Tech Brew Ride Home - Tue. 09/11 - ICOs Now Officially Securities?

Episode Date: September 11, 2018

ICOs now officially securities, some steps backward in the self-driving car space, parsing the Zuckerberg New Yorker profile, and did Facebook disrespect the memory of Burt Reynolds?  Stories from: @eosnos Tweets: @ezraklein, @BrendanNyhan Links:US Judge Rules ICO Frauds Fall Under Securities Law (CoinDesk)Renesas in $6.7 billion deal for IDT to boost chips for self-driving cars (Reuters)GM's Plan to Test Autonomous Cars in New York City Seems to Have Gone up in Smoke (Jalopnik)How to prepare your iPhone for a trade-in program (The Verge)Can Mark Zuckerberg Fix Facebook Before It Breaks Democracy? (The New Yorker)Facebook Apologizes For Taking Down Your Horny Burt Reynolds Posts (Vulture) 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 Tuesday, September 11th, 2018. I'm Brian McCullough. Today, legal precedent is set in the crypto space, some interesting moves as well as some

steps backwards in the autonomous vehicle space, parsing the Zuckerberg New Yorker profile, and did Facebook disrespect the memory of Bert Reynolds? Here's what you missed today in the world of tech. In what is probably the first criminal case of its kind in the U.S., a federal judge has ruled that a pair of allegedly fraudulent initial coin offerings fall under U.S. securities laws, thereby allowing a criminal case to proceed to trial next year, and thereby, for the first time, setting some precedent that an initial coin offering is a security for the purposes of federal criminal law, at least. What's important about this is that ICOs and cryptocurrencies in general have all this time skirted around the issue of whether or not they are actual securities for the purposes of regulation, financing, liability, and now actual legal purposes, or if they were something else, something not quite defined. The case in question involves a pair of ICOs staged by a Brooklyn resident named Maxim Zeslovsky, who was accused of committing securities fraud by selling tokens which were supposed to represent shares in a Brooklyn resident. named Maxim Zezlowski, who was accused of committing securities fraud by selling tokens which were supposed to represent shares in a real estate venture and a diamond business.

Zzalafsky's lawyers argued that when it came to ICOs, quote, securities laws are unconstitutionally vague as applied, end quote. The judge in the case disagreed, ruling, quote, stripped of the 21st century jargon, including the defendant's own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds, end quote. Interesting angle here in the self-driving car horse race, Japan-based Rennesas, the second largest supplier of chips used in cars, has agreed to buy U.S.-based wireless chip maker integrated device technology for around $6.7 billion.

I was not aware, but apparently supplying silicon specifically for use in cars has up until this point been a pretty specialized segment, but obviously this niche is going to be completely upended with the rise of autonomous vehicles. Quoting from Reuters, René Soss is second only to NXP semiconductors in auto-related chips and commands 30% of the global market for microcontrollers used in cars. but it is weak in so-called analog chips which process signals from things such as sound, light, or temperature into data. In particular, RenéSAS has been keen to get its hands on IDT's know-how in analog semiconductors for wireless networks and sensors, expertise critical to develop autonomous driving and connected car technology, end quote. Last year, RenéSas purchased U.S. chipmaker InterSil Corp for $3.2 billion, also in aid of expanding into analog chips. This deal will need approval from CFUS, though, that committee on foreign investment in the

United States that has lately been scuppering tech-based buyouts by foreign companies, if the committee feels the technology in question is strategically vital to the interests of the United States. So as I've said before, I'm not a skeptic of self-driving cars in general. I'm sure we'll see them someday. but what I am healthily skeptical of is that we'll see them on real-world streets in some meaningful way by 2020, as everyone has been promising me for half a decade now. So in my self-imposed effort to keep a running scorecard on how close we're actually going to get to self-driving cars by 2020,

I did want to flag this jalapnik piece about how GM's plans to test autonomous cars on the streets of New York City has apparently quietly been shelved. Just last year to great fanfare, General Motors said it would start testing autonomous cars in Manhattan by early 2018. But the year is almost up, and there has been no official word on why the delay. What's up with that? According to Jalapnik, its red tape. It seems that GM Cruise, the self-driving subsidiary of the company, has not yet gotten

the required permitting. But even more curious, when Jalapnik-Fer, filed a public records request with New York's Department of Motor Vehicles to see what the holdup was. The response they got back was that the DMV said it had no records of any communications from GM or even attempts to secure the permits. Jolopnik reached out to GM to TechNYC, a tech advocacy group that has been very much behind testing autonomous vehicles in the city. And nobody's talking. Jalapnik speculates that the holdup and possibly the reason why no one wants to comment on this is the famous political and apparently personal animosity between our mayor, Bill de Blasio, and our governor, Mario Cuomo.

