Tech Brew Ride Home - Thu. 03/03 – Epic Buys Bandcamp; Amazon Retrenches From Physical Retail

Episode Date: March 3, 2022

The story of the young Ukrainian Minister who has bent the conscience of western tech companies, and coordinated the reachout to crypto. Is regulation coming for NFTs? Epic Games acquired Bandcamp. Amazon pulls back from its IRL retail experiments. And a big update on the return to the office watch. Links: Ukraine cancels crypto airdrop, plans to sell NFTs instead (The Block) The Ukrainian leader who is pushing Silicon Valley to stand up to Russia (Washington Post) Crypto Powerhouse ConsenSys Faces Action by Former Employees (Bloomberg) SEC Scrutinizes NFT Market Over Illegal Crypto Token Offerings (Bloomberg) Epic Games Acquires Bandcamp as ‘Fortnite’ Maker Expands Into Music (Variety) Amazon is shutting 68 retail stores, ending Amazon Books, 4-star and Pop Up shops (CNBC) Apple Event Announced for March 8: 'Peek Performance' (MacRumors) Google tells employees in Bay Area and other U.S. locations to return to offices in April (CNBC) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Thursday, March 3rd, 22. I'm Brian McCullough today. The story of the young Ukrainian minister who has bent the conscience of Western tech companies while also coordinating the reach out to crypto is regulation coming for NFTs. Epic Games acquires Ban Camp. Amazon pulls back from its IRL retail experiments and a big update on the return to the office watch. Here's what you miss today in the world of tech. According to an elliptic report, Ukraine has thus far received over $50 million in crypto donations across more than 89,000 assets since February 26th.

Blockchain data shows around $10 million in BTC and $16 million in ETH donations have rolled in. However, Ukraine's Mikhailo Fedorov abruptly canceled a planned cryptoirdrop saying that Ukraine will sell NFTs to raise funds instead. Quoting the block. Scammers had earlier appeared to target Ukraine's fundraising attempts by issuing a fake token designed to look official. New sites reported that this token was official and it gathered significant trading volume on decentralized exchanges. Yet there were multiple red flags that showed it was likely fake, including the way the token was made to look like it was issued from Ukraine's public Ethereum address when it was instead issued by a third party.

While the airdrop is no longer happening, it was a successful marketing tool in gaining further donations. After the AirDrop was announced donations to Ukraine ramped up in anticipation of a future token, with millions of dollars flowing into its coffers. Yet while those later donors won't be getting the anticipated token, at least they can say they've now been rugged by a sovereign state. Quote, after careful consideration, we decided to cancel Airdrop. Mikhailof Federov, Ukraine's minister for digital transformation posted from his verified Twitter account today. Instead, we will announce NFTs to support Ukrainian armed forces soon. We do not have any plans to issue any fungible tokens, end quote. By the by, if you want to know more about this Mikhailo Fedorov, Ukraine's youngest cabinet

minister and vice prime minister who has been using his Twitter account to pressure tech giants to shut down Russian propaganda and, you know, engage the crypto community. You're in luck because I've got a profile for you linked in the show notes, quoting the Washington Post. Fedorov, Ukraine's youngest minister at age 31, has mastered the art of the online callout, even using it to enlist the help of the tech industry's most controversial tweeter, Elon Musk. In the months before the invasion, Fedorov's team was unable to get a meeting with Musk, according to Bornyakov. Before Russian troops invaded his homeland, Fedorov was leading a roughly 250-person ministry with the goal of connecting more Ukrainians to the Internet,

digitizing passports and bringing high-tech jobs and companies to the country. He'd gotten the job after helping Vladimir Zelensky, the president of Ukraine, win a landslide victory in the 2019 election. The first time I heard of Fedorov was when Zelensky was doing his digital campaign in Ukraine. He managed the campaign and basically it was so successful it made him president, said Denny's Garak, a Ukrainian American tech entrepreneur who has been helping the Ukrainian government connect with U.S. tech companies over the past week. Federov's pre-invasion work as a minister was a success, too, helping put in place online tools. for coronavirus vaccine passports, Garak said, end quote. I think we can just do a summary

of the rest of this category of news today. SAP has announced it will be, quote, stopping business in Russia aligned with sanctions, end quote, and pausing sales of products and services in Russia following a request from Fedorov. Oracle says it has, quote, already suspended all operations in Russia

following a request from also Fedorov. Spotify is closing its offices in Russia indefinitely and removing all content from RT and Sputnik in the EU and other markets except for Russia. A group of 35 former employees at Crypto Startup Incubator Consensus are alleging, quote, serious irregularities, end quote, in Swiss court over an asset transfer and demanding an audit, quoting Bloomberg. Claiming to represent 35 employees, the group filed for a Swiss court to conduct a special

