Concerns About Crypto Modernization – POLITICO

With the help of Mohar Chatterjee

US regulators could soon gain much more influence over the world’s second-largest blockchain network, a prospect that has become a growing concern of the crypto world in recent days.

Ethereum developers are nearing the tentative date for a long-awaited network update called “Merge,” which will revamp and speed up transaction processing.

While this is happening, there are growing concerns in the industry that the post-merger network will become more susceptible to government scrutiny – particularly Treasury Department sanctions.

Currently, the small number of services that manage Ethereum deposits on behalf of their owners can have a huge role in what new blocks of data will be recognized by the network after the merger. (Think of it roughly as the power delegated to big asset managers like BlackRock to vote on corporate governance on behalf of clients.)

Most of these major services fall under US jurisdiction. Therefore, despite the crypto’s promises of decentralization, they together may have the power to block sanctioned addresses on the Ethereum network.

And the day of reckoning is approaching: the merger is scheduled for September 15.

Many crypto firms have already blacklisted addresses that are under sanctions to access their blockchain-based services, but the industry fears that after the merger, US regulators will go one step further by forcing depository services to block transactions with addresses that are under sanctions. its generally on the Ethereum blockchain.

Such a policy could take several forms, and it’s unclear how most major service providers will respond.

(Last week, Brian Armstrong, CEO of Coinbase, which runs one of the most popular services, said on Twitter (that it would tend to abandon this part of the business entirely rather than block certain transactions from the Ethereum blockchain.)

Several factors add to the uncertainty about how post-merger sanctions might play out. Pro- and anti-compliance factions of network operators may try to unite against the other camp to ensure their preferred approach is preserved, or these camps may diverge, each running their own version of the Ethereum blockchain.

Some researchers say that this uncertainty can make it difficult for regulators to know what action to take, and thus make it more likely that they will do little.

Jeff Dorman, chief investment officer at digital asset manager Arca, argued that the feared sanctions are unlikely to materialize anytime soon, if at all, given the general technology drift among US regulators.

And if U.S. operators are deterred by the demands of sanctions, Dorman predicted, that activity will quickly move overseas.

“Others would step in,” he said, “to fill that void.”

As the federal government works to implement more “trustworthy” artificial intelligence in processing claims, asylum seekers may be embroiled in a debate about what that means.

US Citizenship and Immigration Services disclosed their use of an artificial intelligence tool last week that relies on machine learning and data graphs to identify plagiarism in asylum applications – often a sign of fraud. The Asylum Text Analytics tool scans “digital narrative chapters” in asylum application forms for “common language patterns.” The Department of Homeland Security did not provide further details on the type of language patterns.

I spoke with a linguist researcher Jeremy Rudd UC Davis about the artificial intelligence tool and his concern that it will create additional hurdles for weary asylum seekers.

Rudd called USCIS’s adoption of the text analytics tool “disturbing for several reasons.” The legal standards for what an asylum seeker’s life story should look like are strict and already difficult to meet, especially given language and cultural differences, he explained.

“If we have these incredibly high expectations of how a narrative should read, sound, and perform, but we consider standard language or common language patterns to be fraudulent, that will create impossible standards for credible claims of fear in asylum applications,” Rudd said. .

DHS did not respond to a request for comment. — Mohar Chatterjee

Urban legend of social media politics: While the influence of the social media giants on the country’s politics is just a memory, here’s a digital future-friendly long thread from Wired Backchannel’s Benjamin Wofford about paid TikTok influencers who sell not only products but also political ideologies.

In “Meet the lobbyist next doorWofford details the business model of ad tech startup Urban Legend, which has painstakingly recruited “700 social media influencers who enjoy varying degrees of engagement with audiences that collectively number in the tens of millions.”

Ahead of the midterm elections, Senate candidates like John Fetterman see the value of courting the youth vote on TikTok. And Urban Legend is certainly well positioned to provide sponsored content services to political “power brokers” in Washington who are “quietly moving toward full influencer adoption.” — Mohar Chatterjee

In Albuquerque, New Mexico, a family business is ready to do just that rent autonomous security robots.

… And while we’re on autonomy, a decentralized blockchain company has introduced a new kind smart contract whose legal provisions are activated without human or bot interaction.

Not to be too existential, but what does that mean for a robot know yourself? Researchers at Columbia’s Creative Machines Lab find out.

Meanwhile, Chinese researchers discovered a a new machine learning technique to recover over-compressed social media videos.

And ICYMI: there is 3D printing find a home in the defense industry.

Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); Konstantin Kakaes ([email protected]); and Heidi Vogt ([email protected]). Follow us on Twitter @DigitalFuture.

Ben Schreckinger covers technology, finance and politics for POLITICO; he is a cryptocurrency investor.

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