Cuomo has publicly come out in favor of testing driverless cars in Manhattan, and historically, anything Cuomo supports de Blasio hates and vice versa. So, again, this is a very important. maybe why I maintain my stance of measured skepticism. Even if you make the actual technology work at a level that's viable in the real world, which hasn't been proven yet, and even if you solve all the liability and legal and even moral issues and implications of autonomous robots on streets, which we haven't even begun to tackle in earnest, yeah, this is a major disruption to politics, to civics, to government, to bureaucracy. And all that stuff?

It can take years to unwind that. It's iPhone day tomorrow, of course, but hey, if you're going to trade in your old iPhone for a new one, it's time to get cracking on that in order to get the best deal possible. The Verge has a handy guide to all the steps you should take if you want to trade in your phone for fun and profit, but also securely. I've linked to the guide in the show notes, which explains how to back up your phone, how to completely wipe your data from the phone. Remember, turning off Find My Phone and the settings is key. And they also have a rundown of the various deals you can get from the various carriers.

Seemingly, in every device category, it turns out that you will always get the most money from Verizon. So if you're on Verizon, then, hey, lucky you. As I said yesterday, I didn't go with the New Yorker interview slash profile of Mark Zuckerberg for a segment on yesterday's show because it was late in the day. The piece is 15,000 words, so I didn't have time to read it. and also I wanted to see what the reaction was. Well, of course, I read it now, and the reaction overnight has been interesting, and I have to say you should definitely read it too. The link is, of course, in the show notes,

but the reason why I think this is probably the best profile of Zuckerberg that we've gotten in several years is because it takes a certain authorial position, which I think can best be summed up by this paragraph from the piece. Quote, Zuckerberg has spent nearly half his life inside a company of his own making, handpicking his lieutenants and sculpting his environment to suit him. Even Facebook's signature royal blue reflects his tastes. He is red, green, colorblind, and he chose blue because he sees it most vividly. Cheryl Sandberg, the chief operating officer, tells me,

sometimes Mark will say in front of the company, well, I've never worked anywhere else, but Cheryl tells me, she went on, he acknowledges he doesn't always have the most experience. He's only had the experience he's had, and being Mark Zuckerberg is pretty extraordinary, end quote. So the theme of a prince who has been brought up behind the sheltered walls of the castle, but now needs to go out into the real world and understand the real world in order to rule it is an old one in literature. Now, Mark Zuckerberg, of course, didn't inherit his kingdom, as the piece says. He built it with his own two hands, but this piece is very much about analyzing Mark Zuckerberg's attempts to break out of a bubble of reality of his own making and his seemingly genuine attempts to both acknowledge that state of affairs as well as possibly the impossibility of doing so.

And it's a really good piece, a piece that I think even if he has quibbles with it, even Mark would admit probably rings true, at least to outsiders looking in. Let me quote one more section. The caricature of Zuckerberg is that of an automaton with little regard for human dimensions of his work. The truth is something else. He decided long ago that no historical change is painless. Like Augustus, he is at peace with this trade-off. Between speech and truth, he chose speech.

Between speed and perfection, he chose speed. Between scale and safety, he chose scale. His life thus far has convinced him that he can solve problem after problem after problem, no matter the howling from the public it may cause. At a certain point, the habits of mind that served Zuckerberg well on his assent will start to work against him. To avoid further crises, he will have to embrace the fact that he's now a protector of the peace, not a disruptor of it. Facebook's colossal power of persuasion has delivered fortune, but also peril. Like it or not, Zuckerberg is a gatekeeper.

The era when Facebook could learn by doing and fix the mistakes later is over. The costs are too high and idealism is not a defense against negligence, end quote. I think the reactions to this piece have been in keeping with this tone of forced self-reflection and perhaps, we hope, self-discovery. Let's take a sampling of some of the reactions. They tend to focus on similar themes. For example, Ezra Klein tweeted, we need people who are absurdly optimistic. We need people who believe the impossible can be done. but the traits that make you able to do the impossible to charge forward, despite everyone telling you it's ridiculous, become dangerous once you succeed, end quote.

Brendan Nayan tweeted, the problem is too many tech types fail to differentiate between technical problems and social challenges that can't be engineered away. Bill Gates has moved up the learning curve on this, but most of his colleagues have not, end quote. Ben Thompson wrote in Strateree. My concern is not that Zuckerberg believes that Facebook is a force for good, rather than, I doubt he allows himself even to consider the possibility it might not be, end quote. A lot of people latched on to this part of the piece where the author Evan Osnose says, I found Zuckerberg straining not always coherently to grasp problems for which he was plainly unprepared, including the meaning of truth, the limits of free speech, and the origins of violence, end quote.

To which many people responded like Brandon Friedman did, tech folks often sneer at college. believing degrees are unnecessary. They wear a high school education as a badge of honor. The irony is that while the U.S. system certainly has flaws, what Zuckerberg struggles with most are things you learn from a well-rounded degree, end quote. Faruq Butt tweeted, the junior year philosophy, history, humanities, and ethics classes he never took might actually have been important for Zuck and the rest of us, end quote.

