At a glance.
- Challenges of regulating meme trading.
- US Treasury Department's efforts to keep up with financial cybercrime.
- US Congress continues its scrutiny of Big Tech (and of Facebook in particular).
SEC reflects on GameStop stock frenzy.
The US Securities and Exchange Commission (SEC) has released a report on the recent meme stock rally that caused an unprecedented rise in the stock prices for retailer GameStop. Vice explains, the SEC has dismissed many of the community’s theories regarding the cause of the incident. The report doesn’t buy into the idea that trading apps like Robinhood colluded to stop the rally, and though some surmised the incident was a means of protesting against Wall Street and damaging the domination of hedge funds, the report notes that many traditional traders actually profited from the rally. Furthermore, the SEC debunks the notion that a short squeeze or even a gamma squeeze impacted the events. “Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by belief in the fundamentals of Gamestop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock," the SEC states.
Treasury Department evolves to keep up with financial cybercrime.
The US Treasury Department has issued a report stating that the economic sanctioning framework needs to be revamped to keep pace with the changing landscape of digital currency. As the Wall Street Journal explains, the administration announced plans to pull back on economic sanctions, stating that overuse could weaken their impact. As AP News notes, the report highlights how the US dollar is being replaced by cryptocurrencieS as the world’s reserve currency, allowing threat actors to carry out illicit financial transactions undetected. “Technical innovations such as digital currencies, alternative payment platforms and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions. These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system,” the report explains. Meanwhile, the Wall Street Journal reports, Deputy Treasury Secretary Wally Adeyemo has requested additional funding and staff to support the financial intelligence and sanctions units of the Department in their fight against cybercriminals’ constantly evolving tactics. “One of the most important areas for us, frankly, is ensuring that we have a workforce that understands these issues going forward,” Adeyemo stated.
Facebook Files fuel US Congress legislation.
A bipartisan group of US senators including Democrat Amy Klobuchar and Republican Chuck Grassley are pushing for legislation to prevent “self-preferencing,” a tactic used by tech giants to push their own products and minimize competition. The Wall Street Journal reports that the move is motivated by the recent revelations from a Facebook whistleblower who shed light on the platform’s algorithmic engagement maximization. Also fueled by the Facebook informant’s disclosures, the House Energy and Commerce Committee is proposing legislation to prevent social media platforms from posting content that could be harmful to younger users. An update to the 1998 Children’s Online Privacy Protection Act has gained the support of bipartisan lawmakers as well as children’s advocacy groups. The modification would forbid platforms from collecting the personal data of minors aged thirteen to fifteen without the user’s consent.