At a glance…

• Accenture and Nvidia partnered to advance agentic AI
• The US presidential election shook up the tech sector
• Vodafone and Three merger created UK telco buzz

October: Big Movements in Big Tech

Google invested $1 billion into data centre regions in Thailand

Data centre and cloud investments continued to surge in the last quarter of the year, as Alphabet’s Google announced a $1 billion investment towards building data centre regions in Thailand.

The goal was to support AI adoption in Southeast Asia — as Deloitte forecasted, the investment would create an average of 14,000 jobs annually by 2029.

Accenture and Nvidia expanded their partnership to scale agentic AI adoption

In terms of Gen AI, there’s a new kid on the block. Agentic AI has seen a steady rise in search results, particularly in the last quarter of this year.

This may be linked to companies such as Accenture and Nvidia announcing joint plans to accelerate agentic AI adoption (as well as Honeywell and Google Cloud).

Unlike traditional AI that merely responds to prompts, agentic AI autonomously creates workflows and acts based on user intent.

See worldwide search results for ‘agentic AI’ below.

OpenAI closed a $6.6 billion investment round

OpenAI secured a groundbreaking $6.6bn in its latest funding round, hailed as the “largest venture capital deal of all time.”

The fundraising valued the creator of ChatGPT at $157bn following its announcement of plans to transition to a for-profit structure within the next two years.

Notable investors included Microsoft, Nvidia, SoftBank, Fidelity, Altimeter Capital, Khosla Ventures, MGX, and Thrive Capital.

Microsoft accused Google of a campaign to mislead the public and cloud regulators

In a Big Tech spat, Microsoft claimed Google initiated a covert campaign to “discredit” Microsoft and “tilt the regulatory landscape in favour of its cloud services.”

In a blog by Microsoft’s deputy general counsel, Rima Alaily, he stated that Google was about to launch a lobby group with a handful of smaller European cloud providers.

Alaily claimed that Google planned to remain a “backseat member” and allow the other cloud providers to be the group’s face. Still, one firm that chose not to join told Microsoft that the group’s purpose was to criticise Microsoft’s practices in Europe.

UK tech provided mixed reactions to the new government’s first budget

The UK’s new Labour government released its first budget statement, which included increased taxes for employers, an uptick in public spending, and a renewed commitment to focus on growth.

November: US Presidential Election Shakes Tech Sector

Trump vs Harris: key tech policies in the US presidential election

As the US presidential election approached, TI covered the key tech policies proposed by the Republican and Democratic parties.

These included AI and automation plans, such as Trump’s push to minimise AI regulation and Harris’s focus on promoting ethical AI use.

Both parties emphasised strengthening cybersecurity and taking antitrust actions against monopolistic companies.

However, they differed on cryptocurrency: Trump advocated for limited regulation to position the US as a crypto hub, while Harris supported stronger regulation to secure crypto markets and protect consumers.

What does Big Tech stand to gain or lose under a second Trump presidency?

Trump won the US presidential election, and TI analysed the pros and cons of a Republican party for Big Tech.

For instance, Trump threatened to impose 60-100% tariffs on goods from China, which could heavily affect companies such as Apple and Tesla. These companies depend heavily on continued access to the Chinese market and supply chains.

On the other hand, lighter regulation may benefit sectors such as crypto.

Air fryers may be secretly sizzling data

When you threw those sweet potato fries into the air fryer drawer, did you consider that your data may have been stolen in the process?

Consumer rights watchdog Which? warned shoppers that air fryers and other electronic products made in China may collect unnecessary data and share it with third parties.

According to Which? the Xiamoi app, which comes with smart air fryers like Xiaomoi, Cosori, and Aigostar, was linked to ad trackers on platforms such as Facebook and Tencent.

It also requested gender and date of birth when users set up an account, which it reportedly shared with servers in China.

Coca-Cola’s AI-generated ‘Holidays are coming’ ad sparked debate

Coca-Cola’s annual fleet of trucks appeared on our screens — except this time, the entire ad was AI-generated.

The ad sparked controversy online, with one X user calling it “soulless garbage.” It was produced by three AI studios, using generative AI models Leonardo, Luma, Runway, and Kling.

Two subsea cables were severed in the Baltic Sea

Two subsea cables connecting Germany with Finland and Lithuania with Sweden were severed over the course of one weekend.

While the cause remained unknown, Finnish state-controlled cybersecurity and telecoms company Cinia stated such an event does not happen “without an outside impact.”

Neither of the incidents affected internet traffic, as other subsea cable routes were available.

December: The Law Denies Big Tech’s Appeals

A US judge rejected Elon Musk’s Tesla pay package

Elon Musk’s four-year-old child (X Æ A-12) may not get so many presents this Christmas, as a Delaware judge upheld her decision to void his $56bn Tesla pay package.

The judge ruled that the car manufacturer’s board of directors failed to act in the best interests of shareholders when devising Musk’s 2018 compensation deal. She cited conflicts of interest and material misstatements made to investors.

ABBA’s Björn Ulvaeus warned of AI in the music industry

A study by the International Confederation of Societies of Authors and Composers (CISAC) found that human creators are “set to lose billions” due to GenAI.

Abba’s co-founder and president of CISAC, Björn Ulvaeus, responded to the report by warning that poorly regulated AI has “the power to cause great damage to human creators, to their careers and livelihoods.”

