American officials are lobbying their Dutch counterparts to block ASML from selling older-generation lithography tools to China.

The U.S. is pushing to block a Dutch company called ASML from selling chip-manufacturing tools to China.

In order to hobble China’s ability to produce computer chips, U.S. officials are in talks with their counterparts in Holland to block a semiconductor manufacturing tool maker based there from exporting its machines to China, Bloomberg News reported on Tuesday.

The Dutch ASML makes lithography machines that perform one of the critical steps in modern chip production. Several years ago the U.S. successfully lobbied the Dutch government to block the sale of extreme ultraviolet lithography, or EUV, tools needed to print the world’s most advanced chips. But now officials are going a step further: They're attempting to block the export of the prior generation of tools — deep ultraviolet lithography, or DUV, machines — Bloomberg reported.

The older generation of DUV machines are widely used in global chip production and are used to make many of the chips in phones, PCs and autos. ASML controls most of the market for DUV tools.

An ASML spokesperson said that discussions in Washington about blocking DUV exports to China aren’t new, and that no decision has been made. U.S. Deputy Secretary of Commerce Don Graves recently visited Holland and met with ASML’s CEO, Peter Wennink.

Choking off the China market for DUV tools would damage ASML’s business, which sold €2.7 billion ($2.8 billion) worth of products and services in 2021 to companies either based in China or with operations there, according to its most recent annual report. Other tool makers such as Applied Materials and Lam Research are already banned from selling some of their machines to China’s SMIC, but would likely be hurt by an expanded tool ban, too.

Want your finger on the pulse of everything that's happening in tech? Sign up to get Protocol's daily newsletter.

Your information will be used in accordance with our Privacy Policy

Thank you for signing up. Please check your inbox to verify your email.

Sorry, something went wrong. Please try again.

A login link has been emailed to you - please check your inbox.

Max A. Cherney is a senior reporter at Protocol covering the semiconductor industry. He has worked for Barron's magazine as a Technology Reporter, and its sister site MarketWatch. He is based in San Francisco.

Customers locked out of their accounts from the Voyager Digital bankruptcy could get quicker access to part of their claims under a new proposal from FTX and Alameda Ventures.

The firms, both run by crypto billionaire Sam Bankman-Fried, announced the plan Friday. Under the joint proposal, customers of Voyager could start a new account with FTX with an opening cash balance funded by an early distribution of their bankruptcy claims. Customers could either withdraw the cash immediately or use it to purchase digital assets through FTX.

The plan would require approval from the bankruptcy court overseeing Voyager's case. It would be optional for customers, the firms said, as some may wish to instead pursue their claim through the courts.

Because crypto deposits lack the regulatory protections of traditional banks and brokerages, customer assets held by Voyager could be considered part of the company's bankruptcy estate, with those customers given a low priority to recover them as unsecured creditors.

"Voyager's customers did not choose to be bankruptcy investors holding unsecured claims," Bankman-Fried said. "The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business — a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks."

In a letter to Voyager's attorney posted online Friday, FTX and Alameda described the plan as requiring a two-pronged transaction:

Alameda will purchase all Voyager digital assets and digital asset loans (other than the loans to Three Arrows Capital ('3AC'), discussed below) in immediately available cash at fair market value. Alameda would pay the cash value of Voyager’s digital assets into escrow; and FTX (or an applicable subsidiary thereof) will offer those Voyager customers who on-board with FTX the ability to receive their share of that cash in an account at FTX. Customers could withdraw their cash without gates or lockups or, if they choose, re-invest it in digital assets of their choice. FTX would waive the first month of trading fees for Voyager customers who wish to purchase digital assets rather than withdraw their cash.

Alameda would also write off a $75 million loan claim. The firm would not purchase any claims related to the collapsed hedge fund Three Arrows Capital, describing the ongoing Chapter 11 proceeding as "the best place to pursue recoveries relating to Voyager’s loan to 3AC."

Some customers have dollar balances held in accounts on Voyager's behalf at Metropolitan Commercial Bank. "We are open to including or excluding these accounts from the transaction, as best for customers," the FTX letter said.

FTX hopes to close the transaction by mid-August, it said.

