In a statement, France's Cour de Cassation said: "The driver does not provide services as a self-employed person, but as an employee."
The decision came as part of a driver's request to reclassify his contract.
Bulletins
Shakeel Hashim
Shakeel Hashim ( @shakeelhashim) is a former growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
Latest Bulletins
Crypto broker Voyager Digital has filed for bankruptcy protection, days after suspending all trading and withdrawals on its service.
Voyager announced late Tuesday that it had filed for Chapter 11 bankruptcy in New York federal court. The company said prolonged volatility in the crypto markets and the default by Three Arrows Capital on a $666 million loan from Voyager required decisive action.
"This comprehensive reorganization is the best way to protect assets on the platform and maximize value for all stakeholders, including customers," Voyager CEO Stephen Ehrlich said in a statement.
Three Arrows, a crypto hedge fund also known as 3AC, has itself filed for bankruptcy after being ordered to liquidate by a court in the British Virgin Islands. Three Arrows had bet big on the Terra crypto ecosystem that collapsed in value in May when its stablecoin, UST, lost its peg to the dollar.
The bankruptcy for Voyager comes despite Alameda Research, a crypto company run by Sam Bankman-Fried, extending two credit lines to the crypto broker: one for about $200 million and the other for about 15,000 bitcoin.
Voyager has between $1 billion and $10 billion in both assets and liabilities and more than 100,000 creditors, it said in the bankruptcy filing.
In a Twitter thread explaining the company's restructuring plan, Ehrlich said customers with crypto in their Voyager accounts "will receive in exchange a combination of the crypto in their account(s), proceeds from the 3AC recovery, common shares in the newly reorganized company, and Voyager tokens."
Customers with U.S. dollars in their account "will receive access to those funds after a reconciliation and fraud prevention process is completed with Metropolitan Commercial Bank," an institution holding some customer funds for Voyager.
The plan is pending court approval, Ehrlich added.
"During the reorganization, we'll maintain operations," Ehrlich said. "We intend to certain customer programs without disruption. Trading, deposits, withdrawals and loyalty rewards on the Voyager platform remain temporarily suspended."
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In order to hobble China’s ability to produce computer chips, U.S. officials are in talks with their counterparts in Holland to block a semiconductor manufacturing tool maker based there from exporting its machines to China, Bloomberg News reported on Tuesday.
The Dutch ASML makes lithography machines that perform one of the critical steps in modern chip production. Several years ago the U.S. successfully lobbied the Dutch government to block the sale of extreme ultraviolet lithography, or EUV, tools needed to print the world’s most advanced chips. But now officials are going a step further: They're attempting to block the export of the prior generation of tools — deep ultraviolet lithography, or DUV, machines — Bloomberg reported.
The older generation of DUV machines are widely used in global chip production and are used to make many of the chips in phones, PCs and autos. ASML controls most of the market for DUV tools.
An ASML spokesperson said that discussions in Washington about blocking DUV exports to China aren’t new, and that no decision has been made. U.S. Deputy Secretary of Commerce Don Graves recently visited Holland and met with ASML’s CEO, Peter Wennink.
Choking off the China market for DUV tools would damage ASML’s business, which sold €2.7 billion ($2.8 billion) worth of products and services in 2021 to companies either based in China or with operations there, according to its most recent annual report. Other tool makers such as Applied Materials and Lam Research are already banned from selling some of their machines to China’s SMIC, but would likely be hurt by an expanded tool ban, too.
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Stock and crypto trading service eToro has called off a SPAC merger and will stay private, the company said Tuesday. The company is also laying off about 6% of its staff.
The Betsy Cohen-led FinTech Acquisition Corp. and eToro said in a joint statement Tuesday that the companies had not met agreed-upon closing conditions for the blank-check merger ahead of a June 30 deadline. The deal valued eToro at about $10 billion when it was reached in March 2021.
The two sides did not clarify which conditions were not met ahead of the deadline. Cohen said in a statement that the "transaction has been rendered impracticable due to circumstances outside of either party’s control."
The split comes as rocky economic conditions have brought public debuts for companies to a near standstill and sunk the market values of previously high-flying tech firms. There were 70 SPAC debuts in the first half of 2022, according to SPAC Track, compared to 614 for all of 2021.
Robinhood, an eToro competitor, has lost nearly 80% of its market value since it went public in August 2021.
Earlier this year, eToro joined FTX, Coinbase and Crypto.com in a Super Bowl ad-buying bonanza. But crypto values have continued to fall since then.
In a blog post on Tuesday headlined "Staying private (for now!)," eToro CEO Yoni Assia wrote that last year "was an ideal operating environment for our business, with strong bull markets in both stocks and crypto, and we have seen (two) years of 100% growth in revenues and 1,000% growth in customer assets. So far, 2022 has started with a thud with the S&P 500 off to its worst start in more than 50 years and most crypto assets down 50% or more pushing us into a bear market for both stocks and crypto."
Along with calling off the deal, the company confirmed it is laying off about 6% of its staff, citing market conditions. It joins a list of crypto trading firms to cut jobs that includes Coinbase, Gemini and Robinhood.
