A new report looks at the firms that quietly move billions around the banking industry each day. Reciprocal deposits enable banks to place deposits with another bank and receive the same value back through technology firms, reshuffling approximately $1 trillion through their platforms. This deposit-swapping allows banks to offer customers more insurance, a priority after Silicon Valley Bank's failure, where 93% of deposits were uninsured. At the end of last year, around 45% of deposits in the American banking system were uninsured.

Invented by Eugene Ludwig in 2002, reciprocal deposits help banks offer greater deposit insurance without forgoing deposit funding. Ludwig's firm, IntraFi, allows banks to place insured deposits around the system while receiving the same value from other locations. IntraFi, the largest firm with 3,000 banks on its platform, has been joined by r&t Deposit Solutions, ModernFi, and StoneCastle Cash Management. These firms are experiencing rapid growth, with reciprocal deposits' value increasing significantly since March.

The story asks: All this deposit-swapping raises the question of whether it makes sense to maintain the federal cap. The private sector has come up with a clever workaround to offer more deposit insurance than mandated. It is conceivable that, with several thousand banks in the network, an account could offer deposit insurance for hundreds of millions of dollars. Indeed, StoneCastle offers an account with $125m in deposit insurance. But there is a difference between a private-sector workaround and a public-sector mandate. It is currently difficult to match banks so that all are able to offer such high limits (most offer just a few million dollars' insurance), and reciprocal-deposit firms levy fees, too. They apply on top of the charges, of between 0.05% and 0.32% of the value of total liabilities, that institutions pay for federal-deposit insurance.

Abolishing the cap would make insurance pricier across the system; these higher costs would almost certainly be passed on to customers in the form of lower interest rates. Still, if enough depositors seek insurance by spreading deposits around, higher costs might be the result anyway.

US banks, already hesitant to work with crypto customers, are now even warier of providing services to the industry after a string of regional-lender collapses and amid heightened scrutiny by regulators. From a report: The closure of crypto-friendly Silvergate Capital and seizure of Signature Bank has left crypto firms struggling to find new banks for depository and payment services. While there's no blanket ban on serving crypto clients, financial firms are imposing lengthy application procedures, turning away smaller companies and some retail platforms, and in some cases shutting the door on crypto businesses altogether, according to industry participants, investors and bank executives.

Cross River Bank, for example, received requests from more than 100 new clients -- not all of whom were crypto companies -- seeking a safe harbor for their deposits within days of SVB Financial Group's Silicon Valley Bank and Signature collapsing, according to a person with direct knowledge of the bank's business. The closely held company turned down almost all those requests, the person said. Among the few crypto companies that have won over the bank is stablecoin issuer Circle Internet Financial, which expanded a partnership with Cross River, announced after Silicon Valley Bank failed. Earlier this month, lenders that were bidding to buy failed Signature Bank from the Federal Deposit Insurance Corp. specifically asked not to take on the digital-assets business, according to a person familiar with the process. Signature's crypto business was not part of the eventual takeover by New York Community Bancorp, and the FDIC is still seeking to sell Signet, Signature's real-time payments network for crypto firms.

An anonymous reader quotes a report from STAT News: Health insurance companies have rejected medical claims for as long as they've been around. But a STAT investigation found artificial intelligence is now driving their denials to new heights in Medicare Advantage, the taxpayer-funded alternative to traditional Medicare that covers more than 31 million people. Behind the scenes, insurers are using unregulated predictive algorithms, under the guise of scientific rigor, to pinpoint the precise moment when they can plausibly cut off payment for an older patient's treatment. The denials that follow are setting off heated disputes between doctors and insurers, often delaying treatment of seriously ill patients who are neither aware of the algorithms, nor able to question their calculations. Older people who spent their lives paying into Medicare, and are now facing amputation, fast-spreading cancers, and other devastating diagnoses, are left to either pay for their care themselves or get by without it. If they disagree, they can file an appeal, and spend months trying to recover their costs, even if they don't recover from their illnesses.

The algorithms sit at the beginning of the process, promising to deliver personalized care and better outcomes. But patient advocates said in many cases they do the exact opposite -- spitting out recommendations that fail to adjust for a patient's individual circumstances and conflict with basic rules on what Medicare plans must cover. "While the firms say [the algorithm] is suggestive, it ends up being a hard-and-fast rule that the plan or the care management firms really try to follow," said David Lipschutz, associate director of the Center for Medicare Advocacy, a nonprofit group that has reviewed such denials for more than two years in its work with Medicare patients. "There's no deviation from it, no accounting for changes in condition, no accounting for situations in which a person could use more care."