It started with an ill-advised photo posted by the most-followed woman on Instagram. Kylie Jenner, the model-turned-mogul, posted a picture with rapper and partner Travis Scott on a tarmac between two private jets with the caption, “you wanna take mine or yours?” The post unleashed a torrent of criticism that has only intensified thanks to a flight-tracking Twitter account that's put the rich's profligate emissions in the spotlight.

The comments on the photo — which have since been closed — called out Jenner, not only for her display of excessive wealth, but also the climate damage of private jet use. The firestorm was bolstered by the findings of Twitter account @CelebJets, which automatically tracks the movements of celebrity planes. The account revealed that Jenner routinely uses her private jet for trips that are under 15 minutes. She’s not alone, either; the account has also shown that celebrities including Floyd Mayweather, Kenny Chesney and Drake are members of the super-short-flight club.

The public outrage over the carbon emissions of the super rich has served as a case study for how new technology and publicly available data can be used for climate accountability. Jack Sweeney, the 19-year-old creator of @CelebJets and many other automated jet-tracking accounts (including the now-infamous @ElonJet), is pleased that his work has had an impact.

“Hopefully it makes people be more careful with their flights or … think more about traveling less or being more efficient,” Sweeney told Protocol.

While his accounts initially used available FAA information to track the departures, intended flight paths and landings of planes Sweeney thought were interesting, in May he adapted the trackers to include fuel use and carbon emissions as well. The estimates are based on the type of plane and how much fuel per hour it burns. He doesn’t have every plane model in there yet, but he’s planning to add more.

There are already companies looking to seize upon the opportunity that @CelebJets has opened up. Sweeney said at least one carbon offset company has reached out about using the trackers to integrate offset payments into celebrity jet travel.

This is a happy development for Sweeney, who pointed out that Bill Gates is already offsetting his private jet travel, and if he can do it, others can, too: “If … more and more people do it, then it should help,” he said.

It remains to be seen if the pressure will pay dividends for the climate. Jet travel is notoriously hard to decarbonize, and offsets come with all sorts of problems from both climate and land rights perspectives.

The scrutiny brought by Sweeney's trackers has rattled at least some private jet travelers, though they may be taking away the wrong message. Musk reached out to Sweeney personally last fall asking him to take down the popular @ElonJet account, offering him $5,000 to do so. That's not exactly a solution that would benefit the climate, though. While Jenner has yet to slide into Sweeney’s DMs, he said both billionaire entrepreneur Mark Cuban and sales mogul Grant Cardone have done so in recent months.

Sweeney's father works in the airline industry, and Sweeney has been tracking flights since childhood. But he might not be stopping at watching the rich take to the skies. Sweeney got access to data from MarineTraffic, a ship-tracking intelligence company, a few months ago. Though he hasn't yet done anything with it, others are already using similar data to track some billionaires' yachts, including the one owned by Washington Commanders owner Dan Snyder.

Using data and technology to reveal private jet and yacht travel does more than create a social media ruckus. It highlights one of the key injustices of climate change: Rich people are responsible for a disproportionate sum of carbon pollution.

Research shows that a single flight across the U.S. in a Gulfstream IV private jet — a particularly popular model — emits twice the amount of carbon dioxide that the average American does in an entire year. A Bloomberg analysis published earlier this year also revealed that the top 1% of the world's highest earners emit a staggering 70 times more carbon dioxide than the bottom 50% combined. These dynamics often play out as background noise, but trackers like Sweeney's are ensuring they're a bigger part of the conversation about how the world should reduce emissions.

Correction: This story has been updated to correct the spelling of the Washington Commanders' name. This story was updated July 22, 2022.

Pico, the VR subsidiary of TikTok owner ByteDance, is preparing to launch a new headset. New filings for a Pico 4 headset passed through the FCC this week, revealing the company's plans to introduce two versions of the headset, which include a “Pico 4 Pro” model.

Both headsets are standalone devices, similar to Meta’s Quest line of wireless devices. The Pro model of the new Pico headset will include face and eye tracking functionality, according to a document included in the filings. The internal code name for the new headset appears to be Phoenix. The product will be running Android Q and make use of a Qualcomm processor.

ByteDance did not immediately respond to a request for comment.

There are few additional details to be learned from the heavily redacted filings, but the new headsets will apparently also launch with a revised controller. Partial device photos show both the controllers and the headset itself will be white, similar to the company’s existing Pico 3 Neo line of devices.