"After a period of hyper growth, it is now necessary to take a more balanced approach between growth and profitability," said Elad Lavi, vice president of Strategy at eToro in an emailed statement. "Over the past 15 years eToro has weathered many market cycles, emerging stronger from the experience. Despite the current headwinds, our underlying business remains healthy, our balance sheet is strong and we are confident in our long term growth strategy.”
Calcalist first reported the layoffs, noting about half of the 100 jobs cuts would come in Israel, where eToro is headquartered.
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Crypto lender Nexo announced Tuesday that it has signed a term sheet to acquire fellow lender Vauld for an undisclosed sum. While Nexo currently manages assets for about four million users, Vauld manages assets for about 100,000 people, according to the company’s estimates last year.
Vauld halted withdrawals Monday after customers pulled out about $197.7 million, according to the lender. Nexo said in an announcement that it is purchasing the lender in order to help it restructure and stabilize the industry overall, and will ease withdrawal limitations as soon as possible. It has 60 days to perform due diligence before completing the sale.
“The current market conditions are to a large degree reminiscent of the Bank Panic of 1907, characterized by excessive leverage in the system, an overabundance of companies in trouble, and no lender of last resort,” Nexo’s statement said. “Today, it is again in the hands of a few capable and well-capitalized entities to come up with systemic solutions and aid the sector.”
Vauld is one of many crypto lenders to halt withdrawals as tanking token prices and defaults have created a liquidity crisis in recent weeks. The near-collapse of several entities affected, like major crypto lender Celsius and hedge fund Three Arrows Capital, have made it clear how interconnected the DeFi world is. Both were heavily dependent on the UST stablecoin, which continues to create knock-on effects after its collapse in May.
Nexo is positioning itself as an industry knight in shining armor, devoting capital to acquiring a struggling lender that, if it collapsed, could spread the crypto sector's contagion. Nexo said last month that it was also interested in purchasing assets from Celsius, though Celsius informally rejected the offer and hasn’t publicly replied to a formal offer.
FTX’s Sam Bankman-Fried is mounting a rescue operation on a grander scale. The billionaire solidified an acquisition of BlockFi and an investment in Voyager last month.
Depending on who you talk to, these types of acquisitions are either a charitable endeavor to save the industry or opportunistic “vulture capital.” But either way, they mark an inherently centralizing period of consolidation for so-called decentralized finance.
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Twitter on Tuesday filed a suit against the Indian government in an attempt to limit government oversight over politically charged content moderation decisions. The lawsuit, filed in the Karnataka High Court, also alleges abuse of power by elected officials in India.
India revamped its social media laws such that companies are required to comply with government takedown requests before proceeding with any legal challenges. In Twitter's most recent transparency report, India’s government accounted for 11% of global legal requests, behind only Japan, Russia and Turkey. India previously accounted for as much as 18% of Twitter's global takedown requests.
Twitter has taken issue with the flood of content moderation requests issued under Prime Minister Narendra Modi and his Bharatiya Janata Party. The government previously told Twitter to remove content expressing support for the farmers’ protests and Sikh independence.
Last year, the Indian government threatened to jail India-based Twitter executives for up to seven years. That threat came after Twitter restored more than 250 accounts the government had requested be removed. Many of those accounts were critical of the BJP. The government alleged some of those accounts were spreading misinformation and inciting violence.
Twitter said India’s government “arbitrarily and disproportionately” went after content and users on its platform. In February 2021, Twitter suggested it wouldn’t comply with government requests to remove accounts for media outlets, journalists, politicians and activists. In a statement released at the time, the company said it hadn’t removed such accounts and believed doing so would “violate their fundamental right to free expression under Indian law.” Eventually, though, Twitter complied with many of those requests.
Meta-owned WhatsApp filed a similar lawsuit in the Delhi High Court last year, requesting a legal review of the government mandate to make messages traceable. That case is ongoing.
India has a history of removing popular social media platforms when political circumstances intervene. In the summer of 2020, after a violent border skirmish with China left roughly 20 Indian soldiers dead, India banned TikTok from the country. TikTok had around 167 million users in India prior to the ban, making it one of the biggest markets for the China-based ByteDance.
Based on past experience in other nations such as Nigeria, Twitter will likely exercise caution in escalating tensions with the Indian government. The Nigerian government blocked Twitter from operating in the country for a seven-month period that ended in January 2022. Nigeria’s government took issue with Twitter’s decision to delete a tweet from President Muhammadu Buhari that many interpreted as a call for violence against the Igbo ethnic group. As part of the reinstatement deal, Twitter agreed to appoint a representative who would interface directly with Nigeria’s regulatory agency overseeing technology.
Elon Musk could also throw a wrench in things should his acquisition attempt go through. In an April Ted Talk, Musk said Twitter should abide by the laws of the countries in which it operates.
For now, Twitter isn’t rocking the boat all that much in India. Even as it signaled its opposition to the government requests, Twitter has still complied with many of them. The lawsuit takes the company’s grievance through the appropriate channels, and allows Twitter to formally express its dissent without unilaterally making content decisions that would rile up the BJP.
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Tesla has lost its spot as the world's largest electric vehicle maker to BYD, the Chinese automaker backed by Warren Buffett's Berkshire Hathaway.
