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Feds, tech fall short on watching extremists, Senate says

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The FBI and the Department of Homeland Security are failing to adequately monitor domestic extremists, according to a new Senate report that also faulted social media platforms for encouraging the spread of violent and antigovernment content.

The report, issued Wednesday by the Senate Homeland Security panel, called on federal law enforcement to reassess its overall response to the threat of homegrown terrorism and extremism.

The report recommends creating new definitions for extremism that are shared between agencies, improved reporting on crimes linked to white supremacy and antigovernment groups, and better use of social media in an effort to prevent violence, said Sen. Gary Peters, the Michigan Democrat who chairs the committee.

Growing domestic extremism has been linked to the country’s widening political divide and a rise in distrust of institutions. Critics of social media’s role in radicalizing extremists say that misinformation and hate speech spread online is fueling the problem, and in some cases encouraging acts of real-world violence like the Jan. 6, 2021, attack on the U.S. Capitol.

“Folks who were looking at what was happening on social media should have known that something very bad could potentially go down on Jan. 6 here at the Capitol,” Peters said Wednesday on a conference call with reporters.

The FBI emailed a statement to The Associated Press defending its handling of domestic terrorism in response to the report. The agency has provided comprehensive reports to Congress on the threat of domestic extremism motivated by racism or antigovernment views and tracks it carefully, the agency said.

“They are among the FBI’s top threat priorities,” the agency said.

A DHS spokesperson responded similarly Wednesday, saying the agency uses a “community-based approach to prevent terrorism and targeted violence, and does so in ways that protect privacy, civil rights and civil liberties.”

The leaders of both agencies are scheduled to testify before Peters’ committee on Thursday, part of its annual hearing on domestic threats.

Efforts by federal law enforcement to use social media to track domestic extremism have prompted questions about civil liberties and the targeting of communities of color. Republicans have accused tech platforms, meanwhile, of using content moderation to censor conservative opinions.

Facebook, Twitter, TikTok and YouTube were all singled out in the report for encouraging harmful content by using algorithms designed to increase user engagement. Those algorithms often prioritize clicks over quality, potentially sending users down a rabbit hole of increasingly provocative material.

The report noted that tech companies often use content moderation tools to remove or flag extremist content after it’s already spread. They should change their algorithms and products to ensure they aren’t encouraging the content in the first place, the report recommended.

“The rise in domestic terrorism can be partially attributed to the proliferation of extremist content on social media platforms and the failure of companies to effectively limit it in favor of action that increase engagement on their platforms,” the report concluded.

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Size, scope of FTX failure gets clearer as users fear worst

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NEW YORK (AP) — Just days after cryptocurrency’s third-largest exchange collapsed, the public is starting to get an idea of how messy FTX’s bankruptcy case could be. Other crypto firms are failing as a result of FTX’s unraveling, events reminiscent of the domino-like meltdowns of the 2008 financial crisis.

Users remained frustratingly in the dark Tuesday about when they might get their funds back, if at all, directing much of their anger toward FTX’s founder and CEO, Sam Bankman-Fried.

In a court filing, FTX’s lawyers said there were already more than 100,000 claims against the company and estimated that figure could grow to more than 1 million, most of them customers, once the case is complete. The court ordered FTX to provide at least a list of the company’s 50 biggest creditors by Nov. 18.

The lawyers said the company is in contact with the Department of Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission as well as dozens of other state, federal and international authorities, confirming earlier reports that the U.S. government is probing the possibility that Bankman-Fried and his lieutenants violated U.S. securities law.

FTX filed for bankruptcy protection Friday, sending tsunami-like waves through the cryptocurrency industry, which has seen a fair share of volatility and turmoil this year, including a sharp decline in price for bitcoin and other digital assets. For some, the events are reminiscent of the failures of Wall Street firms during the 2008 financial crisis, particularly now that supposedly healthy firms like FTX are failing.

The Wall Street Journal reported that BlockFi, which had halted withdrawals over the weekend following FTX’s bankruptcy, is now actively considering bankruptcy and plans to lay off its staff. In previous public comments, BlockFi’s management made it clear that FTX’s failure had pushed the company towards being out of business. FTX had provided financial aid to BlockFi this summer, including a $400 million credit facility backed by its own balance sheet.

“We are shocked and dismayed by the news regarding FTX and Alameda,” BlockFi said Saturday, referring to FTX and Bankman-Fried’s hedge fund Alameda Research. “Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual.”

Another crypto firm, crypto lending firm SALT Blockchain, also appeared to be on the verge of failure. The company Bnk to the Future pulled out of its agreement to buy SALT, citing its exposure to FTX. In tweets, SALT’s CEO Shawn Oren said he is “fully committed still to recover from the damages as victims.”