ByteDance acquired Pico a year ago. Prior to that, the VR startup was primarily focused on the enterprise market. More recently, ByteDance has been signaling its intentions to compete more directly with Meta and its Quest line. Pico began selling its current Neo 3 Link headset to consumers in Europe this spring.

An ex-Coinbase product manager was charged on Thursday with insider trading for passing along tips about upcoming listings of tokens on the crypto exchange.

The SEC charged Ishan Wahi and his brother, Nikhil Wahi, and friend Sameer Ramani in federal district court in Seattle.

Ishan Wahi, who worked on Coinbase's announcements of newly listed crypto tokens, allegedly passed information about the listings to his brother and Ramani, who purchased at least 25 crypto assets from June 2021 to April 2022.

The SEC in its release alleged that at least nine of the 25 assets were securities, but did not indicate which ones it considered securities. Those designations will likely be of intense interest to the industry, since the SEC has not publicly identified many tokens that it considers securities and which are hence subject to strict regulation by the commission.

Coinbase's listings of tokens have attracted considerable interest, because a listing on the crypto exchange usually draws in more trading activity and liquidity. Prices often rise after a listing, either because of the increased liquidity, speculative betting or a combination of both. Some parties scoured Coinbase activity and documents to glean insights into tokens it might list.

The three earned more than $1.1 million through the benefits of the inside information, the SEC alleges.

The Seattle federal complaint charges the three with antifraud violations of securities laws, and another coordinated complaint in the Southern District of New York includes criminal charges against them.

In April, Coinbase announced it would post a list of tokens that it was considering listing to increase transparency. Coinbase said its changes would improve "information symmetry."

In a sign that the electric vehicle race is heating up, Ford announced that it's expanding its battery supply chain. One of its new deals includes an investment in the controversial Rhyolite Ridge mine in Nevada.

The U.S. automaker said on Thursday that it will have enough battery supplies to bring 600,000 EVs to market per year by the end of 2023. That would get the company on the way toward meeting its goal of building 2 million EVs annually by late 2026.

The company said it has reached a major agreement with the Chinese company Contemporary Amperex Technology Co. Limited, which is the world’s largest battery-pack supplier. Ford will also buy from LG Energy Solutions and up its buy from its existing partner SK On.

The company also signed a binding off-take agreement to purchase lithium from the Rhyolite Ridge mine, a proposed open pit lithium mine in Nevada. The project is controversial because it could potentially destroy a rare buckwheat plant that Fish and Wildlife Service has proposed listing as endangered under the Endangered Species Act. The project reflects growing tensions between conservation and local environmental damage caused by mining critical minerals versus the climate crisis and need for electrifying everything ASAP. Ford has not commented publicly on why it chose to source lithium from this project or if it plans to seek out critical minerals from other controversial locations.

The expansion of Ford’s battery sources also involves diversifying the types of batteries it uses. The company said it would expand the use of lithium iron phosphate battery cells in addition to the nickel cobalt manganese cells it currently relies on. These LFP batteries could provide a lower-cost option for Ford’s growing EV fleet.

Ford’s announcement is an example of just how dramatically automakers’ priorities have shifted. The company's electrified versions of the Mustang and F-150 have proven popular; Ford has already sold 17,675 Mustang Mach Es and 2,296 F-150 Lightnings and demand shows no sign of slowing down given high gas prices. The ambitious EV plans of Ford and many of the industry’s giants means a stable battery supply chain is a major competitive advantage.

This comes as the federal government also makes investments in the domestic battery supply chain in a bid to avoid reliance on China as the U.S. transitions to EVs.

In all the talk of Ford’s push to secure its electric future, the company did not mention a recent report from Bloomberg that the company is anticipating layoffs, to the tune of up to 8,000 employees. Many of those layoffs are expected in the recently created Ford Blue unit tasked with keeping its legacy internal combustion business going.

Amazon is buying primary health care company One Medical for roughly $3.9 billion, the companies announced Thursday morning. The company says the deal will allow it to "reinvent" health care and "dramatically improve the healthcare experience over the next several years," said Neil Lindsay, senior vice president of Amazon Health Services.