STAT's investigation revealed these tools are becoming increasingly influential in decisions about patient care and coverage. The investigation is based on a review of hundreds of pages of federal records, court filings, and confidential corporate documents, as well as interviews with physicians, insurance executives, policy experts, lawyers, patient advocates, and family members of Medicare Advantage beneficiaries. It found that, for all of AI's power to crunch data, insurers with huge financial interests are leveraging it to help make life-altering decisions with little independent oversight. AI models used by physicians to detect diseases such as cancer, or suggest the most effective treatment, are evaluated by the Food and Drug Administration. But tools used by insurers in deciding whether those treatments should be paid for are not subjected to the same scrutiny, even though they also influence the care of the nation's sickest patients.

The New York Times magazine tells the story of an innocuous-seeming message on LinkedIn in 2017 from Qu Hui, the deputy director of the China-based Provincial Association for International Science and Technology Development.

Federal agents eventually obtained search warrants for two Gmail addresses the official was using, and "In what would prove to be a lucky break, the investigators found that each email address was the Apple ID used for an iPhone, linked to an iCloud account where data from the phones was periodically backed up. The agents were later able to obtain search warrants for the two iCloud accounts [that] opened a treasure trove." This included confirmation of what they had suspected all along: that Qu worked for Chinese intelligence. His real name was Xu Yanjun. He had worked at the Ministry of State Security since 2003, earning six promotions to become a deputy division director of the Sixth Bureau in the Jiangsu Province M.S.S. Like so many of us, he had taken pictures of important documents using his iPhone — his national ID card, pay stubs, his health insurance card, an application for vacation — which is how they ended up in his iCloud account. There, investigators also found an audio recording of a 2016 conversation with a professor at N.U.A.A. in which Xu had talked about his job in intelligence and the risks associated with traveling. "The leadership asks you to get the materials of the U.S. F-22 fighter aircraft," he told the professor. "You can't get it by sitting at home." The discovery of evidence of Xu's identity in an iCloud account makes for a kind of delicious reversal. The ubiquitous use of iPhones around the world — a result of America's technological prowess — was helping to fight back against a rival nation's efforts to steal technology.
Qu scheduled a meeting in Brussels with one American target — where he was arrested and extradited to America, becoming the first-ever Chinese intelligence official convicted on U.S. soil on charges of economic espionage. The prosecution contended that Xu had been systematically going after intellectual property at aerospace companies in the United States and Europe through cyberespionage and the use of human sources. It's not often that prosecutors find a one-stop shop for much of their evidence, but that's what Xu's iCloud account was — a repository of the spy's personal and professional life. That's because often Xu used his iPhone calendar as a diary, documenting not just the day's events but also his thoughts and feelings.... The messages in Xu's iCloud account enabled investigators to make another damning discovery. Xu had helped coordinate a cyberespionage campaign that targeted several aviation technology companies....

At the end of the trial, Xu was convicted of conspiring and attempting to commit economic espionage and theft of trade secrets.... According to Timothy Mangan, who led the prosecution, the evidence laid out during Xu's trial goes far beyond merely proving his guilt — it uncovers the systematic nature of China's vast economic espionage. The revelation of Xu's activities lifts the veil on how pervasive China's economic espionage is, according to the F.B.I. agent. If just one provincial officer can do what he did, the agent suggests, you can imagine how big the country's overall operations must be.
The article notes that the Chinese government "also offers financial incentives to help Chinese expats start their own businesses in China using trade secrets stolen from their American employers." It also cites a 2019 report from a congressional committee's security review that found "myriad ways in which Chinese companies, often backed by their government, help transfer strategic know-how from the United States to China." The maneuvers range from seemingly benign (acquiring American firms with access to key intellectual property) to notoriously coercive (compelling American companies to form joint ventures with Chinese firms and share trade secrets with them in return for access to the Chinese market) to outright theft. Cyberattacks have become an increasingly common tactic because they can't always be linked directly to the Chinese government. Over the past few years, however, federal agents and cybersecurity experts in the U.S. have identified the digital footprints left along the trails of these attacks — malware and I.P. addresses among them — and traced this evidence back to specific groups of hackers with proven ties to the Chinese government.
One 2020 indictment blamed five "computer hackers" in China for breaching more than 100 organizations.

