Day: September 30, 2022

The Hold on the Trillion-Dollar Crypto Trade Leaves It Vulnerable

Throughout the cascading cryptocurrency collapses and bankruptcies this summer, one name rose to the top: Sam Bankman-Fried, also known as SBF.

The Bahamas-based American billionaire entrepreneur heads FTX, the world’s second-largest cryptocurrency exchange. This year, he’s become a primary protagonist in the folding of crypto platforms and hedge funds like Celsius Network, Voyager and Three Arrows Capital, deploying a proverbial $1 billion parachute to scoop up failing firms, prop up those facing insolvency and flirt with acquisitions worth hundreds of millions.

He’s also become a primary player in American domestic politics, revealing he’s willing to spend up to $1 billionto fund the Democratic Party’s 2024 efforts. That will prove influential if significant cryptocurrency regulation makes its way through Congress, especially in the context of the 2022 “crypto winter.”

In 2022 alone, his companies acquired two crypto platforms, Canada-based Bitvo and the Japanese platform Liquid, bought a 30 percent stake in Anthony Scaramucci’s SkyBridge Capital, 7.6 percent of the trading platform Robinhood, and lent a whopping $400 million to BlockFi with an option to buy it outright by October 2023.

His relationship with Voyager Digital — an exchange that filed for bankruptcy in July — is a complicated one. His private equity fund, Alameda Research, is a creditor, investor and borrower. Bankruptcy documents show Alameda initially owed Voyager $370 million, but the company lent it more than $500 million in crypto in late June to cover client accounts. Later documents show Alameda likely borrowed up to $1.6 billion from Voyager in the end.

In the same period, Alameda Research also lent $12.8 million to Celsius Network, a crypto lending platform that filed for bankruptcy in July.

Celsius’ single-largest creditor, as revealed in bankruptcy filings, was Pharos USD Fund. This Cayman Islands-based investment firm was owed $81.1 million. That fund is managed and owned by Lantern Ventures, whose CEO, Tara Mac Aulay, is a co-founder of Alameda Research and a close associate and former colleague of Bankman-Fried at the Centre for Effective Altruism.

While a complete forensic account would be impossible to tabulate, we are left with a scenario where one individual — thanks to his controlling shares at multiple companies and connections to investors, debtors and creditors — has a major stake in a significant part of the broader cryptocurrency trading industry.

The various loans, swaps and leveraged trading are typical for financial institutions. Still, they represent an entirely new level of risk in the world of digital money based on open blockchains.

Owing to his newfound relationship with lawmakers and political campaigns — especially as President Biden’s biggest donor— he’ll also have significant weight in shaping the future of Democratic Party politics.

There is no doubt that SBF is one of the most successful investors of our time. But does his significant position constitute a risk for a new innovative sector of our economy?

For those of us with a significant interest in Bitcoin and other cryptocurrencies — protocols designed to be decentralized — to see so much capital and control vested in one person is a warning sign.

With so much crypto value tied up on exchanges and lending platforms rather than people’s private wallets, there are hundreds of billions of dollars at risk for consumers. As we saw with the collapse of TerraUSD, an algorithm stablecoin, it only takes one bankruptcy to send shockwaves. Can a trillion-dollar industry continue to rely on a single investor’s altruism and business acumen?

Politicians in Washington will soon set the rules for how the government classifies cryptocurrencies. They will invoke financial risk, uncertain investments and consumer protection. Bankman-Fried will inevitably have an influence on whatever the outcome will be.

It would benefit us all if future rules help bring regulatory clarity, keep shady actors at bay and provide financial transparency. The whims of a single person, however successful they may be, cannot be the guiding light for the future of decentralized digital money.

Originally published here

US Smoking Rates Rise As a Result of Lobbying Against Safer Alternatives

For the first in two decades, US smoking rates have risen amid the persistent lobbying against safer nicotine alternatives such as vaping products.

In a blog post on the Consumer Choice Center’s (CCC) website, the group’s deputy director Yaël Ossowski said he believes the incessant crusade against safer nicotine alternatives is behind the recent rise in smoking rates. “Nothing has been more egregious and harmful in our current age than the public health lobby’s persistent denialism of the harm reduction value of nicotine vaping products and other alternatives to cigarettes.”

