šInsider Trading, Blood Testing, and Censorship.
Hello! It is Friday morning. The air is getting crisp. College football is here. You have one day until the weekend. Things are looking up. Letās get into it!
Open: Sea, Insider: Trading
I swear I will stop talking about NFTs soon. But until then, thereās news coming from the worldās largest NFT marketplace.
This past week OpenSea, an NFT marketplace, admitted one of its employees traded the crypto digital assets using insider information from the platform.
Yesterday, a top executive at OpenSea was accused of āfront-runningā sales on the platform, purchasing pieces from NFT collections before they were featured on the homepage of the platform. According to Twitter users, the startupās Head of Product was using secret crypto wallets to buy drops before they listed on the main page of OpenSea, selling them shortly after they were highlighted publicly by OpenSea, and funneling the profits back to his main account. Users did some of their own investigative journalism and linked suspicious transactions back to the executive on the public blockchain including an NFT drop that was, at the time, actively listed on the front page of the platform.
Rule of thumb if you are going to be doing insider trading: donāt do it on a publicly accessible ledger of transactions that is at any given time being watched by a million teenagers on TikTok. This is the result of both a company and industry that are growing at a crazy pace. Hiccups are bound to happen. In these moments, I am grateful for people who spend 18 hours a day combing through cryptocurrency transactions.
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Watson and Elizabeth Holmes
If you donāt know by now, the Elizabeth Holmes trial is underway and dominating headlines because of the meteoric rise and fall of her startup, Theranos. Here is a refresher:
Holmes started Theranos in 2003, when she was 19. The company was based in Palo Alto and promised to revolutionize health care by detecting diseases using a single drop of blood from a finger prick. At one point, it was valued at $9 billion. But Holmesās empire came tumbling down after a Wall Street Journal investigation in 2015 raised questions about whether Theranosās technology actually worked. (It didnāt.) In 2018, Theranos was dissolved. That same year, Holmes and Theranosās former president, Ramesh Balwani, were indicted on charges of defrauding investors out of millions of dollars as well as deceiving hundreds of patients and doctors.
Holmes has been charged with 12 counts of wire fraud and conspiracy to commit wire fraud. She has been accused of knowing that Theranos blood tests were unreliable, of harming patients who relied on them and of overstating the companyās business deals and performance.
The Holmes trial has cast a long shadow over Silicon Valley, namely for female entrepreneurs, as many have reported being unfairly compared to the Theranos founder. The trial will tip-toe the line of investor due diligence and where founder promises end and the product begins.
Also, since this story is being brought back to the mainstream, that means you will for sure see a few Elizabeth Holmes Halloween costumes this year. Lucky us!
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Donāt Mess With Texas (Online)
In the eternal battle between the government and social media companies, Texas Governor Greg Abbott, signed a bill regulating how the platforms moderate content. The new law is controversial for many reasons but mainly for the way it prohibits banning (or otherwise restricting) content based on āthe viewpoint of the user or another personā.
The law also requires social media platforms to disclose how they promote and moderate content and mandates transparency reports similar to those produced by Facebook and Google. If platforms are notified of illegal content, the law requires them to evaluate it within 48 hours.
Some view this law as a part of the larger Republican anti-censorship effort that aims to scare tech companies away from removing āobjectionable but lawful contentā. A judge blocked a similar social media law in Florida in June, saying it ācompels providers to host speech that violates their standards.ā
The Verge wrote this about the future of Texasā new social media law,
NetChoice, one of the plaintiffs in that Florida lawsuit, released a statement condemning the bill. ā[Abbottās bill] has the same First Amendment flaws as the Florida law that a federal court blocked this summer. The same outcome will almost certainly occur in Texas,ā said NetChoice president Steve DelBianco in a statement.