The CMA approved the £16.5bn Vodafone and Three deal and set terms for UK telecom’s future

The British telecoms sector saw a significant milestone as the UK Competition and Markets Authority approved the merger of Vodafone and Three, paving the way for a £16.5bn ($21bn) alliance.

The deal required several legal obligations, including a commitment to spend £11bn ($14bn) improving 5G connectivity services nationwide. (London is rated one of the worst capital cities in Europe for 5G connectivity). The deal brings together the UK’s fourth and third biggest operators.

A federal court upheld a ruling on TikTok forcing it to sell or face a US ban by 2025

A federal appeals court supported its decision requiring TikTok’s Chinese partner company, ByteDance, to sell its US operations or face a nationwide ban. It has until 19 January 2025 to comply with the ruling. If it fails, the app could be disabled for 170 million American users.

However, TikTok has vowed to appeal the decision to the Supreme Court, arguing that the law infringes on free speech rights and unfairly singles out the platform.

Google unveiled a quantum chip

Finally, as a holiday gift, Google unveiled its quantum chip, Willow. It said that the chip could perform a standard computation in under five minutes, which would take today’s fastest supercomputer an inconceivable amount of time (ten septillion years).

Google Quantum AI’s founder and lead, Hartmut Neven, added that the new chip moves the firm “significantly” toward commercially relevant applications.

Missed the rest of the year? Read our roundups of Q1, Q2, and Q3 to catch up.

The post Q4 Wrapped Up: the top tech stories of October to December 2024 appeared first on TechInformed.

The Italian carmaker explained in a statement that this move will better address the “evolving needs of its clients.”

Ferrari has said that it will begin accepting crypto transactions in other countries where crypto is currently legal tender by the end of 2024, after launching in the US last year.

“Ferrari is leveraging the expertise of various companies active in the cryptocurrency payment sector to ensure transaction security,” the Italian carmaker said in its statement.

“These solutions will facilitate dealers in accepting payments without the need to manage cryptocurrencies directly, as these will be converted immediately into traditional currency.”

In the US, Ferrari uses the crypto payment platform ‘Bitpay’, which performs this conversion.

Ferrari said that this approach allows it to verify the source of funds and protect transactions from price fluctuations related to exchange rates.

The high energy usage of cryptocurrencies has deterred other car manufacturers, such as Tesla, from accepting them as a form of payment – although it now accepts the cryptocurrency ‘Dogecoin’ for merchandise purchases.

In 2021, Tesla began accepting Bitcoin before its CEO, Elon Musk, halted it citing “environmental concerns.”

When Ferrari first accepted crypto payments in the US last year, its chief marketing and commercial officer, Enrico Galliera, told Reuters that cryptocurrency providers have made efforts to reduce their carbon footprint.

“Our target to reach for carbon neutrality by 2030 along our whole value chain is absolutely confirmed,” he said in an interview.

Galliera added that the decision came in acknowledgement that many of its clients have invested in crypto.

“Some are young investors who have built their fortunes around cryptocurrencies,” he said. “Others are more traditional investors who want to diversify their portfolios.”

The post Ferrari to accept crypto payments in Europe appeared first on TechInformed.

The amount is double that of the first half of 2023 when $657 million was stolen in crypto.

As in 2023, the first half of this year was dominated by a small number of costly attacks, with the top five hacks and exploits accounting for 70% of the total amount stolen.

In May, Japanese cryptocurrency DMM Bitcoin suffered the largest attack of 2024, resulting in the theft of over 4,500 BTC, which was valued at over $300 million at the time.

While the cause of this attack is unknown, like many victims in the last six months, it is speculated that a stolen private key or address poisoning may be the cause.

Hacks and exploits in 2024 are a third below the same period in the record year of 2022.

TRM Labs said in its report: “Crypto projects can protect themselves from hacks and exploits by implementing a multi-layered defence strategy, such as regular security audits, robust encryption, multi-signature wallets, and secure coding practices.”

The firm advised crypto wallet owners to stay up to date on the latest threats, educate employees, and have a comprehensive incident response strategy.

Read more: Navigating the line between crypto surveillance and privacy protection

The post Crypto hackers have already stolen almost $1.4 billion this year appeared first on TechInformed.

Tesla boss Elon Musk has criticised Joe Biden’s decision to quadruple tariffs on electric vehicles imported from China, despite previously calling for trade barriers himself.

The multi-billionaire said via video link, “Neither Tesla nor I asked for these tariffs,” at a technology conference in Paris.

Last week, the White House said new measures, including a 100% tariff on EVs from China, were a response to unfair policies and intended to protect US jobs.

Musk has previously warned that Chinese car makers could “demolish” competitors unless governments imposed trade barriers. However, at the conference on Thursday, the Tesla chief expressed surprise at the move, adding: “Things that inhibit freedom of exchange or distort the market are not good.”

Read more…

FTX exec jailed for 90 months

Ryan Salame, the former right-hand man of jailed FTX founder Sam Bankman-Fried, has been sentenced to 90 months in prison, US federal prosecutors said.

Salame, who had served as co-CEO of FTX’s Bahamian subsidiary, pleaded guilty in September last year to violating political campaign finance laws and operating an illegal money-transmitting business.

“Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system,” Damian Williams, US Attorney for the Southern District of New York, said in a statement.

It follows Bankman-Fried’s 25-year conviction for stealing $8bn (£6.3bn) from FTX customers, which was revealed when the crypto exchange collapsed in 2022.