Over the first six months of this year, Tesla sold 564,000 vehicles compared to BYD's 641,000 EVs. Tesla's fall from the top spot is tightly related to pandemic lockdowns in Shanghai, where enforcement of China's "zero COVID" policy led to the city completely shutting down for two months earlier this year. Tesla vehicle deliveries dropped 18% from the first quarter of the year because of production issues in China, marking the company's first quarterly decrease since the beginning of 2020. BYD's facilities, on the other hand, haven't been affected as badly by COVID-related lockdowns.
Tesla suggested its sales could bounce back in the latter half of 2022, although it's unclear if the EV maker could catch up with BYD. The company said June was the highest EV production month in Tesla's history.
But even though Tesla is producing more vehicles, a looming recession could hurt demand. The company has already cut 10% of its salaried workforce, and Elon Musk has said he views a recession as "inevitable." Musk also said Tesla's Berlin and Austin gigafactories are "gigantic money furnaces," and the company recently raised prices on nearly all of its models.
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Ending a project that once sought to build a world-spanning financial network, Meta announced on the Novi website Friday that the pilot test of its blockchain-based money-transfer app would end in September.
Novi was a far cry from what Meta CEO Mark Zuckerberg and then-Meta executive David Marcus originally envisioned. They unveiled plans for a stablecoin, initially called Libra, in 2019, with plans to launch it in 2020, along with a crypto wallet called Calibra. It soon faced resistance from regulators around the globe. The token was renamed Diem and the wallet Novi, but the new name didn't change official skepticism.
Novi eventually launched as a money-transfer service using the USDP stablecoin issued by Paxos, not the still-unlaunched Diem, and operating only between the U.S. and Guatemala. Marcus left Meta last year, and Meta sold assets related to the project to its banking partner, Silvergate.
Novi was supposed to become the new brand for all of Meta's financial products, including Facebook Pay. But after Marcus' departure, Meta started downplaying the Novi name. Meta's financial operations became Meta Financial Technologies in March, and Facebook Pay became Meta Pay in June.
Meta hasn't completely abandoned its blockchain ambitions, signaling that support for cryptocurrency payments will eventually be built into Meta Pay.
The rebranding wasn't cheap: An affiliate of Meta, Beige Key LLC, paid MetaBank $60 million last year for the rights to the trademark. MetaBank is renaming itself Pathward.
Marcus has founded a startup called Lightspark, which is working on developing Lightning, a payments technology that runs on top of the bitcoin blockchain.
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In the wake of privacy concerns following Roe v. Wade being overturned, Google said Friday that it will start automatically deleting location history related to potentially sensitive places.
Jen Fitzpatrick, SVP of Core Systems at Google, wrote in a blog post that the company will start deleting visit data from facilities like abortion clinics, fertility centers, counseling centers, domestic violence shelters, addiction treatment facilities and weight loss clinics "soon after" the visits take place when its system identifies that a visit has taken place.
The change will go into effect in the coming weeks for users who have the Location History setting turned on, Fitzpatrick said. The Location History setting is turned off on Google accounts by default.
"Given that these issues apply to healthcare providers, telecommunications companies, banks, tech platforms, and many more, we know privacy protections cannot be solely up to individual companies or states acting individually," Fitzpatrick wrote.
The move comes amid rising worries that people's digital trails of location and other data can be used against them in states where abortion is banned. After a draft Supreme Court opinion was leaked in May, legislators wrote to Google urging the company to “stop unnecessarily collecting and retaining customer location data, to prevent that information from being used by right-wing prosecutors to identify people who have obtained abortions.” Protocol reached out to Google earlier this week, but the company did not respond.
With Roe v. Wade overturned, companies may find themselves being forced to turn over data to help states investigate people seeking or facilitating abortions.
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Voyager Digital said Friday it is suspending trading, deposits and withdrawals, in the latest sign of the deepening crisis in the crypto markets. Voyager said the move is meant to give the major crypto broker “additional time” to look for “strategic alternatives” as the company grapples with the impact of the market slump, CEO Stephen Ehrlich said in a statement.
“This was a tremendously difficult decision, but we believe it is the right one given current market conditions," he said.
The suspension of services followed Monday’s announcement by the major crypto broker that Three Arrows Capital had defaulted on a loan from Voyager of cryptocurrencies worth $666 million.
Two weeks ago, Voyager said it had secured a revolving line of credit of $200 million and 15,000 bitcoins from Alameda Research, a firm controlled by FTX CEO Sam Bankman-Fried. At the time, Ehrlich said the line would help the company “mitigate current market conditions and strengthen our relationship with one of the industry leaders.”
The total value of the cryptocurrency market has shed roughly $2 trillion in the last seven months, as bitcoin’s value has dipped below $20,000 and other tokens have dropped severely in value.
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BlockFi CEO Zac Prince said his company has signed a deal giving FTX the option to buy the crypto lender for up to $240 million as part of a credit financing agreement.
BlockFi has secured a $400 million credit facility from FTX, which would also have the option to acquire the company “at a variable price of up to $240M based on performance triggers,” Prince said in a tweet on Friday.
Prince made the announcement a day after denying “market rumors” that FTX would buy the company for $25 million. The deal for a company once valued by its investors at around $5 billion is one more sign of the deepening slump in the crypto market. Cryptocurrencies have shed roughly $2 trillion in the last seven months, and the companies trading and lending against them have seen their value fall as well. BlockFi announced recently that it was slashing 20% of its workforce.