audit to look at an asset transfer out of consensus AG into a new entity that the group claims, quote, was to the detriment of minority shareholders, end quote. Founded by Ethereum co-creator Joseph Lubin, Consensus countered that the property transfer was valued fairly and that the business environment has changed dramatically since the spinout in mid-2020, so the assets later ended up having a higher valuation. Since then, Ethereum went on a bull run reaching an all-time high in early November. Consensus mesh, the property in question, focuses on incubation and startup investments and has a portfolio of more than 150 companies, according to its website. It also manages a portfolio of equity and tokens and does its own research and development, end quote.

And listen up, crypto folks. Sources are telling Bloomberg that the SEC is probing the NFT market to determine if tokens are, in fact, securities, and focusing on fractional NFTs in which a token is broken into units for later sale. A focus of the probe is on whether certain non-fungible tokens, digital assets that can be used to denote ownership of things like a painting or sports, memorabilia are being utilized to raise money like traditional securities, said the people. Over the past several months, attorneys in the SEC's enforcement unit have sent subpoenas demanding information about the token offerings. As part of its review, the SEC is seeking

information on so-called fractional NFTs, which involve breaking down the assets into units that can easily be bought and sold, said the people who asked not to be named as the probe hasn't been disclosed publicly. About $44 billion worth of crypto was sent to smart contracts on the Ethereum blockchain tied to NFTs during 2021, up from a mere $106 million the year before, according to data from chain analysis. As the market has boomed, some NFT marketplaces have taken steps to remove projects that might put them in regulators' crosshairs, such as those that offer royalties or that involve raising funds for a business. A key legal question is whether digital assets, including NFTs, are securities, and therefore subject to the same rules as stocks.

While the SEC has said that many tokens fall under its purview, some crypto enthusiasts argue regulations meant to police the equity markets shouldn't also apply to virtual currencies, end quote. Now, as ever with crypto, I don't particularly have deep insights into this, but I will share with you something a really smart person told me about NFTs a while ago. This person said it is far more likely that burdensome regulation will come down on NFTs, rather than the broader crypto markets, at least in the near term, for the simple reason that regulators look at crypto, again broadly crypto, and are intrigued. They see digital and possibly blockchains as the future of money, and so they want to learn what they can. They believe that markets,

in this case, are a viable experimental lab environment that will allow useful innovation to rise to the fore, so they are somewhat reticent to be heavy-handed with regulation. But this person told me, regulators see NFTs as, well, basically bobbles. Pure speculation. Whether or not this is true, I cannot say, but I was reminded of that conversation by this tweet from Dar Abbasanjo. The SEC is investigating whether certain non-fungible tokens are being utilized to raise money like traditional securities. L.O.L. That's the point of utility tokens and governance tokens like looks and lens. Hard to see the SEC saying they're not actually securities, end quote. Epic Games has acquired Bandcamp, which will continue operating as a standalone marketplace and music community.

Bandcamp has paid nearly $1 billion to artists and labels over the course of its lifetime, quoting variety. Bandcamp will play an, quote, important role in Epic's vision to build out a creator marketplace ecosystem for content, technology, games, art, music, and more, the games company said. According to Bandcamp, under its revenue model, artists receive net an average of 82% of, of every sale. Under Epic Games's ownership, Bandcamp will operate as a standalone marketplace and music community, and it will continue to be led by CEO and co-founder Ethan Diamond. We share a vision of building the most open, artist-friendly ecosystem in the world, and together we'll be able to create even more opportunities for artists to be compensated fairly for their work. Diamond wrote in a blog post announcing the Bandcamp sale. Bandcamp is working with Epic to expand internationally and to build

on other fronts, including its album pages, mobile apps, merchandise tools, payment system, and search and discovery features according to Diamond. Epic and Bandcamp are also working together on newer initiatives, like Band Camp's vinyl pressing and live streaming services, end quote. Yes, newer initiatives. Does anyone else get the idea that this could be a move to get into NFTs on Epic's part? As Will Aramis joked on Twitter, I guess they'll need music in the Metaverse, right?