One Medical CEO Amir Dan Rubin said in a statement that the deal represents an opportunity to merge Amazon's "customer obsession" with One Medical's health care technology and expertise. Rubin will remain CEO upon completion of the deal, with Amazon acquiring the company for $18 per share in an all-cash transaction. The deal is subject to approval by federal antitrust regulators and requires approval by One Medical shareholders.

One Medical, owned by parent company 1Life Healthcare, was founded in 2007 in San Francisco. The boutique primary care company now has 188 medical offices in 25 markets and has more than 8,500 enterprise clients across the country, according to its latest quarterly results. It has a direct-to-consumer, membership-based model and has made a big push into telehealth since the beginning of the pandemic. The company went public in 2020.

Amazon has delved deeper into the health care space in recent years, growing its brick-and-mortar health care clinic presence and expanding its telehealth service, Amazon Care. It also bought online pharmacy company PillPack in 2018. Haven, Amazon's previous venture with Berkshire Hathaway and JP Morgan to disrupt employee health care, fell apart in 2021 after three years. The move to buy One Medical signals Amazon's ambition to dive into broader primary care.

Varo has laid off 75 employees as part of an effort, the neobank said, to move toward profitability.

CEO Colin Walsh wrote in a blog post Tuesday that the company "must make some difficult decisions to ensure that Varo has sufficient capital to execute on our strategy and path to profitability." The cuts represent a little less than 10% of the company's staff, according to head count estimates on LinkedIn.

Varo, which provides online checking and saving accounts along with other services, was the first consumer neobank to secure a national banking license with the Office of the Comptroller of the Currency.

After the fintech sector saw record investment totals in 2021, the appetite from venture capitalists to bet on fintech firms has cooled considerably this year. Varo joins a list of fintechs to conduct layoffs in recent months that includes Klarna, Bolt and Robinhood.

Varo in September raised a $510 million series E round at a $2.5 billion valuation.

First-quarter filings with banking regulators showed Varo was burning through its capital quickly and risked running out of money by the end of the year, as first detailed in the Fintech Business Weekly newsletter. Walsh told Banking Dive that "we remain very well capitalized and have sufficient capital to reach profitability, without having to raise additional capital."

The company, founded seven years ago, is establishing a new business unit called Varo Tech, according to Walsh's announcement. The department will "bring together the technology, design, data and product functions under a single umbrella" to increase speed and reduce costs, Walsh said.

The company, through a spokesperson, declined to share further detail on what jobs are being cut through the layoffs.

Minecraft developer Mojang, a subsidiary of Microsoft, said on Wednesday it was instituting a ban on blockchain technology and non-fungible tokens integrating with its game client or making use of any of the game's assets like mods, items and character skins.

The company posted a blog post titled "Minecraft and NFTs" and acknowledged that some creators and companies have begun launching NFT projects associated with Minecraft world files and skin packs. The post also suggested Minecraft creators may use the game as a platform to create and sell collectible NFTs that players could earn through activities performed on a Minecraft server or as a reward for activities in the real world.

"To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not permitted to be integrated inside our Minecraft client and server applications nor may they be utilized to create NFTs associated with any in-game content, including worlds, skins, persona items, or other mods," Mojang wrote in the post.

"We will also be paying close attention to how blockchain technology evolves over time to ensure that the above principles are withheld and determine whether it will allow for more secure experiences or other practical and inclusive applications in gaming," the company added. "However, we have no plans of implementing blockchain technology into Minecraft right now."

The traditional game industry has begun to distance itself from NFTs over the past few months following backlash from players and a crashing crypto market. Sony last week said it would be launching a digital collectibles feature as part of a new PlayStation rewards program, but clarified emphatically that it its collectibles were "definitely not NFTs." Ubisoft, which became the first major game publisher to experiment with NFTs last fall, shut down its experiment after four months. Last October, Steam marketplace owner Valve said it would not permit any games using blockchain or NFT technology, though Fortnite creator Epic Games recently opened the door to such products on its PC game store.

Microsoft has not issued a strong opinion on the subject as it relates to its library of gaming properties before now. But Xbox chief and Microsoft Gaming CEO Phil Spencer told Protocol last year he was "leery" of the "near-term kind of hysteria around NFTs" and the potential for scams, fraud and the pyramid scheme nature of the crypto market leading to consumers losing vast sums of real money very quickly. Spencer separately told Axios last fall that NFTs had the potential to be exploitative and that the market contained "a lot of things that probably are not things you want to have in your store."