Thanks to Slashdot reader schwit1 for sharing the article.

IBM, along with 13 of its current and former executives, has been sued by investors who claim the IT giant used mainframe sales to fraudulently prop up newer, more trendy parts of its business. The Register reports: In effect, IBM deceived the market about its progress in developing Watson, cloud technologies, and other new sources of revenue, by deliberately misclassifying the money it was making from mainframe deals, assigning that money instead to other products, it is alleged. The accusations emerged in a lawsuit [PDF] filed late last week against IBM in New York on behalf of the June E Adams Irrevocable Trust. It alleged Big Blue shifted sales by its "near-monopoly" mainframe business to its newer and less popular cloud, analytics, mobile, social, and security products (CAMSS), which bosses promoted as growth opportunities and designated "Strategic Imperatives."

IBM is said to have created the appearance of demand for these Strategic Imperative products by bundling them into three- to five-year mainframe Enterprise License Agreements (ELA) with large banking, healthcare, and insurance company customers. In other words, it is claimed, mainframe sales agreements had Strategic Imperative products tacked on to help boost the sales performance of those newer offerings and give investors the impression customers were clamoring for those technologies from IBM. "Defendants used steep discounting on the mainframe part of the ELA in return for the customer purchasing catalog software (i.e. Strategic Imperative Revenue), unneeded and unused by the customer," the lawsuit stated.

IBM is also alleged to have shifted revenue from its non-strategic Global Business Services (GBS) segment to Watson, a Strategic Imperative in the CAMSS product set, to convince investors that the company was successfully expanding beyond its legacy business. Last April the plaintiff Trust filed a similar case, which was joined by at least five other law firms representing other IBM shareholders. A month prior, the IBM board had been presented with a demand letter from shareholders to investigate the above allegations. Asked whether any action has been taken as a result of that letter, IBM has yet to respond.

"To date, about 500 people have been put in cryogenic stasis after legal death," writes a Bloomberg Opinion technology columnist, "with the majority of them in the U.S.

"But a few thousand more, including Emil Kendziorra, are on waiting lists, wearing bracelets or necklaces with instructions for emergency responders. " Kendziorra, 36, runs Berlin-based Tomorrow Biostasis GmbH, one of the first cryonics businesses in Europe to join a market dominated by American firms organizations like The Alcor Life Extension Foundation and The Cryonics Institute. The former cancer doctor has several hundred people on his firm's waiting list. They skew to their late 30s, male and tend to work in technology. Patients can choose to have their entire body preserved and held upside down in a four-person dewars, a thermos-like aluminum vat filled with liquid nitrogen, or just preserve their brain, which is cheaper.

Kendziorra says cryopreservation overall has become less expensive over the past few decades on an inflation-adjusted basis, a claim that he bases on historic prices published by his peers, who he says are making a collective effort to bring down costs. That could be critical to shifting cryonics from a fringe pursuit to something a little more mainstream, especially since it is no longer just for billionaires like PayPal Inc. co-founder Peter Thiel (who has reportedly signed up with Alcor). Kendziorra, for instance, has made cryonics just another monthly subscription by capitalizing on insurance, he told me during a Twitter Spaces discussion on cryonics last month. His customers pay a 25-euro ($26.54) monthly fee to Tomorrow Biostasis, and they also make the company the beneficiary of a minimum 100,000-euro life insurance payout upon their legal death. Kendziorra says that covers the full cost of cryonics including the biggest outlay: maintenance over the next century or so.

All told, most of his customers are paying about 50 euros a month for both the company's subscription fee and the life insurance policy for the option of a long sleep at death. Of course, most companies don't survive for more than a century, so Tomorrow Biostasis also partners with a non-profit group in Switzerland to carry out the storage of customers on its behalf.... The domain itself is largely funded by wealthy individuals including CEOs of tech companies, angel investors and scientists, Kendziorra says, adding that for them to invest in his own firm, their primary motivation shouldn't be "monetary" but rather to help further the field.