Read more…

PwC becomes first ChatGPT reseller

PwC has signed a deal with OpenAI to offer its ChatGPT Enterprise licences to its business partners.

OpenAI has not previously offered Enterprise licences through a third party, and the agreement means PwC can also upsell its portfolio of services to those who want to use ChatGPT to optimise their workloads.

Not only does the management consulting giant become OpenAI’s first reseller partner, but it will also become the tech firm’s biggest customer to date, covering 100,000 users.

Read more…

Former OpenAI board member sheds light on Altman firing

A former board member of OpenAI has defended the ChatGPT firm’s shock decision to sack founder Sam Altman last year, accusing the CEO of “outright lying to the board.”

OpenAI quickly reversed its November decision to remove Altman following an outcry from inside and outside the organisation, but according to former board member Helen Toner, the directors had not taken the initial decision lightly. They claimed the founder had lied to, obstructed, and retaliated against those who criticised him, creating “a toxic atmosphere.”

“The [OpenAI] board is a nonprofit board that was set up explicitly for the purpose of making sure that the company’s public good mission was primary — was coming first over profits, investor interests, and other things,” Toner said to The TED AI Show host Bilawal Sidhu.

“But for years, Sam had made it really difficult for the board to actually do that job by, you know, withholding information, misrepresenting things that were happening at the company, in some cases outright lying to the board.”

When Altman returned to the company just days after his sacking, he brought with him an entirely new board of directors.

Read more…

The post FTX exec jailed and PwC named first ChatGPT reseller appeared first on TechInformed.

Reasons to invest and use the digital currency are varied, some believe its value will stay with inflation, others appreciate the minimal extra cost when transferring money abroad. The fact that it’s decentralised also offers privacy, control, and security compared to fiat money.

While fiat (cash) transactions are shared with the bank, which is often backed by a recognised government entity, cryptocurrencies are less traceable and not as easily accessed by third parties.

The reason for this is to secure an individual’s transactions and ensure autonomy over their finances.

Businesses using these services benefit by keeping their transactions confidential, shielding the details from competitors, and assuring consumers that their transactions are protected from any leaks or breaches.

As Peter Wood, chief technical officer at Web3 recruitment agency, Spectrum Search explains: “Privacy in cryptocurrencies is fundamentally about protecting individual autonomy and security a private sphere of economic activity from unwarranted observation and interference.”

Wood believes that the privacy crypto offers is crucial – not just for personal privacy but also as a defense against potential governmental overreach and financial surveillance, particularly in regions where personal assets are at risk from arbitrary governmental actions.

This may be a reason cybercurrencies remain banned in countries including China, Qatar, and Saudi Arabia. Russia is making efforts to ban cryptocurrencies, too.

Controversially, the US Department of Justice (DOJ) recently arrested and charged two founders of Bitcoin privacy wallet Samouri Wallet with conspiracy to money laundering and conspiracy to operate an unlicensed money service business.

Private wallets hold cryptocurrencies and are solely accessible to those who have the digital ‘key.’

Here, presents the issue. While Samouri Wallet aimed to keep its users completely anonymous in the name of financial privacy, the US DOJ claimed its level of concealment allowed unlawful activity to run on its platform.

The arrest went down negatively with crypto enthusiasts, with the argument that the government is forbidding the right to privacy.

At the time, high profile whistleblower Edward Snowden chimed in by posting on X: “The Department of “Justice” has once again criminalised the developers of an app that restores financial privacy.

“The way to fix this [is] to make money private by default. Privacy must never be ‘exceptional,’ or they will make it criminal.”

Fintech-loving criminals

We see cryptocurrencies mentioned regularly in relation to unlawful transactions. Ransomware gangs, for instance, will almost certainly demand funds to be transferred via cryptocurrency to avoid traceability, and those trading illicit goods and services will predominantly use it for money laundering purposes, too.

According to Chainalysis, an estimated $24.4 billion was received by illicit addresses in 2023.

“Cryptocurrencies certainly make it easier for cybercriminals to receive their cyber attack ransoms and are able to launder the ransoms with less chance of being monitored and caught along the way,” says Chris Hauk, consumer privacy advocate at Pixel Privacy.

Using cryptocurrency to move money allows criminals to bypass sanctions put in place through traditional financial systems like banks and makes the transaction much more difficult for the police to track.

Ransomware gangs, for instance, will often ask for money to be transferred via Bitcoin, and although this is known to be easily visible now, it can be moved instantly to a few private wallets without little approval.

There are efforts to tackle this by governments. Most major exchanges within cryptocurrency require proof of identity now, thanks to “Know-Your-Customer” measures the US’s Internal Revenue Service (IRS) and the EU are introducing.

This has helped enforcement step up on bad actors using the cyber currency, including a child exploitation ring, seizing a good portion of $4.5 billion in Bitcoin stolen in 2016.

But, Paul Bischoff, consumer privacy advocate at cyber security firm Comparitech states that it will be impossible to completely criminalise cryptocurrencies since they are decentralised, often open source, and easy to create for those with the skills.

Plus, it only tackles criminals within their countries. It remains difficult for government agencies to disrupt those outside.

Maintaining privacy

For context, while criminal activity runs through crypto platforms, it only made up 0.34% of crypto transactions last year according to Chainanalysis.

Surveys reveal that over a third of users use private wallets, and a tenth hold theirs offline in a hardware wallet, proving privacy is something normal users still care for.