The Federal Trade Commission’s 2020 Cigarette Report indicated that cigarette sales in the US are the highest they have ever been in two decades. The total number of cigarettes sold by major manufacturers rose 0.4 percent in 2020 to 203.7 billion units from 2019. “This is the the first increase in cigarette sales reported in the last 20 years. Smoking is up for the first time in a generation. The public health lobby is to blame,” said Ossowski.

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Pentingnya Menjadikan Kekayaan Intelektual untuk Jaminan Kredit

Perlindungan hak kekayaan intelektual merupakan salah satu instrumen yang penting untuk meningkatkan inovasi dan juga industri kreatif. Melalui perlindungan hak kekayaan intelektual yang kuat, maka para inovator dan pelaku industri kreatif memiliki jaminan untuk mendapatkan manfaat ekonomi dari karya dan inovasi yang dibuatnya.

Berinovasi dan membuat karya orisinil yang diminati oleh konsumen dan bisa dijual kepada masyarakat bukanlah sesuatu yang mudah. Untuk itu, adanya insentif bagi para inovator dan pekerja di industri kreatif bahwa mereka akan bisa mendapatkan manfaat ekonomi dari hasil karya yang mereka buat merupakan sesuatu yang penting.

Tanpa adanya insentif bagi para inovator dan pekerja kreatif untuk berinovasi, maka tentunya akan membawa dampak yang negatif terhadap perkembangan inovasi di negara tersebut. Dengan demikian, akan sangat sulit bagi sektor usaha untuk berkembang, dan tentunya lapangan kerja yang dibuka kepada masyarakat juga akan semakin sedikit.

Itulah mengapa, perlindungan hak kekayaan intelektual yang kuat merupakan sesuatu yang sangat penting. Tanpa adanya perlindungan hak kekayaan intelektual yang kuat, maka orang-orang yang tidak bertanggung jawab bisa dengan mudah mencuri ide dan hasil karya orang lain. Dengan demikian, para inovator dan mereka yang membuat karya tersebut tidak bisa mendapatkan manfaat dari karya yang telah dibuatnya.

Aspek penegakan hukum untuk menindak para kriminal yang mencuri hasil karya dan inovasi merupakan hal yang sangat penting untuk dalam rangka kebijakan untuk melindungi hak kekayaan intelektual. Tetapi, penegakan hukum dalam bentuk penindakan tentu bukan sesuatu yang cukup untuk memberi insentif bagi para inovator untuk berkarya dan berinovasi.

Setelah hak kekayaan intelektual yang dimiliki oleh seorang inovator tersebut dilindungi, maka adanya ekosistem yang mendukung pemanfaatan kekayaan intelektual tersebut secara optimal juga harus dihadirkan. Kita harus bisa memastikan, bahwa para inovator dan pekerja kreatif bisa mendapatkan manfaat ekonomi dari karya yang dibuatnya secara optimal, untuk mendorong semakin banyak inovator dan pekerja kreatif untuk berkarya dan berinovasi (wipo.int, Maret 2021).

Salah satu hal yang paling jelas misalnya adalah, para pemilik kekayaan intelektual tarsebut harus bisa untuk menjual karya yang dimilikinya dalam berbagai bentuk barang atau jasa kepada konsumen, sebagai salah satu cara untuk mendapatkan manfaat ekonomi dari karya yang dibuatnya. Kegiatan ekonomi jual dan beli ini juga harus dilakukan di dalam ekosistem yang bebas, seperti kompetisi yang adil dan terbuka, serta lain sebagainya.

Namun, ada cara pemanfataan yang lain lagi, yang juga tidak kalah pentingnya dibandingkan dengan pemanfaatan dalam bentuk jual beli. Salah satunya adalah, menjadikan kekayaan inetelektual yang dimiliki tersebut sebagai jaminan untuk mendapatkan kredit dari lembaga keuangan.

Menjadikan aset sebagai jaminan kredit merupakan skema yang sangat umum yang dilakukan oleh berbagai pemilik usaha, baik untuk membuka usahanya, ataupun untuk memperluas pangsa pasar yang dimiliki. Saat ini, khususnya di Indonesia, aset-aset yang umumnya kerap dijadikan sebagai jaminan antara lain adalah apa yang dikenal dengan tangible asset atau aset nyata, seperti properti misalnya.