In a sign of how fearful investors are that the cascading effects could do long-term damage, cryptocurrency exchange Binance proposed the creation of a rescue fund that would save otherwise healthy crypto companies from failure. Binance’s founder and CEO Changpeng Zhao effectively laid out the possibility of a crypto-like central bank or deposit-insurance pool to be a lender of last resort to keep healthy firms from failing.

Meanwhile, FTX’s users bemoaned their losses in Telegram chat groups for traders who used the FTX exchange, writing that they’d lost access to amounts ranging from thousands to millions of dollars.

Some pleaded for information. Others speculated on the likelihood of getting back their funds, while others counseled that they should accept that their investments were gone.

Moderators for one group posted intermittently, saying things like, “No death threats please.” They wrote that they had no information about the whereabouts of Bankman-Fried or what would happen to his companies.

“No news,” posted one moderator.

Many of FTX’s users pointed to Bankman-Fried as responsible, making puns on his name like “Sam Bankrun-Fried” and calling for him to be prosecuted.

On Tuesday, a support account for FTX US was responding on Twitter to posts from people asking about their funds and directing them to send messages to the Twitter account to get assistance.

Mohit Sorout, 30, said he has lost access to 95% of the value of his cryptocurrency holdings when FTX halted its services last week, posting on Twitter, “The pain is f(asterisk)(asterisk)(asterisk)ing real.”

An electrical engineer based between New Delhi and Dubai, he started trading in 2017 and quit his job in 2018 to work full time trading cryptocurrencies. Along with a business partner, he built a custom algorithm, and grew an investment of a couple thousand dollars into a sum many times that size, though he didn’t want to disclose the value of his holdings when he lost access to them.

It’s not clear what will happen to the funds of retail investors like Sorout, which are locked within the FTX ecosystem. His requests to withdraw the funds were not honored last week and now he can’t even log onto the exchange, he said on Monday.

Sorout didn’t intend to keep all of his investments on a single platform, he said, but the tools that FTX had built for traders like himself were very effective and his algorithm worked well there. He also trusted Bankman-Fried in part because of his high profile.

“The problem was the founder, who is donating eight figures in presidential campaigns, he’s meeting with the top bureaucrats, he is sponsoring chess tournaments, he’s out there sponsoring stadiums,” Sorout said. “You don’t really expect such a huge business, especially the CEO of that business, to defraud its customers, you know?”

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Amazon begins mass layoffs among its corporate workforce

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NEW YORK (AP) — Amazon has begun mass layoffs in its corporate ranks, becoming the latest tech company to trim its workforce amid rising fears about the wider economic environment.

On Tuesday, the company notified regional authorities in California that it would lay off about 260 workers at various facilities that employ data scientists, software engineers and other corporate workers. Those job cuts would be effective beginning on Jan. 17.

Amazon would not specify how many more layoffs may be in the works beyond the ones confirmed through California’s Worker Adjustment and Retraining Notification Act, also known as WARN, which requires companies to provide 60 days’ notice if they have 75 or more full-time or part-time workers. Amazon employs more than 1.5 million workers globally, primarily made up of hourly workers.

The online retail giant, like other tech and social media giants, saw sizable profits during the COVID-19 pandemic, as homebound shoppers purchased more items online. But revenue growth slowed as the worst of the pandemic eased and consumers relied less on ecommerce.

The Seattle-based company reported two consecutive losses this year, driven mainly by write-downs of the value of its stock investment in electric vehicle start-up Rivian Automotive. The company returned to profitability during the third quarter, but investors were gloomy about its weaker-than-expected revenue and lackluster projections for the current quarter, which is typically good for retailers due to the holiday shopping season.

In an effort to cut back on costs, Amazon has already been axing some of its projects — including subsidiary fabric.com, Amazon Care, and the cooler-size home delivery robot Scout. Its also been scaling back its physical footprint by delaying — or canceling — plans to occupy some new warehouses across the country. And Amazon Chief Financial Officer Brian Olsavsky has said the company was preparing for what could be a slower growth period and would be careful about hiring in the near future.

Mass layoffs are rare at Amazon, but the company has had rounds of job cuts in 2018 and in 2001 during the dot-com crash. On the warehouse side, the ecommerce giant typically trims its workforce through attrition.

Faced with high costs, the company announced earlier this month it would pause hiring among its corporate workforce, adding to the freeze it put a few weeks earlier on its retail division. But the layoffs weren’t far off. Employees who work in different units, including voice assistant Alexa and cloud gaming platform Amazon Luna, said they were let go on Tuesday, according to LinkedIn posts. Some of them were based in Seattle, where the company has its headquarters.