Interlocking financial relationships between crypto companies have contributed to some companies' woes, either directly or indirectly.
“Crypto market volatility, particularly market events related to Celsius and 3AC, had a negative impact on BlockFi,” Prince said.
He said that the news two weeks ago that Celsius was stopping withdrawals, swaps and transfers “started an uptick in client withdrawals from BlockFi’s platform despite us having no exposure to them.”
In its quest for a solution, Prince said BlockFi was “presented with various unattractive options where client funds would take a haircut or be behind a lender in the capital stack,” which he said were “completely unacceptable.”
The FTX deal was “the best path forward for all,” Prince said.
FTX CEO Sam Bankman-Fried didn't comment directly on the deal, but he retweeted a Twitter user who said, "Tinder, but it’s FTX swiping left or right on distressed assets."
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Tesla is facing yet another racial discrimination lawsuit, this one brought by 15 Black current and former employees who are suing the company in California.
The workers said the company’s culture allowed for “blatant, open and unmitigated race discrimination” and most of the alleged behaviors are said to have occurred at the company's factory in Fremont.
“Slavery,” “plantations” and racial slurs were allegedly used by colleagues and managers, according to the suit. Some of the workers allege being passed over for promotions, and in one instance, an employee alleges he was demoted after he returned to work following a COVID-related leave of absence.
This is the latest in an increasing list of lawsuits accusing Tesla of racial discrimination and other workplace misconduct. An investigation by Protocol found that almost 120 people had requested the right to sue Tesla on grounds of discrimination between 2018 and 2021 in California. Nearly 40% of the cases were race-related.
Tesla has previously denied that it has a toxic work culture. In February, as Tesla faced an imminent suit from the California Department of Fair Employment and Housing, the company said its factory in Fremont had a “majority-minority workforce” and that it “strongly opposes all forms of discrimination and harassment and has a dedicated Employee Relations team that responds to and investigates all complaints.”
“Tesla has always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others in different ways,” it added.
Tesla has also challenged the Department of Fair Employment and Housing’s powers to sue the company and has previously described the suits as politically motivated.
In May, as he went on yet another Twitter tirade, Elon Musk said he was recruiting lawyers to join a new “litigation department where we directly initiate and execute lawsuits. The team will report directly to me.”
"Looking for hardcore streetfighters, not white-shoe lawyers," Musk wrote. "There will be blood.”
But already, the lawsuits are starting to cost the EV-maker millions. Last November, the company lost a racial discrimination lawsuit in California, and it was asked to pay Owen Diaz, a Black former employee, $137 million. A federal judge reduced the payout to $15 million, which was rejected by Diaz.
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Klarna is close to raising new funding at a valuation of about $6.5 billion, which would be far below its last round raised last year, according to the Wall Street Journal. The move is the latest sign of the effects of inflation and the economic downturn on the fintech sector and "buy now, pay later" in particular.
Last June, during a frenzy of interest in "buy now, pay later" providers, Klarna raised $639 million in funding led by SoftBank at a $45.6 billion valuation, which was a big jump from its 2019 funding at a $5.5 billion valuation. Klarna, originally from Sweden, has become known as one of the largest "buy now, pay later" providers globally.
But the economic downturn has hit pay-later providers, along with the rest of the fintech industry. While these companies have said that they are less affected by the downturn than other consumer credit companies, the prospect of a recession could hurt the consumer spending that pay-later companies finance.
The new Klarna funding round, to be led by current investor Sequoia Capital, per the Journal, would be a down round, particularly affecting investors who put money into the company at the $46.5 billion valuation last year.
When companies raise funding in a down round, existing shareholders — including founders, employees and prior investors — can see the value of their equity reduced as the new investment dilutes their holdings and resets the price of shares. Sequoia Capital, which is reportedly leading this new round, is already an investor in Klarna, so participating in the new round could help preserve its overall stake. Venture capitalists also can arrange for protections against down rounds when they invest, which can involve granting additional shares or repricing earlier rounds.
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Crypto companies will have to disclose just how much climate damage is tied to the tokens they're hawking. At least in Europe, that is.
Late Thursday, the European Parliament and EU states nailed down an agreement to regulate cryptocurrencies, including a requirement that crypto companies selling tokens on the continent disclose their environmental impact.
While the new law does not restrict how much operations can pollute, it will require telling crypto investors precisely how much energy crypto assets consume and how much carbon is emitted in the process. It’s a major step toward making crypto's impact on the climate less of a black box.
This disclosure mandate is part of the landmark Markets in Crypto-Assets (MiCA) law, which seeks to impose some order on what Stefan Berger, the member who represented the European Parliament in the negotiations, called the "Wild West" that is the crypto market. MiCA will require companies to secure a license and take customer protection measures in order to sell cryptocurrencies in the EU.
Berger said in a statement that the new law “will help to move crypto markets away from the dodgy backwaters of the internet by applying minimum standards that are similar to other types of financial services.”
The recent crypto crash served as a backdrop for the negotiations, having illustrated “how highly risky and speculative” the market can be, Berger added. Crypto prices have fallen off a cliff over the past few months, including the high-profile collapse of Terra in mid-May.
