpenAI and Microsoft strengthen their long-term AI collaboration

Microsoft and OpenAI have reaffirmed their long-standing collaboration after new funding and partnerships raised speculation about their relationship.

Both firms stressed that recent announcements leave their original agreements intact, preserving a framework built on technical integration, trust and shared ambitions for AI development.

Microsoft’s exclusive licence to OpenAI’s intellectual property remains untouched, as does its position as the sole cloud provider for stateless APIs powering OpenAI models.

These APIs can be accessed through either company. Yet all such calls, including those arising from third-party partnerships such as OpenAI’s work with Amazon, continue to run on Azure rather than on alternative clouds. OpenAI’s own products, including Frontier, also stay hosted on Azure.

Revenue-sharing arrangements are unchanged, alongside the contractual definition and evaluation process for artificial general intelligence.

Both companies emphasised that the partnership was designed to allow independent initiatives while preserving deep cooperation across research, engineering and product innovation.

OpenAI retains the freedom to secure additional compute capacity elsewhere, supported by large-scale initiatives such as the Stargate project.

Even with broader collaborations emerging across the industry, both firms present their alliance as central to advancing responsible AI and expanding access to powerful tools worldwide.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Karnataka chief minister says AI should support not replace artists

Speaking at the Bengaluru GAFX Conference, a major event for the Games, Animation, Visual Effects and Extended Reality (AVGC-XR) sector, Karnataka Chief Minister Siddaramaiah positioned AI as a tool to augment artistic work rather than replace human creators.

He highlighted the importance of ethical AI adoption, respect for intellectual property, data privacy, and ensuring fair compensation for artists and creative professionals as the sector grows.

Siddaramaiah underscored that the ‘soul of storytelling’ and human emotion cannot be fully replicated by algorithms, stressing that technology should amplify human potential without erasing it.

He also urged industry leaders to invest in original content, educational institutions to modernise curricula, and global partners to collaborate with Karnataka’s burgeoning creative ecosystem.

The remarks came amid efforts to develop the AVGC-XR sector through policy support, infrastructure, skill development, and the creation of digital creative clusters beyond Bengaluru in cities like Mysuru, Mangaluru and Hubballi-Dharwad.

Siddaramaiah framed this approach as both an economic and cultural opportunity that must be inclusive and ethically grounded.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

FTC signals flexibility on COPPA age checks

The US FTC has issued a policy statement signalling greater flexibility in enforcing parts of the Children’s Online Privacy Protection Act when companies deploy age verification tools. The agency said it will not take enforcement action where personal data is collected solely for age verification purposes.

The FTC framed age assurance as a key safeguard to prevent children from accessing inappropriate content online in the US. Officials said the approach is intended to encourage broader adoption of age verification technologies by online services.

While offering flexibility, the US regulator stressed that organisations must maintain strong safeguards, including data deletion practices and clear notice to parents and children. The FTC also warned that personal data used beyond age verification could still trigger enforcement action under COPPA.

Similar to previous 2023 amendments, legal experts cautioned that companies using age assurance may face additional compliance duties under state youth privacy laws, even as federal requirements evolve.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Topshop unveils AI shoppable catwalk in Manchester

Topshop has staged what it describes as a world-first AI-driven shoppable catwalk in Manchester, as part of its UK brand revival. The Manchester event combined physical runway looks with real-time digital purchasing through a bespoke Front Row AI app.

Guests in Manchester were able to buy outfits instantly as models walked, while also trying on virtual versions after the show. The experience was adjudicated by the World Record Certification Agency and positioned as a new model for immersive retail in the UK.

The Manchester showcase formed part of Topshop’s regional strategy beyond London, highlighting the North West’s role in the UK fashion sector. Students from the University of Salford and Manchester Metropolitan University designed and presented the finale in Manchester.

Topshop’s broader comeback in the UK includes pop ups in John Lewis stores, a standalone website relaunch and a partnership with Liberty in London. Executives said Manchester marked a new phase where AI and commerce converge to reshape retail experiences.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

McKinsey claims agentic AI will reshape global banking

Agentic AI is set to transform banking operations in the US and Asia, according to a McKinsey podcast featuring senior partners from New York, Mumbai and London. The technology goes beyond traditional automation by handling less structured tasks and supporting end to end decision making.

Research cited in the discussion suggests many banks are experimenting with AI, yet few report material financial gains. Leaders in the US and Asia are urged to avoid narrow pilot projects and instead redesign workflows, teams and governance around AI at scale.

McKinsey partners said successful banks in the US and Asia are aligning chief executives, technology leaders and risk officers behind a shared strategy. Operations, risk management and frontline services are seen as areas where AI could deliver significant productivity and quality gains.

Banks in India and other Asian markets are also benefiting from regulatory engagement, including guidance from the Reserve Bank of India. Speakers argued that workforce training, cross functional collaboration and clear accountability will determine whether AI delivers lasting impact in the US.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

AI smart glasses raise new privacy and safeguarding concerns

AI-powered smart glasses are quietly moving from novelty gadget to mainstream consumer device, and the shift is raising uncomfortable questions about privacy, consent and safeguarding. Models such as the Ray-Ban Meta glasses are now widely available in the UK, offering hands-free video capture, livestreaming and AI-driven features such as object recognition and translation. Yet as functionality expands, scrutiny is growing.

Public concern intensified after a BBC report revealed Meta AI glasses had recorded a woman without her consent. The episode reignited debate over whether existing privacy laws are equipped to deal with wearable devices that can identify, track and analyse people in real time. Unlike smartphones, smart glasses operate discreetly, blurring the line between passive wearables and active recording devices.

Manufacturers insist safeguards are being built in. EssilorLuxottica, which partners on the Meta glasses, says design changes have made recording more visible, including enlarging the camera lens and providing user guidance during setup.

The company says it is exploring further design adjustments, including mechanisms that turn off recording when the lens is covered. Compliance with current regulations, it argues, remains a priority.
Critics, however, believe regulation is lagging behind technological capability. Iain Rice, professor of industrial AI at Birmingham City University, warns that UK privacy frameworks were not designed with real-time AI surveillance tools in mind.

He points to risks including facial recognition integration, automated identity matching and the potential for large-scale deepfake generation using live public footage. While cloud processing enables useful features such as navigation and translation, experts argue that stronger safeguards may be needed, including on-device masking of individuals who have not consented to being recorded. The debate suggests that AI glasses may soon test the limits of existing digital rights frameworks.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!