“While it’s tough to track cryptocurrency payments, the government could introduce legislation to monitor and manage cryptocurrencies,” says Hauk.

However, the balance between maintaining privacy for the normal citizen, and monitoring cybercrime and fraud is a tricky one to get right, according to Wood.

“These regulations necessitate a delicate balance for providers, as they must align their operations with privacy assurances while adhering to regulatory frameworks designed to prevent illicit financial activities,” he says.

Wood calls for innovative solutions that reconcile privacy with transparency, pushing the boundaries of what can be achieved within the confines of the law.

Hauk adds: “My only concern about the government getting involved is that they’ll likely find ways to use any new laws to monitor the average citizen, who may simply be dipping their toe into the cryptocurrency pool.”

“The history of any cyber-related legislation we’ve seen in the past 30 years has simply led to increased surveillance on the average citizen,” he adds.

However, he also points out that money moving around in crypto won’t get very far in the real world: “Eventually, cryptocurrency must be converted to fiat currency, which are the transactions we should be monitoring most closely.”

Ben Stickland, member at cyber security firm CovertSwarm adds that at least  many UK banks now have policies in place that prevent the purchase of cryptocurrencies or have higher levels of security before allowing those transactions to take place.

According to Wood, there are still many cyber-enabled crimes which rely on traditional methods such as moving money via gift cards and stolen banking information.

“It is critical to understand that these technologies themselves are not inherently geared towards facilitating criminal activities any more than traditional financial systems,” says Wood.

“This requires a collaborative effort among all stakeholders in the cryptocurrency ecosystem to develop balanced solutions that safeguard privacy while preventing abuse,” he concludes.

The post Navigating the line between crypto surveillance and privacy protection appeared first on TechInformed.

The crypto market had faced significant challenges in 2022 and ’23, including the collapse of major exchange FTX, but Bitcoin’s meteoric rise from $42k in January to a mid-March peak of $73k — before stabilising around $65k — has reinvigorated the crypto space and attracted a new wave of investors.

This influx, however, has been matched by a rise in malicious activities, ranging from romance scams to complex phishing operations and exit scams, underscoring the need for heightened vigilance among investors, according to Cyjax.

“At the end of 2022, the cryptocurrency market was seemingly eating itself alive, but 2024 has bounced back, and threat actors are cashing in on the opportunities it brings,” said Joe Wrieden, intelligence analyst at Cyjax.

The Cryptocurrency Threat Landscape Report – Q1 2024 – published last month – details the trending ways attacks have been carried out in 2024.

Romance scams or ‘pig butchering’

The resurgence of romance scams, also known as “pig butchering” scams — a term derived from the Chinese “shāzhūpán”, which describes fattening pigs before slaughter — has been particularly notable.

A Romance Scam, put simply, is when criminals create fake online identities to foster relationships and eventually defraud their victims.

Recent action by the U.S. Department of Justice to recover $2.3 million in cryptocurrency stolen through scams has brought attention to the severity of these fraudulent activities.

These scams are simple yet lucrative and are often connected to organised crime. They utilise inexpensive or forced labour to expand their operations, which has resulted in the theft of over $100 million in funds.

A significant operation was uncovered in Myanmar, where a “fraud factory” forced workers to execute scams, amassing $100 million in cryptocurrency from July 2022 to February 2024.

Sophisticated phishing attacks

Attackers have also become adept at exploiting vulnerabilities and social engineering tactics to impersonate legitimate cryptocurrency firms, tricking users into connecting their wallets to malware-infested sites.

The first quarter of 2024 saw a rise in phishing, including a sophisticated attack that resulted in over $700k in thefts on the MailerLite marketing platform.

Experts first thought it resulted from a ‘dangling DNS’ vulnerability, a type of security hole that attackers can exploit to redirect users to malicious websites. However, attackers had gained access to the admin panel through a customer support employee who was phished.

The breach enabled the distribution of phishing emails masquerading as reputable cryptocurrency firms. These emails offered fake airdrops to lure victims into connecting their wallets to malware known as ‘wallet drainers’.

Unlike traditional scams, which require victims to transfer funds, wallet drainers simply require the victim to connect their wallet to the malicious code, significantly lowering suspicion.

With elections incoming, deepfakes are just the tip of the iceberg, Barry O’Connell reports

‘Zero-value transfer’ attacks represent another sophisticated phishing technique to deceive cryptocurrency users into mistakenly sending funds to a fraudster’s address.

These attacks mimic legitimate recipient addresses closely, often differing only in capitalisation, to lure victims into accepting a transaction of zero tokens to the victim’s address from the spoofed one. These transactions don’t require approval due to their nil value.

The objective is to make the victim believe they have previously interacted with this address, leading them to confuse it with a genuine address during transactions.

This method capitalises on users’ difficulty distinguishing between similar-looking addresses, allowing attackers to target multiple wallets simultaneously and wait for victims to fall into the trap.

Exit Scams 

The report claims that exit scams, or “rug pulls,” have seen a disturbing rise, with attackers creating fake projects to siphon off investor funds.

Rug pulls typically involve creating a seemingly promising project to attract investment, only for the orchestrators to vanish with the pooled funds, leaving investors with worthless assets.

The process often relies on building trust through endorsements from influencers or reputable figures in the crypto world. Once the project is abandoned, confusion is created, community response is delayed, and theft is maximised.

A key tactic in these scams is ‘wash trading’, an illegal practice of buying and selling assets to feign high market activity and lure more investors.