Beyond volatility and the risk to investors, cryptocurrencies have also come under fire for the copious amount of energy they use, particularly those that rely on proof of work mining to keep the network secure. (That includes bitcoin, the biggest cryptocurrency on the planet.) The vast energy usage tied to proof of work — and carbon emissions that come with it — have led to both national crackdowns and state-level fights. Most recently, New York became the first state in the U.S. to implement a crypto mining moratorium so lawmakers could get a better handle on its climate impacts.
Berger, however, pointed out that other industries like entertainment, data centers and traveling are also energy intensive. The goal of MiCA, he said, is to make Europe a crypto innovation hub while simultaneously reducing the industry's impact on the climate.
The rule could set the tone for future laws governing what has been a largely unregulated market up to this point. Neither the U.S. nor the U.K. — both major crypto markets — have taken similar regulatory steps, though pressure is mounting for both to do so. The EU law, which is anticipated to take effect at the end of next year, could turn up the heat a bit more.
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Gene Levoff, Apple's former director of Corporate Law, pleaded guilty to insider trading, the Department of Justice announced Thursday.
Levoff has been charged with six counts of securities fraud for executing trades of Apple stock based on nonpublic information about Apple's financial results, allowing him to make $227,000 on some trades and avoid losses of around $377,000 on others between February 2011 and April 2016. Each fraud count carries a maximum sentence of 20 years in prison, along with a $5 million fine.
Levoff was co-chairman of Apple’s Disclosure Committee, which reviewed the company's earnings materials and SEC filings before they were made public, and "mined these materials for inside information" to guide his stock sales, the DOJ said. Levoff sold large amounts of stock when financial results were bad and bought large amounts when results were good.
While at Apple, Levoff was subject to the company's “blackout periods,” in which employees who had access to nonpublic information were not allowed to buy or sell stock, but he ignored those restrictions.
“Despite being responsible for enforcing Apple’s own ban on insider trading, Levoff used his position of trust to commit insider trading in order to line his own pockets," U.S. Attorney Vikas Khanna said in a statement.
Apple did not respond to request for comment from Protocol. Levoff's sentencing is scheduled for Nov. 10.
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New York state environmental regulators have declined to extend a key permit to a controversial cryptocurrency mining operation in the state's Finger Lakes region.
The state Department of Environmental Conservation said Thursday that the gas-powered Greenidge generation plant does not comply with the state's climate laws and declined to extend an air quality permit. The 107-megawatt plant became a flashpoint in the debate earlier this year as New York lawmakers passed a bill placing a moratorium on new permits for gas-powered crypto mining.
Gov. Kathy Hochul has yet to sign that bill. But her administration has now ruled that the Greenidge facility is out of step with New York's 2019 Climate Leadership and Community Protection Act. The law requires emissions to be slashed statewide by 40% from 1990 levels by 2030 and 85% by 2050.
Greenidge converted the decades-old plant to natural gas in 2017 and began mining bitcoin from the facility in 2019, sparking significant backlash within the region, which is known in part for its wine production.
In a letter to Greenidge, the DEC wrote that greenhouse gas emissions from the facility had "drastically increased" since the company was issued a permit in 2016. The increase, the letter said, was driven by Greenidge altering the facility's purpose to increasingly focus on powering proof-of-work mining. More than half of the facility's energy production in the first six months of 2021 went toward "behind-the-meter" crypto mining, according to the DEC.
Greenidge said Thursday it will appeal the decision and, in the meantime, its operations will continue. The company said it offered a plan to reduce its emissions 40% by 2025, but state regulators declined to engage further.
"We believe there is no credible legal basis whatsoever for a denial of this application because there is no actual threat to the State's Climate Leadership and Community Protection Act (CLCPA) from our renewed permit," reads the statement. "This is a standard air permit renewal governing emissions levels for a facility operating in full compliance with its existing permit today. It is not, and cannot be transformed into, a politically charged 'cryptocurrency permit.'"
The DEC's decision marks a major victory for local environmental and other advocacy groups who led the push against using greenhouse-gas-emitting plants to power crypto mining.
"Governor Hochul and the DEC stood with science and the people, and sent a message to outside speculators: New York's former fossil fuel-burning plants are not yours to re-open as gas-guzzling Bitcoin mining cancers on our communities," said Yvonne Taylor, vice president of Seneca Lake Guardian, in a statement Thursday. "Now, it's up to Governor Hochul to finish the job by signing the cryptomining moratorium bill."
The DEC had delayed the decision multiple times and said it sifted through 4,000 comments before coming to Thursday's ruling.
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FTX is reportedly close to gobbling up BlockFi for about $25 million, though BlockFi's CEO has dismissed the talk as "market rumors."
The crypto exchange is in talks to acquire crypto lender BlockFi, which has been reeling from the market downturn, according to a CNBC report published on Thursday citing unnamed sources. The Block also reported that FTX and BlockFi were close to a deal, with FTX having previously obtained an option to buy a 50% stake in the company in exchange for extending it a $250 million line of credit. FTX would pay $25 million for the remaining shares.
The deal could take a few months to close, and the final price could change, CNBC said. But BlockFi CEO Zac Prince denied the "market rumors," saying in a tweet, "I can 100% confirm that we aren’t being sold for $25M. I encourage everyone to trust only details that you hear directly from BlockFi."