Mojang's blog post expresses similar sentiments. "Each of these uses of NFTs and other blockchain technologies creates digital ownership based on scarcity and exclusion, which does not align with Minecraft values of creative inclusion and playing together," the company wrote. "NFTs are not inclusive of all our community and create a scenario of the haves and the have-nots. The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players."

The studio said it was also worried about fraud and that third-party NFT technology could result in a loss of assets for consumers, situations that "may end up costing players who buy them."

Surprise! The Postal Service is purchasing more electric delivery vehicles than it had previously said it would. The agency is more than doubling its buy, though it's still far short of electrifying its whole fleet.

The USPS is in the midst of a multiyear process to turn over its fleet of aging and fire-prone delivery vehicles. Its initial order of 50,000 next generation delivery vehicles from Oshkosh Defense included just 10,019 EVs, with the rest being gas-powered. But the agency told Reuters that it would be boosting its total EV purchase to 25,000 delivery vehicles. Overall, at least 40% of USPS's 84,500 vehicles purchased in the coming years will be EVs, by the agency's estimate.

This is the latest development in the Postal Service's ongoing EV drama that's involved Congress, the Environmental Protection Agency, states and nonprofits all hammering the agency over its decision to buy mostly gas-powered vehicles.

In April, the House Oversight and Reform Committee grilled the agency about its failure to electrify its fleet. Despite the pressure then, the agency refused to budge on its plan to purchase tens of thousands of new gas-powered vehicles. Later that month, a group of 16 states and some environmental groups sued USPS for not electrifying its fleet faster.

The agency has cited the cost, its own financial situation and the challenges of using EVs in rural areas as reasons for its gas-powered purchase plan. But its own inspector general refuted some of those issues in testimony before the Oversight and Reform Committee in April. EVs are also generally more cost-effective for a variety of reasons, but particularly now with surging gas prices.

For context, USPS's existing fleet of 217,000 aging trucks is the largest share of the federal government's civilian vehicle fleet. The Biden administration has said it wants to throw the weight of the government behind addressing the climate crisis, including transitioning the entire federal fleet of vehicles to zero-emissions models by 2027. That would help bring EV costs down for the average car buyer, speeding up the transition to electrified transit in the U.S. (Transportation is the biggest source of greenhouse gas emissions in the country.)

The USPS is an independent agency, though, and is run by Trump holdover Louis DeJoy. The financial constraints on the agency are also real, thanks to a 2006 law, and USPS has said it needs more money from Congress to go fully electric. Wednesday's news that it's increasing its purchase of EVs, though, is a sign that the public pressure could be changing its calculus a bit.

Get ready to pay up to share your Netflix account: The streaming service will begin to crack down on password sharing starting next year, the company announced in its letter to investors Tuesday. That's also when Netflix plans to launch an ad-supported tier.

"Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023," the company wrote. The letter also states that Netflix is aiming to launch an ad-supported tier "around the early part of 2023."

Netflix first announced plans to monetize shared accounts and launch a cheaper, ad-supported tier in April. The company struck a deal with Microsoft to sell and power its ads last week.

Netflix executives have said in the past there were an estimated 100 million households who participated in account sharing. The company had already begun a test asking people to pay more for the ability to share their accounts in Chile, Costa Rica and Peru.

On Monday, the company announced a separate test with a slightly different approach: Starting in August, Netflix will ask members in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras to pay more if they want to stream to more than one home.

"We’re encouraged by our early learnings and ability to convert consumers to paid sharing in Latin America," the company said Tuesday.

Netflix also announced Tuesday that it had lost another 0.97 million subscribers in Q2. The company expects to add 1 million subscribers in Q3, compared to 4.38 million added subscribers in Q3 of 2021.

Disclosure: Protocol is owned by Axel Springer, whose chairman and chief executive officer, Mathias Döpfner, is on the board of Netflix.

Google and Oracle data centers in the U.K. were struggling to operate Tuesday as record high temperatures continue to heat up Europe.