The mechanics all sound sensible, but that still leaves the question of whether cryonics will work, medically speaking. Doctors and scientists have used words like quackery, pseudoscience and outright fraud to describe the field. Clive Cohen, a neuroscientist from Kings College London, has called it a "hopeless aspiration that reveals an appalling ignorance of biology." The Association of Cryobiology has compared it to turning a hamburger back into a cow.

The macro story unfolding today is all the layoffs taking place in the tech industry. "Tech giants including Meta and Amazon have been slowing down their hiring for months, while smaller tech companies such as Robinhood and Coinbase have announced layoffs," reports the New York Times. "But rarely have so many job cuts and hiring freezes in the industry been disclosed on the same day." From the report: The technology industry's slowdown came into even sharper relief on Thursday as Amazon publicly said it had paused hiring for its corporate work force and several other technology companies announced job cuts. [...] At the same time, Lyft said it would cut 13 percent of its employees, or about 650 of its 5,000 workers. Stripe, a payment processing platform, said it would cut 14 percent of its employees, roughly 1,100 jobs. [...] Tech companies have led the way for the U.S. economy over the past decade, lifting the stock market during the worst days of the coronavirus pandemic. But in recent weeks, many of the largest firms reported financial results that suggested they were feeling the impact of global economic jitters, soaring inflation and rising interest rates.

Social media companies in particular have been grappling with a pullback in digital advertising over the last few months. Meta, which owns Facebook and Instagram, said last week that its head count would remain "roughly flat" through the end of next year. The company plans to shrink some teams and hire only for high-priority areas. Snap, Snapchat's parent company, laid off 20 percent of its employees in August, blaming challenging macroeconomic conditions. Last week, Microsoft told investors that new hires in this quarter "should be minimal." Alphabet, which owns Google and YouTube, also said that in this quarter it would hire fewer than half the number of people it added in the third quarter.

More layoffs at tech companies are in the works. Elon Musk, who bought Twitter for $44 billion last week, has ordered cuts across the company, which employs about 7,500 people. Workers at Twitter have started circulating a "Layoff Guide" with tips on how to handle being laid off. On Thursday, Lyft said it had decided on layoffs in the face of "a probable recession sometime in the next year." All teams will be affected, said Logan Green and John Zimmer, the company's founders, in an email to employees. Over the summer, Lyft cut 2 percent of its employees, mostly as a result of shutting down its car rental business, and froze hiring. But the company still has "to become leaner," its founders said. It is "not immune to the realities of inflation and a slowing economy," which have led to increasing ride-share insurance costs. Lyft also said it planned to sell its first-party vehicle service business and expected employees on that team to be offered jobs at the acquiring company.

After admonishing crypto lender Voyager Digital for "false and misleading" statements on the subject, the FDIC said banks must ensure that crypto firms they partner with are clear about whether customer deposits are insured. From a report: In industry guidance published Friday, the Federal Deposit Insurance Corp. said insured banks should monitor that crypto firms they work with do not misrepresent the availability of deposit insurance and "should take appropriate action to address such misrepresentations." The notice comes a day after the FDIC and Federal Reserve demanded Voyager Digital correct what it called misrepresentations that suggested some of its customers were covered by federal insurance if the firm collapsed.

When Voyager filed for bankruptcy earlier this month, its banking partner, Metropolitan Commercial Bank, issued a statement clarifying that FDIC insurance is available "only to protect against the failure of Metropolitan Commercial Bank," not Voyager. Metropolitan is holding about $350 million in customer funds, which Voyager has told customers will be released after the bank undergoes a fraud prevention process. Metropolitan is far from the only bank holding deposits on behalf of crypto companies, and now the FDIC wants to ensure customers are not further confused about how, or if, their assets are covered.

The Federal Bureau of Investigation (FBI) warned US companies in a recently updated flash alert that the financially motivated FIN7 cybercriminals group is targeting the US defense industry with packages containing malicious USB devices. BleepingComputer reports: The attackers are mailing packages containing 'BadUSB' or 'Bad Beetle USB' devices with the LilyGO logo, commonly available for sale on the Internet. The packages have been mailed via the United States Postal Service (USPS) and United Parcel Service (UPS) to businesses in the transportation and insurance industries since August 2021 and defense firms starting with November 2021. FIN7 operators impersonate Amazon and the US Department of Health & Human Services (HHS) to trick the targets into opening the packages and connecting the USB drives to their systems. Since August, reports received by the FBI say that these malicious packages also contain letters about COVID-19 guidelines or counterfeit gift cards and forged thank you notes, depending on the impersonated entity.