BlockFi was last valued at roughly $4.8 billion with $1.2 billion in funding from investors that include Bain Capital, Coinbase Ventures and Tiger Global, according to data from PitchBook. A deal on the terms described in the reports would all but wipe out BlockFi's shareholders.
BlockFi recently announced that it was slashing 20% of its workforce. Prince said in a tweet that the company had been “impacted by the dramatic shift in macroeconomic conditions.”
The crypto lender has also faced regulatory headwinds. BlockFi settled with the SEC in February over its lending products, paying a $100 million fine and agreeing to seek a registration for a new BlockFi Yield product as a security. It stopped accepting customers for its BlockFi Interest Account in the U.S. as part of the settlement.
This story has been updated with BlockFi CEO Zac Prince's statement.
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The CFPB said it has terminated a sandbox deal that gave earned wage access provider Payactiv “temporary safe harbor from liability” under key lending regulations.
The CFPB granted Payactiv “special regulatory treatment” in December 2020 to offer “earned wage access” products that would allow employees to obtain wages they already earned before payday.
Payactiv gets paid back through a payroll deduction from the employee’s next paycheck. The company makes money through fees.
The CFPB said it had informed Payactiv early this month that it was “considering terminating the approval order in light of certain public statements the company made wrongly suggesting a CFPB endorsement of its products.”
The company requested that the CFPB end the sandbox order after notifying the agency that it planned to modify its product fee model, the CFPB said.
The move underlined the CFPB’s increasingly critical view of sandbox deals that the agency said “proved to be ineffective.”
Safwan Shah, Payactiv's founder and CEO, is credited with coining the term "earned wage access," which has been criticized by consumer advocates as being potentially predatory, especially when it comes to workers who don’t make much money.
Shah has argued that it benefits ordinary workers, citing a dieting principle: "The less you are paid, the more frequently you should be paid," he told Protocol in a 2021 interview. "If you're going to eat 500 calories, don't eat them in one sitting. Spread them throughout the day."
Correction: This story has been updated to correct the spelling of Payactiv's name. This story was updated June 30, 2022.
Samsung announced Wednesday that it has taken a significant step toward rolling out a next-generation manufacturing technology that has the potential to reshuffle the chip industry.
Samsung said that it had begun initial production of its three-nanometer manufacturing process, which includes the introduction of a new transistor architecture called gate-all-around, or GAA. The new gate architecture reduces power consumption, while at the same time boosting performance — characteristics that set chips made with it apart from others.
With any new chip manufacturing technology, just printing a few wafers doesn't count as a win. To be successful, Samsung will have to scale the 3-nanometer process to high-volume production, which means hundreds of thousands or millions of chips.
Samsung didn’t announce any customers for the new manufacturing method, which will be geared toward mobile and high-performance computing chips such as the ones found in Samsung's mobile phones. That's notable because there have been multiple reports that Samsung has lost big customers such as Qualcomm because its fabs can’t produce working chips at the cadence required by high-volume customers.
Intel has said it plans to introduce the new gate design at high volume in 2024, and it was the first to optimize the transition to the current generation about decade ago. TSMC expects chips using the new gates to begin production in 2025, suggesting that executives predict that its adoption of another important manufacturing technology called extreme ultraviolet lithography, and other techniques, will be sufficient to boost performance until then.
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Amazon has censored search results related to LGBTQ+ products in the United Arab Emirates after being pressured by the government.
Among the products restricted within the country are chest binders, LGBTQ+ flags and books such as Maia Kobabe’s "Gender Queer: A Memoir." The UAE criminalizes same-sex sexual acts, and offenders can face up to 14 years in prison.
It is unclear what kind of sanction Amazon would have received if it had refused the demand.
On Wednesday, Amazon spokesperson Nicole Pampe told The New York Times, which first reported the restrictions, “As a company, we remain committed to diversity, equity and inclusion, and we believe that the rights of L.G.B.T.Q.+ people must be protected. With Amazon stores around the world, we must also comply with the local laws and regulations of the countries in which we operate.”
This is emblematic of a situation in which Big Tech supports LGBTQ+ rights at home but acquiesces to the slightest challenge abroad. Protocol has previously reported about how Google and Twitter have remained silent on a new anti-LGBTQ+ bill proposed in Ghana’s parliament that would prohibit social media users from discussing LGBTQ+ life in a positive manner or advocating for the community.
Google and Twitter have established offices in Ghana, and activists have called on them to help kill the bill.
But even at home, some corporations including Amazon have been accused of "pinkwashing," in which major corporations present themselves as supportive of LGBTQ+ communities but often donate to anti-LGBTQ+ politicians.
For Pride Month, Amazon encouraged prospective employees to “Bring your whole self to work, every day. At Amazon, we're dedicated to build a better workplace for our LGBTQIA+ employees.”
However, the company was banned from the Pride parade in its hometown of Seattle because of “their financial donations to politicians who actively propose and support anti-LGBTQIA+ legislation, oppose pro-LGBTQIA+ and other human rights legislation, and for allowing anti-LGBTQIA+ organizations to raise funds from their AmazonSmile program,” Seattle Pride organizers said. “We simply cannot partner with any organization actively harming our community through the support of discriminatory laws and politics.”