Laura C.A. merely tweeted Finnish college kids. And a lot of people riffed on this section of the piece where Zuckerberg admits to a personal fascination with the first Roman emperor, Augustus, as I quoted earlier, and how he created the Pax Romana, essentially several centuries of, now this is in quotes, world peace. And this is quoting from the piece.

What are the tradeoffs in that, Zuckerberg said, growing animated. On the one hand, world peace is a long-term goal that people talk about today. 200 years feels unattainable. On the other hand, he said, that didn't come for free and he had to do certain things, end quote. Yeah, so, Zuck, if you're listening

not to pile on, because I'm not sure that all of that criticism about not finishing college is even fair, but you really did open the door to them without Augustus thing. If you really have studied all of this history, then you would know one man's peace and order, again in quotes, is another man's brutal oppression and political stagnation.

You would also know from your reading that it was not 200 years of peace, even in most of the empire, but constant warfare just to hold the perimeter and the edges. Also, in a piece that's examining what's inside the head of a man who most of us believe is an unelected emperor who basically runs a quasi-nation state with little external oversight, you really got to see what a bad look that is to who seemingly be fascinated with the Roman emperors, at least from a PR perspective. Of the, you know, depending on how you count them 70 or so Roman emperors,

there were really only like four who were legitimately decent and good leaders, as we would think of the term today. The vast majority were literal psychopaths, and either they were psychopaths before they became emperor or the very nature of their unchecked power. of literally being a god on earth, turn them into psychopaths. Very few died peacefully in their beds.

Most were assassinated by their soldiers or their wives or their slaves. I know that's just one quote, and I'm sure you could go into much more detail and depth than that, but it really came off as a, I just watched the movie Gladiator level of understanding what the Roman Empire actually was. And again, that's just not a good look.

Came off as naive. If you really haven't read as much as you claim, at least start with the book SPQR by the true queen, Mary Beard. Let me finish by summing up with Casey Newton from his overnight newsletter. Quote, there was a time when seeing new interviews with Zuckerberg made me feel jealous. But increasingly, I see the limits of asking tech CEOs questions about their work. A profile of Zuckerberg or Jack Dorsey or Evan Spiegel always seems to be circling around the question, is this person basically a good guy?

I suspect that's one reason they sit for. profiles like this. They are basically good guys and a magazine writer who visits them at their homes will see this and report back to the world at large, end quote. Casey goes on to say that he no longer functionally sees the use in profiles like these. Don't just profess to us that you're human and you care in profiles like these. Let us see your humanity and your thoughtfulness and your introspection in your actions in how you run your companies. He's speaking to all of the operators of these social platforms, quote, maybe tech platforms can be fixed, or maybe they can't, but either way, it's not an oral exam, and we ought not to treat it like one, end quote. Finally today, another story where

Facebook overreached in its censorship of public discourse, although I'm saying that very much tongue in cheek. Let me quote from a piece in vulture. The death of Bert Reynolds this week sparked remembrances of the man as a talented actor, a charismatic celebrity, and of course, an enduring Hollywood sex symbol, a status perhaps best exemplified by his iconic 1972 cosmopolitan photo shoot. However, if you personally offered an homage to the actor with images of the spread, which depicts Reynolds' tastefully nude, save for a well-placed forearm, you may have found your post removed by Facebook, end quote. Well, Facebook, of course, has a no-nudity policy, but if it did take down your beefcake, Bert Reynolds, centerfold, it wants you to know it's sorry.

And a statement released Friday the company said, it does not break our standards and apologize for any inconvenience this may have caused, end quote. If you've never seen the centerfold in question, do look it up. There's no way it could possibly violate anyone's standards of decency or good taste. Reynolds is reclined, odalesque style on a bearskin rug in all his hair suit manly glory. Viacone Dios, bow bandit Darville. So quick programming note, everybody, tomorrow's show is probably going to drop at least an hour late. Possibly more than that, but we're going to aim for 6 p.m. Eastern. It's a simple matter of logistics.

If past his prologue, the Apple event won't wind up until about 3 p.m. Eastern time and 3 p.m. is usually my drop dead time to at least begin recording the show. I actually started this recording at 307 p.m. And I'm really going to have to hustle to get everything edited in time for five. So tomorrow we'll need some time to at least round up and process what happened at the Apple event before we can write it up into something halfway coherent. Tomorrow we'll mostly be able to talk about what was announced. We'll do the analysis if necessary on Thursday.

And as I said, Chris Higgins will be helping me out, so hopefully we'll post by at least 6 p.m. Eastern. Maybe a little later if things go south on us. Wish us luck. Talk to you tomorrow.