After the targets plug the USB drive into their computers, it automatically registers as a Human Interface Device (HID) Keyboard (allowing it to operate even with removable storage devices toggled off). It then starts injecting keystrokes to install malware payloads on the compromised systems. FIN7's end goal in these attacks is to access the victims' networks and deploy ransomware within a compromised network using various tools, including Metasploit, Cobalt Strike, Carbanak malware, the Griffon backdoor, and PowerShell scripts. [...] Companies can defend against such attacks by allowing their employees to connect only USB devices based on their hardware ID or if they're vetted by their security team.

Supply is low, demand is high -- but that alone cannot explain the weird indignity of renting a vehicle. From a report: The present situation is "the most challenging in the history of car rental," says Chris Brown, the digital editor of the industry trade publication Auto Rental News. "Last year ... it was a disaster." Nobody could have planned for such a catastrophic revenue loss, he told me, and while the airline industry received a government bailout, the rental-car industry did not. "Hertz had 3,000 cars burned to the ground because someone lit a match, and they just burned in a field," he added. (Something like this did happen in Florida, though only around 1,000 of the 4,500 cars destroyed in the fire belonged to Hertz, and investigators blamed the episode on a hot exhaust pipe and dry grass.) Given the context, some negative customer experiences were to be expected, Brown argued. "But I think it's really impressive how car-rental [companies have] been able to pull themselves out of this very difficult time managing as well as they are."

Well, I'm not trying to be unfair to any companies, but many car-rental businesses did receive funds from the Paycheck Protection Program. And many of their negative customer experiences have nothing to do with a car shortage or a pandemic. Why is that car-rental employee typing for so long? We'll never know. Why are the printers so old and loud and broken? Who could say! Will you ever get a straight answer as to how much insurance to buy, or whether to prepay for gas, or why it's forbidden for you to drive this rental car out of the state of Florida? What does the pandemic have to do with Avis allegedly repossessing a rental car from someone's driveway in the middle of the night in Teaneck, New Jersey, and then allegedly claiming to know absolutely nothing about it, in one of the oddest stories I have ever read? And what does the pandemic have to do with the stream of complaints about rental-car companies on the Better Business Bureau website, a surprising number of which come from people who insist that they do not smoke yet they have been charged as much as $450 for allegedly smoking in a car?

I reached out with questions of this kind to the three largest rental-car companies, which control the large majority of the rental-car business in the United States. Enterprise Holdings did not respond. Avis Budget declined to comment about either the state of the industry or the alleged incident in Teaneck. A Hertz spokesperson said, in part, "Hertz is working closely with our automotive partners to add new vehicles to our fleet as quickly as possible amid the microchip shortage that continues to impact the car rental industry. We're also purchasing low-mileage, pre-owned vehicles, and moving vehicles to the areas with highest demand." The financial structure of these companies is as inscrutable as a contract printed on a dot-matrix printer and signed in a dim underground parking garage. Some of them have gone bankrupt; at least one has done so multiple times. Take Hertz for instance: Private-equity firms acquired the company from Ford in 2005, then made a profit of $1 billion with an IPO while the company itself remained deeply in debt. The company is also on its sixth CEO since 2014 and has been deemed a "Frankenstein of financial engineering" by Axios. Most of the cars that Hertz rents out are owned by "special-purpose" subsidiaries of Hertz, from which Hertz then leases them. When Hertz was sliding into bankruptcy in spring 2020, it was because the company had missed lease payments -- to put it crudely -- to itself. I can barely understand this, yet I will walk into a rental-car office and suffer for it.

RestOfWorld.org tells the story of a libertarian 'startup city' in Honduras that was "supposed to be a privatized, Silicon Valley-funded paradise."

Co-founded by 37-year-old Venezuelan Erick Brimen, "Próspera's founders promised to enrich the local community, even supplying water to a nearby village. But relations with neighboring communities deteriorated. Then, Próspera turned off the taps..."

Próspera's founders believe the future of government lies with privatized startup cities. They belong to a movement with deep roots in U.S. libertarian circles: one that wants to redefine citizenship and governance in tech-consumerist terms. It has gained momentum in recent years, as high-profile Silicon Valley figures, like PayPal co-founder Peter Thiel and venture capitalist Marc Andreessen, put their money behind startup city initiatives.