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Grayscale is suing the U.S. Securities and Exchange Commission after the regulator denied the company's bid to convert its bitcoin trust into an exchange-traded fund.
The SEC late Wednesday published a notice that it had rejected Grayscale's request, saying it did not meet legal standards designed to protect investors. Grayscale announced shortly after that it had filed a lawsuit in the U.S. Court of Appeals for the D.C. Circuit.
"Through the ETF application review process, we believe American investors overwhelmingly voiced a desire to see GBTC convert to a spot Bitcoin ETF, which would unlock billions of dollars of investor capital while bringing the world’s largest Bitcoin fund further into the U.S. regulatory perimeter," said Michael Sonnenshein, Grayscale’s CEO. "We will continue to leverage the full resources of the firm to advocate for our investors and the equitable regulatory treatment of Bitcoin investment vehicles.”
The company had been hinting for weeks that it would sue if the SEC denied its application. Earlier this month, Grayscale brought on some major legal firepower by hiring Donald Verrilli, who served as solicitor general during the Obama administration, as a legal strategist.
"The SEC is failing to apply consistent treatment to similar investment vehicles, and is therefore acting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934,” Verrilli said in the company's press release.
The rejection marks the latest piece of bad news for the industry. Bitcoin has seen its market value fall by more than 70% from a peak in November near $70,000.
Grayscale filed for approval in October to convert its bitcoin trust, GBTC, into a spot ETF, a move it said would broaden access to the cryptocurrency by offering a fund based on holding the asset rather than its futures. Launched in 2013, GBTC holds about $13 billion in assets.
Grayscale told the SEC in May that converting the trust into an ETF could unlock about $8 billion for investors.
The SEC has previously declined similar attempts from other companies to hold bitcoin directly in an ETF rather than through bitcoin futures contracts.
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App developers in South Korea can now use third-party payment systems, Apple announced in a blog post Thursday.
The change is Apple's response to legislation in South Korea that prevents app store operators from forcing developers to use their own in-app payment systems. Now, developers can use alternatives and bypass Apple and Google's 30% commission by accepting money directly from consumers. The law was an amendment to South Korea's Telecommunications Business Act, passed last summer.
The law frustrated Apple and Google at the time — both lobbied the Biden administration to intervene — and ultimately both companies have since complied, though South Korean lawmakers have taken issue with Google's implementation because it still imposes high fees on developers that opt to use an alternative system. Apple initially argued the rule would open the door for fraud, undermine user privacy and make it harder to manage payments.
Developers can now use Apple's so-called "StoreKit External Purchase Entitlement," which lets apps distributed on the App Store in South Korea offer an alternative payment option, to comply with the new law. "Developers who want to continue using Apple’s in-app purchase system may do so and no further action is needed," Apple wrote in the blog.
Apple also said developers who choose to use external payment systems won't be able to use features like Ask to Buy or Family Sharing because the company can't validate payments that occur outside the App Store's "private and secure payment system." The company also can't help with refunds, purchase history , subscription management and other issues users may face by using third-party systems. "You will be responsible for addressing such issues," Apple wrote in the blog.
In a separate document, Apple details how, like Google, it still intends to charge a high commission — in this case, 26% — for transactions outside its payment system. Developers are responsible for reporting sales to Apple on a monthly basis in order to pay the requisite fees. "Apps that are granted an entitlement to use a third-party in-app payment provider will pay Apple a commission on transactions," the company explained. "Apple will charge a 26% commission on the price paid by the user, gross of any value-added taxes. This is a reduced rate that excludes value related to payment processing and related activities."
Other countries have begun to target Apple's in-app payment systems. The Dutch Authority for Consumers and Markets ordered Apple to allow dating app developers in the Netherlands access to third-party payment systems, which Apple complied with after several fines. The European Union's Digital Markets Act includes rules for Apple to let users install apps from external sources, while a U.S. judge ruled last year that Apple must tell customers about alternative payment methods as a result of Fortnite maker Epic Games' antitrust lawsuit. Apple appealed that decision.
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An employee working for OpenSea's email delivery vendor misused their customer data access to download and share email addresses with an "unauthorized external party," the NFT marketplace wrote in a company blog post Wednesday. The employee worked for Customer.io.
OpenSea said customers who have shared their emails in the past "should assume" they were affected and will receive an email from opensea.io with more information. Customer.io launched an investigation into the issue, and the incident was reported to law enforcement.
"Your trust and safety is a top priority," OpenSea wrote. "We wanted to share the information we have at this time, and let you know that we’ve reported the incident to law enforcement and are cooperating in their investigation."
It's unclear how many customers were affected, although some people tweeted that they had received an email from OpenSea notifying them that they were impacted. It's also unclear if the employee still works for Customer.io.
Customer.io said it took "immediate steps" to investigate as soon as it learned of the incident, including hiring a third-party forensic investigations team. The employee behind the incident was suspended and has had all access to email information removed.
"We are working closely with OpenSea and are reviewing exactly how these email addresses were compromised," a representative for Customer.io said in a statement. "We believe this resulted from the actions of an employee who had role-specific access privileges that were abused. We do not believe any other clients’ data has been compromised, but we are continuing to investigate."