According to the Cyjax report, the sophistication of these operations suggests a deep understanding of market dynamics and investor psychology.

Social media

Social media platform X — formerly known as Twitter — has also impacted crypto scams since Tesla boss Elon Musk bought it.

While malicious activity had occurred on Twitter before it became X, the report claims that the decision to transition X’s verification system to a paid-for model has inadvertently facilitated the proliferation of fake and impersonated accounts, leading to increased fraud.

Leveraging the perceived legitimacy previously conferred by the Twitter verification badge, fraudsters require minimal effort to execute highly lucrative scams.

Scam investigation firm ScamSniffer identified 1,517 accounts mimicking reputable companies like zkSync, Inscribe, and Optimism.

they have created a few more accounts to impersonate @Optimism @zksync @inscribe_app @Portalcoin

can you identify which one is real? https://t.co/Kfbm8PBTVr pic.twitter.com/WdVTSd6e4q

— Scam Sniffer | Web3 Anti-Scam (@realScamSniffer) February 1, 2024

Cyjax warns that the ease and effectiveness of these tactics highlight a growing challenge in the digital trust landscape, necessitating increased vigilance from users and platform operators alike.

Account takeovers and malicious advertising have further compounded the issue, with notable incidents including the compromise of the SEC’s X account and the exploitation of the late ‘Friends’ actor Matthew Perry’s profile.

Last year, the social media app witnessed a significant exodus of advertisers, which the Cyjax report partly attributes to a surge in cryptocurrency-related scams facilitated through malicious advertising on the platform.

In December 2023, a notable scam operation exploited Google and X’s advertising systems to disseminate drainer malware, successfully pocketing $58 million.

What’s next?

The report concludes that the shift towards targeting individuals rather than systems represents a significant evolution in the threat landscape.

With an estimated $173 million stolen in Q1 alone, the trend of sophisticated scams, which leverage social media platforms and exploit the bullish market sentiment, is expected to continue.

“As we head into Q2, we expect to see scammers targeting newcomers more on social media platforms. As X begins to clamp down further on malicious attacks, threat actors may start to abuse other platforms such as TikTok and Instagram through short-form content,” added Wrieden.

Cyjax urges investors to exercise caution and scepticism as the crypto market continues its upward trajectory, particularly when engaging with social media platforms and seemingly attractive investment opportunities.

For tech leaders and investors navigating the volatile crypto market, staying informed and adopting robust security measures are essential to safeguarding investments against the ever-evolving threat landscape.

Wrieden concluded: “Crypto is continuing to rise, and the opportunities seem endless, but investors should be careful who they can trust because they’re not the only ones that see profits…”

The post Cryptocurrency market faces surge in scams amid investment boom appeared first on TechInformed.

Panama-based Towerbank is a fifty-four-year-old family-run institution serving a largely Latin American customer base in a region that is experiencing a higher than average inflation rate.

It’s a conservative organisation, according to Gabriel Campa – the commercial bank’s head of digital assets – and one that prides itself in being free of money laundering scandals.

Nonetheless, Towerbank’s president and CEO recognised that the bank needed to reboot its business model: all banks were offering the same products and services, and it was getting harder to compete with bigger players.

During an analysis of customer activity was carried out as part of the bank’s next ten-year plan, Campa noticed that more were buying cryptocurrency on their credit cards.

“Initially this was a risk for us, because we had no idea where the money was coming from,” he recalls. “We want to serve our customers – but we needed transparency.”

So, Tower started asking its clients what they were doing with the crypto and how the bank could help. It transpired that most uses were similar to regular bank services. Customers were using crypto to buy, to sell, for custody (secure storage), loans and overdrafts – ”All the normal standard banking products, but in the crypto space,” Campa observes.

While this might not seem like a radical use of crypto, in Latin American markets where inflation is still high (Venezuela’s inflation rate hit nearly 190% last year; Argentina’s hit 287% this March), people are turning to cryptocurrencies to protect their economic security.

To investigate further how the bank could help its customers who were buying crypto, Campa invited forty of them into the bank to find out more about what their clients needed.

The vision

Following its initial research, Tower kept the proposal simple to begin with, but broadly crypto friendly. If customers were transparent about their uses of crypto and its origins, it was willing to accept fiat currency that had initially come from crypto, so long as the crypto wallet it came from could be verified by [blockchain data platform] Chainanalysis.

At this point, the bank also got the regulators involved as well as other banks and informed them of its intentions to work with crypto. For Campa, this was about building trust.

“They know we are going to do things right. We are going to report what we find. That trust has allowed us to work behind the scenes without making much noise,” he says.

The next step was to enable crypto-to-fiat transfers. Campa says that one of the first transfers Towerbank received in crypto was from a client who had funds in the ill-fated cryptocurrency exchange FTX – just at the point where it was collapsing.

“He had to make payments in Panama. He called us and said, ‘I have $10K I need to make payments I have no way of sending my money’. We had the basic model in place by this point. So, we’d receive $10K in fiat currency and we’d ask them to show us the crypto wallet where that $10K came from. Which was verified by Chainanalysis.

“We gave him a deposit address he sent us his money in crypto we exchanged it into fiat in four hours,” Campa recalls.

While it was possible to handle this new service for 40 or so clients, it was still a time-consuming process. To scale, the bank needed to create an app-controlled crypto wallet that operates as a bank account, and to automate as much of this process as possible.