Some governments have been drawn to the idea, too, hoping it will attract foreign investment and spur economic growth. In 2013, Honduras passed a law allowing people like Brimen to set up semi-autonomous, privately run cities, "zonas de empleo y desarrollo económico" (zones for employment and economic development), or "ZEDEs" — pronounced "zeh-dehs." These cities are to be governed by private investors, who can write their own laws and regulations, design their own court systems, and operate their own police forces. The Honduran government granted Próspera ZEDE status in late 2017. Subject to limited government oversight and few legal restrictions, a set of for-profit firms incorporated abroad by Brimen and his business partners will govern the city — with ambitions to expand across [its Honduran island] Roatán and onto the Honduran mainland.... This year, skeptical Hondurans organized weeks of anti-ZEDE protests across the country. They fear cities like Próspera will leave ordinary people no better off than they were before, while ceding to profit-driven investors the power to decide what's in the public interest...

Applications for [Próspera] residency require a background check, a Honduran residency permit, and an annual fee — $260 per year for Hondurans and $1,300 for foreigners. Prospective residents will also have to sign something called an "agreement of coexistence," which lays out all the rights and responsibilities of Próspera residents and Próspera's obligations to them. Brimen characterized it as, "if you could make the social contract a real contract." The agreement incorporates Próspera's resident bill of rights, which is modeled on the U.S. Bill of Rights but with some decidedly libertarian twists. Government services will be centralized and automated through ePróspera, an online portal modeled on the much-praised e-Estonia system developed by the Baltic nation. From the comfort of their homes, Prósperans will be able to pay taxes, incorporate a company, transact business, and even buy real estate. They'll be able to vote, too, but their franchise is limited. Residents elect only five of the council's nine members. Landowners vote for two of the five, with voting power pegged to acreage. Buy more land, buy more votes. Próspera's founders choose the four remaining council members, and a six-member supermajority is needed to alter policy.... Government services will be provided entirely by a contractor...

Effective tax rates will sit in the low single digits, and, in place of Honduran courts, there's a private arbitration center. But where the business inducements enter unprecedented terrain is health and safety regulation. Próspera won't impose rules so much as curate prix fixe and à la carte menus of rules. Companies will be able to opt into an existing regulatory regime — choosing from dozens of countries and U.S. states — or they can Frankenstein together an entirely novel code, mixing and matching rules from different jurisdictions and even inventing new ones. [The building code for one new construction site is a pastiche of Honduran and U.S. law.] The lone requirements: sign-off by Próspera's governing council and a liability insurance policy, most likely underwritten, [Próspera co-founder] Delgado says, by offshore insurers.
RestOfWorld carefully chronicles how Próspera became unpopular with locals. In the summer of 2019, Próspera connected a nearby village to its own water supply. Then started billing them. (Though the water bills eventually stopped.) After protests over the fact that few construction jobs went to villagers — and how Próspera's armed security guards began asking pedestrians for identification — several local groups issued a critical statement while villagers elected a new council empowered to speak for them.

It all came to a head when the council asked Brimen to cancel a public meeting (due to surging Covid cases), which Brimen insisted was a violation of his free speech. He held the meeting anyways, local police were sent to break it up, and one of Brimen's bodyguards "scuffled" with one of the officers as his other bodyguards whisked him to safety. The incident made the local news and social media. Then the next month "Próspera Foundation" threatened to cut off the village's water within 30 days if they didn't formally request the foundation's intervention in writing.

The village instead appealed to a local congressman/mayoral candidate, who by mid-January had fully restored the village's water supply.

China kicked off a two-month campaign to crack down on commercial platforms and social media accounts that post finance-related information that's deemed harmful to its economy. From a report: The initiative will focus on rectifying violations including those that "maliciously" bad-mouth China's financial markets and falsely interpret domestic policies and economic data, the Cyberspace Administration of China said in a statement late Friday. Those who republish foreign media reports or commentaries that falsely interpret domestic financial topics "without taking a stance or making a judgment" will also be targeted, it added. The move is aimed at cultivating a "benign" online environment for public opinion that can facilitate "sustainable and healthy development" of China's economy and its society, according to the statement. It followed a draft proposal issued earlier Friday by the cyberspace regulator to regulate algorithms that technology firms use to recommend videos and other content. Commercial websites and platforms will be ordered to clean up financial information posts and shut accounts deemed in violation, under the supervision of authorities including the cyberspace administrator, the finance ministry, central bank as well as securities, banking and insurance regulators.