Earlier this month, a former OpenSea product manager was charged with wire fraud and money laundering in the first-ever insider trading charge involving digital assets. The employee bought NFTs before they were publicly featured on OpenSea's site and sold them for two to five times the price of his original purchase.
This story was updated to include a statement from Customer.io sent after publication.
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Javier Soltero is leaving Google Workspace, Google Cloud CEO Thomas Kurian announced Wednesday in an email to staff viewed by Protocol. Soltero will leave his role effective July 15.
Soltero confirmed his plans on Twitter, saying, "I am proud of what we've accomplished during this time & confident [sic] the Workspace team, its leaders, and our strategy."
Soltero originally joined Google’s G-Suite team in 2019 after leaving Microsoft, where he ran product strategy for Microsoft Office. Soltero became a Microsoft employee when the company acquired his email startup, Acompli, in 2014. From there he rose through the ranks from general manager of Outlook Mobile to corporate vice president of the Office Product Group.
Google then hired Soltero to try and run the Microsoft playbook with what used to be known as G-Suite, as the company pushed further into the office productivity space. In his role as vice president and general manager, Soltero reported directly to Kurian and managed the company’s full suite of productivity and collaboration tools, which includes Gmail, Calendar, Drive, Docs, Slides and Meet.
In October of 2020, just a year after Soltero joined Google, the company rebranded its suite as Google Workspace. Then in February of this year, Google launched a free business version of Workspace, meant to capture small businesses and teams within larger companies.
Both moves were a part of Google Cloud's overall strategy to increase adoption of its productivity suite among consumers and enterprises. Under Soltero's leadership that has happened: Monthly active users of Google Workspace have grown more than 50% over the last three years, according to Kurian's email.
Aparna Pappu, who is currently the vice president leading engineering for Workspace, will assume the role of general manager leading Google Workspace after Soltero's departure, Kurian said in the email.
"After such an intense sprint, it's time for me to take a break before I figure out what is next," Soltero said on Twitter. "I am an entrepreneur at heart & want to take time to explore new things to build."
This story was updated with additional information that became available after it was published.
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San Francisco-based game development tools provider Unity is laying off hundreds of employees, according to a report from Kotaku.
Word of the layoffs appears to have begun surfacing earlier this week on the anonymous workplace platform Blind, with numerous users claiming to work for Unity saying management was pulling employees into Zoom meetings on Tuesday to announce they were being let go. Kotaku, citing multiple sources, now says the layoffs number in the hundreds.
According to Kotaku, Unity CEO John Riccitiello told employees two weeks ago that the company was on solid financial footing and would not be resorting to layoffs. The cuts are affecting employees all around the globe, the report says.
Unity confirmed the layoffs in a statement to Protocol and said slightly more than 200 people were affected. "As part of a continued planning process where we regularly assess our resourcing levels against our company priorities, we decided to realign some of our resources to better drive focus and support our long-term growth. This resulted in some hard decisions that impacted approximately 4% of all Unity workforce. We are grateful for the contributions of those leaving Unity and we are supporting them through this difficult transition.”
Unity employed 5,245 people as of December 31, 2021, indicating the company had nearly doubled its workforce since the year it went public. It's also made a number of high-profile acquisitions since going public two years ago, including its largest ever when it purchased New Zealand-based digital effects studio Weta Digital for more than $1.6 billion last November.
However, the company's stock price has fallen more than 40% since its 2020 debut, and more than 70% this year alone. The company also reported a loss of eight cents a share in its most recent quarterly earnings report and lowered its fiscal year guidance. Some employees have said the firm enacted a hiring freeze earlier this year, though it has not publicly said so.
Unity mainly competes with open source or free game development tools, in-house game engines used by major developers and with Fortnite creator Epic Games, which distributes its Unreal Engine platform for making high-fidelity 3D games. While a number of high-profile developers, including Electronic Arts subsidiary BioWare and The Witcher developer CD Projekt Red, have signed up to use Epic's new Unreal Engine 5, Unity mostly caters to the mobile and indie game market, where it makes money through licensing and also through providing in-game advertising tools to free-to-play developers.
Unity also been trying to break into the Hollywood VFX industry, where it competes with both established digital effects studios and Epic, which has been making efforts to do the same with Unreal Engine. Despite its strong foothold in the mobile game segment, however, Unity does not develop games of its own and as a result does not have additional revenue streams outside its engine licensing business, ad unit and other related software products.
Update June 30, 9AM ET: Added statement of confirmation from Unity.
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Niantic is reportedly cutting between 85 and 90 staff members, or 8% of its workforce.
The company also canceled four of its upcoming projects: Heavy Metal, Hamlet, Blue Sky and Snowball. CEO John Hanke said in an email to employees that the company has been cutting costs in several areas as it is “facing a time of economic turmoil," Bloomberg reported Wednesday, and that the company needs to "further streamline our operations" to weather "economic storms that may lie ahead.”
Niantic's biggest title, Pokémon Go, has raked in more than $1 billion per year. But none the company's subsequent games have achieved the same level of success. In a statement to Bloomberg, the company said it was cutting staff and production to "focus on our key priorities."
Earlier this week, Niantic announced that it's partnering with the NBA for an upcoming game called NBA All-World. The company said that this game is still in production.
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