Campa’s vision was for this app to do all the things a bank offers – ACH transfer, SWIFT payments etc, but one which also handle clients’ crypto so that they can buy and sell in one place.

“The only policy we’ve established in the bank is that we don’t buy or sell or take custody of crypto,” Campa adds. “ We are not an exchange, and we don’t believe that banks should have crypto on the books. That’s too risky.”

To separate digital from fiat the bank set up its own trust to handle its clients’ crypto.  Campa explains: “That way if something were to happen to the bank the crypto is safe. Or let’s say crypto goes to zero – it’s the client’s crypto. We don’t put our any of our customers’ funds at risk.”

The bank plans to make its money on conversion fees rather than charging for the bank account. In terms of the type of crypto, Tower will accept Bitcoin, ether (ETH) and US dollar backed stablecoins Tether (USDT)and USD Coin (USDC). The plan is to allow more over time, Campa adds.

The tech

To achieve Campa’s vision of offering a hybrid banking service “that acts as the bridge between the fiat and the crypto ecosystem” Towerbank needed to build a scalable and flexible model. And one that was capable of handling two entirely different worlds – the crypto users who view traditional banks as “way too complicated” (in Campa’s words) and the traditional banking community.

Initially, Tower started building a model in AWS Cloud, but soon realised it needed a more robust solution. After attending Amazon’s re:Invent conference in Las Vegas, he was introduced to low-code no-code platform Appian.

Campa explains that this platform has enabled the bank to automate many of the process (96% in total, he claims) that were taking its team hours to do manually.

“Appian runs our entire onboarding process. It opens a bank account and a crypto account at the same time all in one shop. Before it would take our team around seven hours per client: one hour with the client and then six in the background doing paperwork. Now it’s 10 minutes with the client,  and an hour and a half of paperwork. We are feeling the impact immediately,” he says.

Appian also handles the crypto backend – as well as the transfers and execution of ACH and SWIFT, debit card processing and due diligence and compliance.

Campa adds that another advantage of using the process management system, is its ability to connect the bank’s other partners via APIs, which include its cloud banking platform provider Mambu;  payment gateway provider, Frame Banking and verification tool Chainanalysis.

In the background the Appian system also collates data and sends it to the bank’s data lake to enable deeper analytics in the future, to create more products and services to support these clients.

Another key tech provider was the crypto wallet, ikigii, which claims to be the only crypto wallet that is also a US dollar bank account.

Campa enthuses: “There’s nothing like it. It’s the only wallet where you can put both currencies into one place to allow payments for conversion to send and received; for P2P; custody and digital finance space loan and overdraft. International wires and payments.”

The results

According to Campa, the bank has already managed to on board around 700 clients with this system – and that’s before the app‘s official launch, which is scheduled for next month.

He estimates that the bank handled about US$30m in transactions from crypto clients last year: “We might have US$2m to US$3m in deposits. We have around 2,000 new clients with around 200 to 300 of these constantly transferring fiat to crypto, crypto to fiat.”

Campa maintains that if clients send over their crypto today, they will receive the cash in their accounts “within 50 seconds”. The bank is forecasting 2x growth this year and is hoping to enhance its hybrid platform with blockchain and generative AI technology, launching new products that include asset tokenisation and e-commerce with crypto.

While there are other means of converting crypto, Campa concludes that, even in the decentralised world of crypto and blockchain, banks can have a key role in acting as a trusted intermediary. This is especially true, he adds, in territories where crypto scams are so common that many banks won’t touch the currencies – leading to a great vulnerability among users and investors and a rise in Peer-to-Peer (P2P) crypto scams.

“There are lots of P2P scams that involve the seller accepting crypto and then ringing up the buyer’s bank and trying to get the money back. With a transparent relationship at the bank, a relationship with the regulators and corresponding banks, Tower can verify transactions and push back against refunds knowing that it was a legitimate transaction.

“We’ve got to this point because our clients trust us and are willing to tell us they are using crypto,” says Campa.

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FTX still owes customers billions of dollars following the collapse of the cryptocurrency exchange in November 2022.

The firm is aiming to sell off all its remaining assets to a value of around $16.3 billion to cover around $11 billion worth of debt owed to customers left out of pocket when the firm closed under a cloud of controversy.

FTX was one of the world’s largest cryptocurrency exchanges before its downfall, which was triggered when customers withdrew billions of dollars amid reports about the behaviour of founder Sam Bankman-Fried.

In March, Bankman-Fried was sentenced to 25 years in prison for defrauding FTX customers and investors.

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US government blocks chips sales to Huawei

US regulators have banned US chipmakers from exporting certain unspecified goods to Huawei in the latest setback for the Chinese telecoms vendor.

The Department of Commerce did not disclose which licences it had revoked but reports from Reuters claim US chip companies such as Intel and Qualcomm have all been affected by the move.

The US acted after Huawei released its first AI-powered laptop, the Matebook X Pro, powered by Intel’s Core Ultra 9 processor. Republican lawmakers had criticised President Joe Biden for not taking tougher actions against the Chinese company, claiming the launch showed Huawei was “making a comeback” despite previous US sanctions.

US officials have accused Huawei helping China engage in espionage around the world, something the company has repeatedly denied, prompting the ban on sales of its telecoms equipment in the US.

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TikTok sues US over ban

TikTok is suing the US government to block an incoming law that will see the video sharing app banned unless its Chinese owners sell its share in the firm.