According to Google Cloud's service health page, one of its London buildings hosting cloud services for one of its Western Europe regions experienced a "cooling related failure" starting Tuesday morning. The company powered down services in part of that region to fix the issue.

Meanwhile, Oracle is having similar issues. Its service health page said it's working to repair the cooling system in its London data center and has powered down some of its services to "to prevent uncontrolled hardware failures." Oracle said it expects service to be restored today.

"As the operating temperatures approach workable levels, some services may start to see recovery," Oracle's service page said.

Though major data centers often have thousands of gallons of water at their disposal for cooling, they're not immune to heat waves. Prior to Tuesday's outages, an AWS data center in London went out July 10 in what the company called a "thermal event." Some data center operators are even resorting to hosing down their roof-mounted AC units with water to keep working.

Data centers are facing issues, but so, too, are everyday people. The heat wave currently roasting the EU and U.K. is being made worse by climate change, and the effects have been relentless. Hundreds died in Spain and Portugal over the weekend amid the intense heat that topped out at 116.6 degrees Fahrenheit (47 degrees Celsius) and wildfires burning across the countryside. Nuclear power plants were also forced to operate at reduced capacity in France due to overheating river water normally used for cooling.

The epicenter of heat has since moved to the U.K. to start the week, where the nation saw its first-ever 40-degree-Celsius (104-degree-Fahrenheit) temperature reading and has seen fires rage near London. Just 5% of homes in the U.K. have air conditioning installed. There are a number of high- and low-tech solutions that could help beat the heat, a task that will only become more important as climate change increases the intensity and frequency of freakishly hot weather.

This post has been updated with additional context.

Meta released a diversity progress report highlighting its U.S. workforce representation on Tuesday.

The company pledged in 2019 to double the number of Black and Latinx employees in the U.S., and the number of women globally, by 2024. It fulfilled these goals early, Meta writes in the report. Racewise, Meta's numbers stand at 46.5% Asian, 37.6% White, 6.7% Latinx, 4.9% Black and 4% two or more races. The percentages of Black and Latinx employees at Meta still fall below those of the greater U.S. population.

Underrepresented people — including women, people of color, veterans and people with disabilities — make up 46.7% of Meta's global workforce. This is up by about a percentage point from 2021. Women represent 36.7% of Meta's global leadership. Last year, Meta made strides in increasing the number of Black leaders, but its overall representation of women declined slightly.

Meta's report also highlights how remote work is changing diversity numbers. Workers who accepted remote job offers were "substantially more likely" to identify as an underrepresented minority.

The company may be less ambitious with its diversity plans going forward, though. Chief diversity officer Maxine Williams told Bloomberg that Meta's hiring pause and product vision changes mean that it won't issue new diversity goals for now. Instead she will focus on maintaining those numbers.

"Anytime you are in an environment where variables are changing, it makes it hard to know if you’re going to hit your target,” Williams told Bloomberg.

The Securities and Exchange Commission should be going after crypto exchanges that offered XRP, the chairman of the House investor protection subcommittee said Tuesday.

In an oversight hearing closely watched by supporters of Ripple and the XRP cryptocurrency, California Rep. Brad Sherman questioned SEC Enforcement Director Gurbir Grewal on why the agency isn't investigating exchanges that offered the XRP cryptocurrency.

“You've gone after XRP because XRP is a security, but you haven't gone after all the major crypto exchanges that process tens of thousands, if not far more, transactions,” said Sherman, a Democrat representing parts of the Los Angeles metro area. “If XRP is a security — and you think it is, and I think it is — why are these crypto exchanges not in violation of law?"

Whether XRP is in fact a security is subject to one of the most intense ongoing court battles in crypto. The SEC sued Ripple in December 2020, accusing the company of failing to register roughly $1.4 billion worth of XRP as securities. Ripple, however, maintains XRP is a utility token for payments, not a speculative asset, and that it was issued prior to Ripple’s founding.

Grewal said he can’t “talk about what matters we are looking at or not looking at,” but noted the SEC had brought a case against the crypto exchange Poloniex for offering unregistered securities.

Sherman countered, “It's easier to go after the small fish than the big fish, but the big fish operating the major exchanges did many, many, tens of thousands of transactions with XRP. You know it's [a] security, that means they were illegally operating a securities exchange.” He added that many exchanges have stopped offering XRP.