Uber called on the European Union to introduce a framework for gig economy workers, floating a model similar to that adopted by California after a contentious fight over the employment status of its drivers. From a report: The U.S. ride-hailing giant shared a "white paper" with EU competition chief Margrethe Vestager, jobs commissioner Nicolas Schmit and other officials. It urged policymakers to implement reforms that protect drivers and couriers operating through an app, without reclassifying them as employees. It's a thorny issue for Uber and other companies in the so-called gig economy that encourage temporary, flexible working models in favor of full-time employment. Last year, Uber, Lyft and other firms successfully fought against proposals in California which would have given their drivers the status of employees rather than independent contractors. Californian voters approved Proposition 22, a measure that would allow drivers for app-based transportation and delivery companies to be classified as independent contractors while still entitling them to new benefits like minimum earnings and vehicle insurance.

"We're calling on policymakers, other platforms and social representatives to move quickly to build a framework for flexible earning opportunities, with industry-wide standards that all platform companies must provide for independent workers," Uber CEO Dara Khosrowshahi said in a blog post Monday. "This could include introducing new laws such as the legislation recently enacted in California," he added. Uber said the EU could alternatively set new principles through a "European model of social dialogue" between platform workers, policy makers and industry representatives.

Krebs on Security: Companies victimized by ransomware and firms that facilitate negotiations with ransomware extortionists could face steep fines from the U.S. federal government if the crooks who profit from the attack are already under economic sanctions, the Treasury Department warned today. In its advisory, the Treasury's Office of Foreign Assets Control (OFAC) said "companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating OFAC regulations." As financial losses from cybercrime activity and ransomware attacks in particular have skyrocketed in recent years, the Treasury Department has imposed economic sanctions on several cybercriminals and cybercrime groups, effectively freezing all property and interests of these persons (subject to U.S. jurisdiction) and making it a crime to transact with them. A number of those sanctioned have been closely tied with ransomware and malware attacks, including the North Korean Lazarus Group; two Iranians thought to be tied to the SamSam ransomware attacks; Evgeniy Bogachev, the developer of Cryptolocker; and Evil Corp, a Russian cybercriminal syndicate that has used malware to extract more than $100 million from victim businesses.

The FBI has sent a private security alert to the US financial sector last week warning organizations about the increasing number of credential stuffing attacks that have targeted their networks and have led to breaches and considerable financial losses. From a report: Credential stuffing is a relatively new term in the cyber-security industry. [...] According to an FBI security advisory obtained by ZDNet today, credential stuffing attacks have increased in recent years and have now become a major problem for financial organizations. "Since 2017, the FBI has received numerous reports on credential stuffing attacks against US financial institutions, collectively detailing nearly 50,000 account compromises," the FBI said. "The victims included banks, financial services providers, insurance companies, and investment firms."

Ransomware incidents accounted for 41% of cyber insurance claims filed in the first half of 2020, according to a report published today by Coalition, one of the largest providers of cyber insurance services in North America. From a report: The high number of claims comes to confirm previous reports from multiple cyber-security firms that ransomware is one of today's most prevalent and destructive threats. "Ransomware doesn't discriminate by industry. We've seen an increase in ransom attacks across almost every industry we serve," Coalition added. "In the first half of 2020 alone, we observed a 260% increase in the frequency of ransomware attacks amongst our policyholders, with the average ransom demand increasing 47%," the company added. Among the most aggressive gangs, the cyber insurer listed Maze and DoppelPaymer, which have recently begun exfiltrating data from hacked networks, and threatening to release data on specialized leak sites, as part of double extortion schemes. Based on cyber insurance claims filed by customers who faced a ransomware attack in the first half of 2020, Coalition said the Maze ransomware gang was the most greedy, with the group requesting ransom demands six times larger than the overall average.