Parent-company ByteDance called the law – signed last month by President Joe Biden – an “extraordinary intrusion on free speech rights” of American citizens who use TikTok.

The social media app has around 170 million users in the US but has faced criticism from US lawmakers across both major parties who claim its Chinese ownership raises the risk of Beijing exploiting data or promoting propaganda, meaning it should be classed as a national security risk.

The law gives ByteDance nine months to sell TikTok, which has maintained its stance that it is independent of the Chinese government. In the filing with the DC Circuit Court of Appeals, TikTok said the sale requirement was “simply not possible: not commercially, not technologically, not legally. And certainly not on the 270-day timeline required by the Act”.

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AI start-up wins Wayve of funding for automated vehicle tech

The UK AI start-up has raised more than £1 billion in funding to develop the next generation of artificial intelligence-powered vehicles.

Major tech names including Japan’s SoftBank, chipmaker Nvidia and Microsoft all backed London-based Wayve in what is the biggest ever investment round to date for a European AI startup.

Wayve’s current technology is integrated into six vehicle platforms including electric cars such as the Jaguar I-Pace and the Ford Mustang MachE, as part of advanced driver assistance systems. It said the funding will be used as part of global expansion plans.

Alex Kendall, a co-founder and the chief executive of Wayve, said: “This investment will help us launch our embodied AI products and expand our operations globally. It sends a crucial signal to the market of the strength of the UK’s AI ecosystem, and we look forward to watching more AI companies here thrive and scale.”

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UK regulator warns social media giants to hide toxic content from kids

Ofcom has warned social media firms such as Facebook and TikTok that they face being named and shamed if they fail to protect children from harmful content online.

New UK online safety rules empower the UK regulator to potentially ban platforms that fail to enact more robust age-checking measures and reformulate algorithms to protect under-18s from “toxic content”.

Ofcom’s children’s safety codes call on services to make their platforms child-safe by default or implement robust age checks to identify children and give them safer versions of the experience.

More seriously harmful content, including that relating to suicide, self-harm and eating disorders, will need to be kept off children’s feeds entirely, as will pornography.

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More than 10,000 black cab drivers have launched a collective £250 million lawsuit against Uber, claiming the firm has breached London’s taxi rules and misled regulators to secure licences.

Litigation firm RGI has filed legal action in the London High Court on behalf of the drivers. The case is based on one first filed in 2018 that alleged Uber had allowed drivers to take bookings directly from customers in direct breach of private hire rules.

The Transport for London rules says firms like Uber must use a centralised booking system for hires, but the claimants accuse the American company of misleading regulators about its business model, which directly cost the black cab drivers business.

Uber has repeatedly denied the accusations.

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US Highways agency to probe Ford’s self-drive tech BlueCruise 

The US National Highway Traffic Safety Administration has launched an investigation into Ford’s BlueCruise driver assistance system following two fatal collisions.

The NHTSA said its investigation into BlueCruise – Ford’s driver assistance technology that allows hands-free driving on certain roads – will focus on the driver monitoring aspect of the system.

In February, a Ford Mustang Mach-E using BlueCruise hit the rear of a stationary Honda, killing the 56-year-old driver of the stopped car, according to Reuters.

The other crash involving a Ford Mach-E occurred in March in Philadelphia. Ford has said it will co-operate with the probe.

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OpenAI signs up FT to train ChatGPT

ChatGPT-owner Open AI has struck a deal with the Financial Times to allow the newspaper’s content to be used to help train AI systems.

The FT is the latest publisher to agree an arrangement with OpenAI. The deal will see the publisher paid an undisclosed fee in exchange for access to its content.

John Ridding, the chief executive of the FT Group, said it was “right” that AI companies paid publishers for their material.

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Binance founder Zhao jailed 

Binance co-founder Changpeng Zhao has been sentenced to four months in prison in the US after pleading guilty to violating US money laundering laws.

The founder of the world’s largest crypto exchange stepped down from Binance in November after pleading guilty to the charges, which followed an investigation into whether it had helped users bypass sanctions.

Binance was ordered to $4.3 billion for Zhao’s “wilful violations”  and prosecutors had sought a three-year sentence for the executive.

“Binance turned a blind eye to its legal obligations in the pursuit of profit,” said Treasury Secretary Janet Yellen.

“Its wilful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”

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EU opens Meta election probe

The European Commission has launched a formal investigation into Meta over how it handles political content and misinformation as elections take place across the globe this year.

Elections are due to take place in the bloc later this year, so officials have warned the Facebook-parent company that they will assess whether its plans to moderate content on its platforms, which also include Instagram and WhatsApp, could breach EU laws.

One concern highlighted by commissioners is potential interference campaigns from “malicious actors” such as Russia, who have been accused of using Facebook to disrupt previous election cycles.

Regulators also expressed concerns about how Meta oversees its advertising campaigns, and whether they are open to exploitation. The Commission will also investigate whether Meta is transparent enough over its moderation tools for political accounts and content.

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The investment was revealed as part of UK Chancellor Jeremy Hunt’s Spring Budget, which was delivered in the House of Commons today.

During his speech in front of fellow MPs, Hunt claimed there was “too much waste” in public systems, adding that technology could be used to find more efficiency in the National Health Service (NHS) and policing nationwide.

As part of the reforms, AI will be used to cut NHS scan times by a third and the police will deploy drones to incidents such as traffic collisions.