Adanya ekosistem yang memungkinkan para pemilik properti untuk menggunakan asetnya sebagai jaminan pinjaman tentu merupakan hal yang sangat bermanfaat bagi para pemilik properti tersebut. Dengan demikian mereka bisa memiliki modal untuk berbagai hal, seperti membuka usaha baru, atau mengembangkan usaha yang sudah dimilikinya.

Hal ini pula yang sangat penting untuk didorong, agar para pemilik hak kekayaan intelektual bsia menggunakan kekayaan intelektual yang dimilikinya sebagai jaminan untuk pengajuan kredit. Bila hal ini bisa dilakukan, maka insentif seseorang untuk berkarya dan berinovasi juga akan semakin besar, karena kesempatan mereka untuk mendapatkan manfaat ekonomi dari karya yang dibuatnya juga semakin luas.

Meskipun demikian, memang harus diakui bahwa, ada beberapa tantangan yang harus diatasi untuk mewujudkan hal tersebut. Otoritas Jasa Keuangan (OJK) misalnya, yang memiliki wewenang selaku lembaga regulator, mengatakan bahwa hak kekayaan intelektual memiliki fluktuasi nilai yang tinggi. Selain itu, industri Usaha Mikro, Kecil, dan Menengah (UMKM) yang berbasis hak kekayaan intelektual juga mengalami persaingan yang sangat kompetitif, sehingga berpotensi dapat mengalami kesulitan memasuki pasar (money.kompas.com, 01/09/2022).

Pemerintah sendiri belum lama ini sudah mengeluarkan aturan yang memperbolehkan lembaga keuangan seperti bank untuk menjadikan hak kekayaan intelektual sebagai jaminan untuk kredit, melalui Peraturan Pemerintah (PP) No. 24 Tahun 2022. Salah satu persyaratan yang dibutuhkan adalah, kekayaan intelektual tersebut sudah didaftarkan, dan pemilik kekayaan intelektual tersebut sudah memiliki sertifikat resmi dari pemerintah (money.kompas.com, 25/7/2022).

Hal ini tentu merupakan sesuatu yang sangat positif. DIharapkan, melalui adanya peraturan pemerintah tersebut, industri kreatif di Indonesia dapat semakin berkembanga, dan para inovator dan pekerja kreatif memiliki insentif yang lebih besar untuk berkarya dan berinovasi, yang nantinya tentunya akan membawa dampak yang positif terhadap perekonomian.

Sebagai penutup, perlindungan kekayaan inetelektual yang kuat merupakan hal yang sangat penting untuk meningkatkan insentif bagi para inovator dan pelaku industri kreatif untuk berkarya dan berinovasi. Namun, pelindungan yang kuat saja tidak cukup. Hal tersebut harus juga dibarengi dengan membangun ekosistem agar para pelaku industri kreatif bisa memanfaatkan kekayaan intelektual yang dimilikinya secara optimal. Dengan demikian, semoga inovasi dan industri kreatif di Indonesia dapat semakin meningkat dari tahun ke tahun di masa yang akan datang.

Originally published here

Amy Klobuchar’s Journalism Bill Wants Bad Media Cartels

People will share this article on social media channels, which will drive traffic to the Newsmax website. More traffic on a website means more users likely to click on and consume content on that same website, driving ad revenue.

In this sense, Facebook or Twitter act as multipliers of exposure to media companies. But that is not how Sen. Amy Klobuchar sees it.

Her Journalism Competition and Preservation Act of 2021 (JCPA) claims to protect local media outlets by allowing broadcasters to band together to negotiate terms on content distribution. In essence, it would allow media firms to fix prices on something they benefit from: social media companies allowing links to be shared.

The bill exempts media companies from antitrust laws for four years, even though social media companies would continue to be affected by those laws. According to Klobuchar, this would divert profits of social media giants to those media companies that have struggled in recent decades — not least because of their inability to adapt to the online model.

Klobuchar’s bill doesn’t go quite as far as some rule-makers in Europe have been willing to go. In 2018, the European Commission (the executive arm of the EU) put forward new copyright legislation that would impose a link tax. This would require social media platforms to either pay the publisher for the use of snippets (thumbnail and short excerpt text) or not allow the link to be posted at all.