Before life can safely return to normalcy, we'll need an enormous increase in our ability to perform contact tracing -- identifying and contacting everyone who's been in contact with a person infected with COVID-19 so that they in turn can hunker down in quarantine and avoid infecting others. But, as Ars Technica reports, there are two huge problems with the massive contact-tracing platform that Google and Apple are working on. "First, billions of phones won't be able to use the tech," reports Ars. "And second: even among those who could, a solid half of Americans would refuse to because they don't trust insurers or tech companies with their health data." From the report: The 82 percent of US adults who have smartphones are exactly split on the issue, according to poll data released today by The Washington Post and University of Maryland. Half of the poll respondents said they probably or definitely would use a contact-tracing app, and the remaining half said they probably or definitely would not. While a majority of respondents (57 percent) expressed a reasonable amount of trust in public health agencies, less than half (47 percent) said they trust health insurance firms, and only 43 percent said they trust tech firms such as Google or Apple. Overall, the poll indicates that only 41 percent of American adults have both the technological capacity and the will to use a contact-tracing app. That's a problem, as research suggests that digital tracing would have to reach about 60 percent of the population to be most effective.

An anonymous reader quotes a report from the BBC: A leading research centre has called for new laws to restrict the use of emotion-detecting tech. The AI Now Institute says the field is "built on markedly shaky foundations." Despite this, systems are on sale to help vet job seekers, test criminal suspects for signs of deception, and set insurance prices. It wants such software to be banned from use in important decisions that affect people's lives and/or determine their access to opportunities. The US-based body has found support in the UK from the founder of a company developing its own emotional-response technologies -- but it cautioned that any restrictions would need to be nuanced enough not to hamper all work being done in the area.

AI Now refers to the technology by its formal name, affect recognition, in its annual report. It says the sector is undergoing a period of significant growth and could already be worth as much as $20 billion. "It claims to read, if you will, our inner-emotional states by interpreting the micro-expressions on our face, the tone of our voice or even the way that we walk," explained co-founder Prof Kate Crawford. "It's being used everywhere, from how do you hire the perfect employee through to assessing patient pain, through to tracking which students seem to be paying attention in class. "At the same time as these technologies are being rolled out, large numbers of studies are showing that there is... no substantial evidence that people have this consistent relationship between the emotion that you are feeling and the way that your face looks." "Prof Crawford suggested that part of the problem was that some firms were basing their software on the work of Paul Ekman, a psychologist who proposed in the 1960s that there were only six basic emotions expressed via facial emotions," reports the BBC. "But, she added, subsequent studies had demonstrated there was far greater variability, both in terms of the number of emotional states and the way that people expressed them."

AmiMoJo quotes a report from The Guardian: The number of insurers withdrawing cover for coal projects more than doubled this year and for the first time U.S. companies have taken action, leaving Lloyd's of London and Asian insurers as the "last resort" for fossil fuels, according to a new report. The report, which rates the world's 35 biggest insurers on their actions on fossil fuels, declares that coal -- the biggest single contributor to climate change -- "is on the way to becoming uninsurable" as most coal projects cannot be financed, built or operated without insurance.

Ten firms moved to restrict the insurance cover they offer to companies that build or operate coal power plants in 2019, taking the global total to 17, said the Unfriend Coal campaign, which includes 13 environmental groups such as Greenpeace, Client Earth and Urgewald, a German NGO. The report will be launched at an insurance and climate risk conference in London on Monday, as the UN climate summit gets underway in Madrid. The first insurers to exit coal policies were all European, but since March, two U.S. insurers -- Chubb and Axis Capital -- and the Australian firms QBE and Suncorp have pledged to stop or restrict insurance for coal projects. At least 35 insurers with combined assets of $8.9 trillion, equivalent to 37% of the insurance industry's global assets, have begun pulling out of coal investments. A year ago, 19 insurers holding more than $6 trillion in assets were divesting from fossil fuels.

Popular health websites are sharing private, personal medical data with big tech companies, according to an investigation by the Financial Times. From a report: The data, including medical diagnoses, symptoms, prescriptions, and menstrual and fertility information, are being sold to companies like Google, Amazon, Facebook, and Oracle and smaller data brokers and advertising technology firms, like Scorecard and OpenX. The FT analyzed 100 health websites, including WebMD, Healthline, health insurance group Bupa, and parenting site Babycentre, and found that 79% of them dropped cookies on visitors, allowing them to be tracked by third-party companies around the internet. This was done without consent, making the practice illegal under European Union regulations. By far the most common destination for the data was Google's advertising arm DoubleClick, which showed up in 78% of the sites the FT tested.