“There is too much waste in the system, and we want public servants to get back to doing what matters most: teaching our children, keeping us safe and treating us when we’re sick,” Hunt said.

“That’s why our plan is about reaping the rewards of productivity, from faster access to MRI (magnetic resonance imaging) for patients to hundreds of thousands of police hours freed up to attend burglaries or incidents of domestic abuse.”

The investment into the NHS could see as many as 130,000 patients a year receive test results quicker because of at least 100 MRI scanners in England being upgraded with AI.

“Backed by £4.2 billion in funding, the plan will allow public services to invest in new technologies like AI, replace outdated IT systems, free up frontline workers from time-consuming admin tasks and take action to reduce costs down the line,” said Hunt.

“The NHS will receive an additional £3.4 billion as part of this to invest in new tech and digital transformation, including making the NHS app a single front door for patients, piloting new AI to halve form-filling times for doctors, rolling out universal electronic patient records, and over one hundred upgraded AI-fitted scanners so doctors can read MRI scans more accurately and quickly.”

Productivity boost

Additionally, government plans included £800 million to be invested to “boost productivity across other public services”. This will include £230 million for drones and controversial new technologies such as  facial recognition to free up police time for more frontline work.

However, from Michal Szymczak, who is head of AI strategy at tech consultancy Zartis, criticised the government for not laying out more detail about its plans for the public sector.

He said: “While today’s UK Spring Budget Statement has paid lip service to AI playing a part of investments across healthcare and public sector, it’s disappointing we didn’t hear more specifics.

“Considering we’re dealing with a technology here that is poised to change the world, it feels like an oversight for the UK government not to address it more thoroughly. It would have been good to see more transparency over how exactly the UK plans on staying on top of the AI power struggle against major players like the US and China.”

AI leadership

Taking a leading position in the global artificial intelligence race has been a key goal for Rishi Sunak’s government since he succeeded Liz Truss as Prime Minister in 2022. This included hosting the first ever AI Safety Summit last year, plus major investments into the sector.

Prior to budget day, the government revealed plans to announce significant further investment into AI by doubling the £100 million investment into the Alan Turing Institute that was announced last year.

The institute, named after the British WW2 codebreaker, is the UK’s national hub for data science and artificial intelligence (AI).

An extra £100m spread over five years will go towards three key areas where AI is poised to make a big difference: in healthcare discoveries, protecting the environment and bolstering national defence.

SME taskforce support

The government also announced a new £7.4m upskilling fund pilot that aims to help SMEs develop AI skills of the future and unlock new opportunities in the space. It comes ahead of the UK’s SME Digital Adoption Taskforce launch.

“The taskforce will investigate how best to support the adoption of digital technology by SMEs to boost their productivity,” the budget document reads.

“The work of the taskforce will support that of the AI Opportunity Forum, which brings pioneering companies together to encourage AI adoption across the private sector to boost productivity, fuel innovation and deliver growth in all areas of the economy.”

According to Erin Nicholson, global head of data protection and privacy at global tech consultancy, Thoughtworks, the budget highlights how the UK is “punching above its weight” in the AI sector.

“Right now, it’s placed 4th internationally in the Global AI Index, thanks to a consistently high calibre pool of tech talent,” added Nicholson.

“However, to keep pace with this, the Spring Budget needed to include funding for Data and AI education.

“The Global AI Index shows the UK is lagging significantly when it comes to its AI ‘operating environment’ – which is essentially the public’s opinion on artificial intelligence. The nation has work to do to educate the public on AI and its usage. Funding could have been allocated to add AI topics to the national curriculum to bridge the gap between understanding and awareness.

LIFTs

An announcement that followed plans revealed in the Autumn Statement, was around the Mansion House Compact, which saw the UK overhaul pension regulation to fuel investment and growth in the tech sector.

Industry had heaped pressure on the government to do more to unlock the nation’s estimated £4 trillion pound pension pot, which was stymied from investing in tech startups due to layers of pensions and financial services regulation.

In November, Hunt announced a £320 million plan aimed at getting the UK’s pension pots working for both investors and tech startups looking to scale in their home territory.

Hunt said the government wanted to “make sure there are vehicles to make it easier for pension funds to invest in UK growth opportunities” under the Long-term Investment for Technology and Science scheme (LIFTs).

The LIFTS proposal was launched last year with the aim of facilitating greater investment into UK science and technology companies, and the first asset managers to participate were announced today (6 March).

Schroders Capital, part of UK-listed asset manager Schroders, has been awarded £150m by the British Business Bank to invest into UK science and technology companies, with Phoenix Group matching the investment. In addition, the British Business Bank has awarded ICG £100m to invest in life sciences companies based in the UK. This is also being matched by Phoenix.

Crypto tax

Finally, the government also revealed plans to recoup around £205 million over the next five years from tax investigations into cryptocurrency investors through changes to the tax self-assessment process. The changes mean crypto assets will be listed separately from the 2024-25 tax year.

Neela Chauhan, partner of UHY Hacker Young, explained the implications of these changes: “From 2027 it will be easier to receive data from other countries on cryptocurrency accounts. This data will be received under what is called the Common Reporting Standard.”

“Given the recent surge in Bitcoin and other crypto values we would expect the underpaid tax in this area to be far more.”

“Many UK investors in crypto assets don’t understand that they owe tax or deliberately avoid paying the tax they owe on capital gains. Many UK investors also think that the crypto assets they hold offshore are not traceable by HMRC.”

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