This proposal sparked wide-scale protests across Europe, arguing that it would reduce access to information, limit freedom of expression, and boost fake news. In the end, the EU watered down the proposal, and to this date, many EU member countries are dragging their feet on implementing aspects of the copyright reform.

The JCPA is a less refined argument than Europe’s copyright approach. To Amy Klobuchar and her bipartisan co-sponsors, it is simply about redistributing financial means from one economic player to another, not by means of taxation but through the creation of cartels. This would create a myriad of problems.

Exempting one economic sector from antitrust rules creates a precedent that other sectors will lobby to access. After all, if media companies can band together to fight Meta and Twitter, why can’t hotel conglomerates collude to limit the availability of Airbnb?

The government picking winners and losers never has a good ending and exposes lawmakers to undue influence. Ultimately the question may very well be: Doesn’t Amy Klobuchar seek to benefit from positive media coverage through this bill and its effects?

Those concerned about market concentration in the media realm should see this bill very critically. While some may benefit from cartels, citizens and consumers never do.

Klobuchar’s bill would also be unlikely to effectively help struggling media companies. Many platforms generate a majority of their website traffic, and so their revenue through social media clicks — thus, a link tax would need to be prohibitively high to yield results.

This could lead social media companies to simply block the sharing of links to news sites, which happened in Australia when it implemented similar rules. When Spain attempted link taxation, Google News shut down its services in the country (and only recently reopened after the EU watered down the local legislation).

The underlying premises of Klobuchar’s bill are twofold. On the one hand, she assumes the plight of companies is due to social media giants like Meta or Twitter. The fact that Facebook shut down news link sharing in Australia last year proves that the platform does not need news content to survive; media outlets need Facebook far more than Facebook needs them.

The other assumption is that the economy is static. Facebook and Twitter, unless they innovate, are unlikely to remain the most prominent players in the social media realm. They know better than anyone to what extent they can become redundant in the eyes of their users: think MySpace.

While this is something we accept for social media companies, we don’t apply the same thinking to the media space. Why shouldn’t newspapers and broadcasters be expected to adapt to the digital space in a financially sustainable way without intervention from the government?

Originally published here

GEG Will Impact Fundamental Rights of Consumers

The highest law in Malaysia is the Federal Constitution, which recognizes the fundamental rights of all Malaysians. If we do not focus on this matter, the validity of the law will be questioned, says R. Paneir Selvam

The Consumer Choice Center (CCC) recently organized an online webinar titled Ending Generation Endgame, Rules of Law and the Constitution.

The aim of this webinar was to examine and evaluate the Federal Constitution’s rule of law regarding the essence of the generation endgame.

According to the representative of the Malaysian Consumer Choice Center, Tarmizi Anuwar, individual freedom for consumers in the Federal Constitution was not given serious attention in the implementation of this generation endgame.

“Very little was discussed about fundamental rights or individual freedom in this matter. Until recently, Tun Zaki, the former Chief Justice, also touched on the issue of individual freedom in his statement. We can have many laws enacted, but what is more important is whether the law aims to achieve the goal of justice and equality”, he said.

The main panel for this webinar was R. Paneir Selvam, the principal consultant for the think tank Arunachala Research & Consultancy Sdn. Bhd. (ARRESCON).

In the discussion, Paneir said that the validity of the law could be questioned if the drafting of the law does not take into account the basic rights of consumers.

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Generation End Game policy will impact fundamental rights of consumers

THE validity of the law can be questioned if the drafting of the law does not take into account the basic rights of consumers.

A case in point is the Tobacco and Smoking Products Control Bill 2022 which culminated in the Generation End Game (GEG) has somehow curtailed the right of consumers to choose with the state apparently controlled consumer choices and actions.

“(If this happens), it is not impossible that the way we cut our hair and wear it will also be controlled in the future. This is a dangerous precedent and a wrong move by the Government,” opined Arunachala Research & Consultancy Sdn Bhd’s principal consultant R. Paneir Selvam.

“The highest law in Malaysia is the Federal Constitution which recognises the fundamental rights of all Malaysians. If we do not focus on this matter, the validity of the law will be questioned.”

According to the think tank founder who was the main panellist at the online webinar entitled Ending Generation End Game, Rules of Law and the Constitution organised by the Consumer Choice Centre (CCC) Malaysian chapter, the law enacted must uphold the principle of equality and consumer rights must be prioritised.

Read the full text here

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