Amazon has announced plans to close 68 brick-and-mortar retail locations across the U.S. and the U.K., including all of its Amazon books, four-star, and pop-up stores. So retrenchment on the physical retail experiments, huh? Does this maybe relate to that story from last week about Amazon struggles and groceries? Quoting CNBC, the closures affect 68 stores across the U.S. and U.S., and U.S., Amazon said. Closure dates will vary by location, and Amazon said it would help affected employees find roles elsewhere in the company. Workers who opt not to stay will be offered severance package. it said. Amazon has gradually launched an array of brick-and-mortar concepts from supermarkets to retail stores offering branded electronics like fire tablets and echo smart speakers. The four-star

stores, in particular, attempted to mesh Amazon's in-store and offline operations by featuring top-selling products in its web store. But sales growth of the physical stores unit has noticeably lagged the company's overall retail business. Physical stores, which include Whole Foods and Fresh outlets, reported lower sales in 2021 than 2018. Amazon is trimming its physical retail footprint after coming off its slowest growth rate for any quarter since 2001. Shares are down more than 8% so far this year, and the stock was the worst performer in the big tech group last year, end quote. And look, it's impossible not to wonder if maybe Jeff Bezos stepping down from a day-to-day role at Amazon might also be a factor here as well. Is Andy Jassy just not that into experiments like these?

By the way, I'd be remiss if I didn't tell you to mark your calendars, because Apple has indeed announced a digital-only event dubbed peak performance, spelled P-E-E-E-K performance, to be held on March 8th at 10am p.T, which is 1 p.m. Eastern Time, so this coming up Tuesday, Mac Rumors reminds us of what we can expect from this event, quote, Apple is expected to announce the next-generation version of the iPhone SE, a revamped iPad Air, and at least one Mac with an Apple Silicon chip, which could be the Mac Mini, the 13-inch MacBook Pro, or both. The third-generation iPhone SE will look similar to the second-generation model available now, and no design changes are expected. It will continue to feature thick bezels and a touch ID home button, but it will include an updated A-series chip like the A-15 and faster 5G connectivity.

Apple analyst Ming Chi-Quo has said it will be Apple's most affordable 5G iPhone. Apple isn't going to make any design changes to the next-generation iPad Air either, but it too will get a faster chip and 5G connectivity. It could also be updated with a new FaceTime camera that supports center stage, the feature that keeps you in frame even as you move around the room. As for Macs, Apple is rumored to be planning to release a higher-end version of the Mac Mini with an overhauled design and M1 Pro and M1 Max chips. The new Mac Mini will replace the current Intel Mac Mini options,

and it could come at Apple's March event. The final device rumored for March 8th is an updated version of the 13-inch MacBook Pro, which is said to be equipped with an M2 chip, the successor to the M1 chip. The MacBook Pro will look identical to the current 13-inch model, and it will be a lower-end version of the 14-and-16-inch MacBook Pro models that have M1 Pro and M-1 Max chips. The M-2 chip will feature the same 8-core CPU as the M-1, but speed and efficiency improvements are expected as are GPU improvements.

Rumors suggest the M-2 chip will be available in 9. and 10 core GPU options up from the 7 and 8 core GPU options available with the original M1 chip, end quote. Finally today, from the return to the office watch, Google has apparently told staff in the Bay Area and other U.S. locations to return to physical offices three days a week starting on April 4th in a shift to a hybrid work model, quoting CNBC. It's been a long and challenging two years since the vast majority of our people started working from home, wrote John Casey, Google's Vice President of Global Benefits in an email to employees that was viewed by CNBC. But the advances in prevention and treatment, the steady decline in cases that we continue to

see, and the improved safety measures we have implemented across our Bay Area sites now mean we can officially begin the transition to the hybrid work week, end quote. Casey said other offices in the U.S. and elsewhere will begin to return based on local conditions. Google said it expects most workers to come into the office three days a week and have two days of remote work. The note from Casey included previously reported guidance such as dropping the mask mandate and testing mandates for fully vaccinated employees, as well as the reopening of amenities such as cafes, restaurants, massages, and shuttles. Employees entering physical work spaces must still either be fully vaccinated or have an approved accommodation. Casey wrote that the company will be testing new ways of working and

will, quote, gather insights, data and feedback along the way. During March, the company plans to, quote, help folks transition to their new routines and aim to be fully functional in our hybrid working approach, he wrote. The benefits team is piloting 15-minute virtual drop-in meetings with trained counselors to help with the return. Nearly 14,000 of the company's 156,500 full-time employees around the world have transferred to a new location or moved to fully remote work, and 85% of total applications have been approved, Casey said. Employees who need more time before returning can request a work-from-home extension, he added. Google employees can work from the office more if they choose and some roles may need to be on site more than three days a week, quote, due to the

nature of their work, he wrote, end quote. I would expect a lot of major tech companies to announce at least similar timelines now that Google has taken this lead, though remote work regimens might vary from company to company quite significantly. Nothing for you today. Got a super busy afternoon. Talk to you tomorrow.