“As part of our annual operating planning review process, we always look at each of our businesses and what we believe we should change,” Amazon spokesperson Kelly Nantel said in a statement. “As we’ve gone through this, given the current macro-economic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means certain roles are no longer necessary.”

In a note to the devices & services team that Amazon shared on its website, the team’s senior vice president David Limp said the company was consolidating some teams and programs. He said those laid off in the process were notified on Tuesday and the company will work with them to “provide support,” including assistance in finding new roles. If an employee cannot find a new role within the company, Limp said Amazon will provide a severance payment, external job placement support and what he called transitional benefits.

The retail behemoth follows other tech giants that have cut jobs in the past few weeks — a reversal from earlier this year, when tech workers were in high demand. Facebook parent Meta said last week it would lay off 11,000 people, about 13% of its workforce. And Elon Musk, the new Twitter CEO, slashed the company’s workforce in half this month.

Going forward, Wedbush Securities analyst Daniel Ives said he believes Amazon will likely sustain its workforce and investments in profitable areas such as the cloud computing unit AWS, while trimming costs in non-strategic areas like Alexa and other moonshot projects.

“The clock has struck midnight in terms of hyper-growth for Big Tech,” Ives said. “These companies hired at such an eye popping rate, it was not sustainable. Now there’s some painful steps ahead.”

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Republican committee sues Google over email spam filters

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SAN FRANCISCO (AP) — The Republican National Committee has filed a lawsuit against tech giant Google, alleging the company has been suppressing its email solicitations ahead of November’s midterm elections — an allegation Google denies.

The lawsuit, filed in the District Court for the Eastern District of California Friday evening, accuses Gmail of “discriminating” against the RNC by unfairly sending the group’s emails to users’ spam folders, impacting both fundraising and get-out-the-vote efforts in pivotal swing states.

“Enough is enough — we are suing Google for their blatant bias against Republicans,” said RNC Chairwoman Ronna McDaniel in a statement to The Associated Press. “For ten months in a row, Google has sent crucial end-of-month Republican GOTV and fundraising emails to spam with zero explanation. We are committed to putting an end to this clear pattern of bias.”

Google, in a statement, denied the charges. “As we have repeatedly said, we simply don’t filter emails based on political affiliation. Gmail’s spam filters reflect users’ actions,” said spokesperson José Castañeda, adding that the company provides training and guidelines to campaigns and works to “maximize email deliverability while minimizing unwanted spam.”

The lawsuit focuses on how Google’s Gmail, the world’s largest email service with about 1.5 billion users, screens solicitations and other material to help prevent users from being inundated by junk mail. To try to filter material that account holders may not want in their inboxes, Google and other major email providers create programs that flag communications likely to be perceived as unwelcome and move them to spam folders that typically are rarely, if ever, perused by recipients.

The suit says Google has “relegated millions of RNC emails en masse to potential donors’ and supporters’ spam folders during pivotal points in election fundraising and community building” — particularly at the end of each month, when political groups tend to send more messages. “It doesn’t matter whether the email is about donating, voting, or community outreach. And it doesn’t matter whether the emails are sent to people who requested them,” it reads.

Google contends its algorithms are designated to be neutral, but a study released in March by North Carolina State University found that Gmail was far more likely to block messages from conservative causes. The study, based on emails sent during the U.S. presidential campaign in 2020, estimated Gmail placed roughly 10% of email from “left-wing” candidates into spam folders, while marking 77% from “right-wing” candidates as spam.

Gmail rivals Yahoo and Microsoft’s Outlook were more likely to favor pitches from conservative causes than Gmail, the study found.

The RNC seized upon that study in April to call upon the Federal Election Commission to investigate Google’s “censorship” of its fundraising efforts, which it alleged amounted to an in-kind contribution to Democratic candidates and served as “a financially devastating example of Silicon Valley tech companies unfairly shaping the political playing field to benefit their preferred far-left candidates.”

Since then, the commission has approved a pilot program that creates a way for political committees to get around spam filters so their fundraising emails find their way into recipients’ primary inboxes. Gmail is participating in the “ Verified Sender Program, ” which allows senders to bypasses traditional spam filters, but also gives users the option of unsubscribing from a sender. If the unsubscribe button is hit, a sender is supposed to remove that Gmail address from their distribution lists.

As of Friday evening, the RNC had not signed up to participate in the pilot program.

Republicans who have tried to cast doubt on the outcome of the 2020 election without parroting the most extreme and baseless claims about corrupted voting machines and stolen votes have often tried to blame big technology companies like Twitter and Facebook that they allege were biased against former President Donald Trump. A long list of state and local election officials, courts and members of Trump’s own administration have said there is no evidence of the mass fraud Trump alleges.

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