Grewal noted that SEC has beefed up its crypto-focused enforcement team but said it would be inappropriate to comment further.

Sherman said the SEC is “going to have to take on some cases you are not certain of winning.”

Ripple has aggressively fought the case in court and its CEO, Brad Garlinghouse, recently told Protocol the firm would leave the U.S. if it lost. The judge overseeing the case recently ordered the SEC to produce documents related to the case sought by Ripple and called out the SEC for "hypocrisy" in fighting the release.

Shortly after the hearing, Ripple General Counsel Stuart Alderoty called for a "fact check on aisle 2," noting that the mere filing of a case by the SEC does not make XRP a security. "Only the court can make a determination — it's called due process," Alderoty said in a tweet. "This is the pernicious effect of the SEC’s (regulation) by enforcement approach – harming people, markets and American innovation – with unproven allegations masquerading as regulation."

More clarity from lawmakers on securities regulation would be helpful, Sherman acknowledged in closing the hearing, which also covered enforcement of the SEC’s climate disclosure rules and the gamification of investing. “No definition is more important than to define security, since that's what the SEC does,” Sherman said. “Congress really hasn't acted. Courts have acted with the Howey Test, which was not focused on digital assets, as it was written in the 1940s.”

Activision Blizzard now has a second group of employees intent on unionizing after quality assurance testers at subsidiary Raven Software voted to become the first unionized workforce at a major North American game studio. This time, QA testers at another subsidiary, Blizzard Albany, have filed for a union election with the National Labor Relations Board.

The unit is roughly 20 employees, according to a report from the Washington Post. Blizzard Albany is best known as a support studio under its former name Vicarious Visions. The developer work consists mostly of porting games to other platforms and supporting expansions to existing Activision and Blizzard titles, including Guitar Hero, Skylanders, the remake of Tony Hawk's Pro Skater 1 + 2 and Destiny 2 post-launch content.

Last year, Activision Blizzard announced that the studio would rebrand as Blizzard Albany and merged formally with Blizzard to better support the Diablo and Overwatch developer on its upcoming games, a process completed in April. Now, the QA department is looking to unionize to improve work conditions.

The changes workers seek include "competitive and fair compensation, pay transparency, better benefits and improved health care coverage," the worker group said on Twitter, as well as measures to "address disparities in titles and compensation," dealing with periods of mandated overtime, known in the industry as "crunch," and improving processes for reporting misconduct. Activision Blizzard is still contending with multiple legal battles following a sexual discrimination and harassment lawsuit filed by California.

“I firmly believe that having the union is going to give us the power that we need to make our workplace better,” Amanda Laven, a associate test analyst at Blizzard Albany, told the Washington Post. “It’s very exciting to go public with it and hopefully be able to inspire others the way that we’ve been inspired by Raven, and Starbucks and Amazon and all the unions that have come before us."

“We deeply respect the rights of all employees under the law to make their own decisions about whether or not to join a union,” Activision Blizzard spokesperson Rich George told the Washington Post in a statement. “We believe that a direct relationship between the company and its employees is the most productive relationship. The company will be publicly and formally providing a response to the petition to the NLRB.” Activision Blizzard did not respond to the employees' request for voluntary recognition after 19 of 20 employees signed union cards with the CWA, making it likely a union election will occur as was the case with Raven.

The workers at Blizzard Albany are calling their union Game Workers Alliance Albany, following in the footsteps of the group of 28 QA testers at Raven that formed the first Game Workers Alliance chapter with the Communications Workers of America. Raven employees won their NLRB election in May after a roughly five-month period of opposition from Activision Blizzard management, which tried but ultimately failed to expand the union election to all employees in hopes it would diminish support.

This time around, Activision Blizzard may not be as aggressive in its tactics. Since the Raven election, Microsoft, which has agreed to acquire Activision Blizzard in a landmark $69 billion deal, made a public announcement saying it would not block unionization efforts from any of its employees or subsidiaries. Microsoft went even further a few weeks later in signing a historic neutrality agreement with the CWA, legally binding it to its promise not to interfere with labor organizing among its workforce.

The move may have been a strategy on Microsoft's part to help ease regulatory concerns around the acquisition, but it still poses a direct challenge for Activision Blizzard that may force the game publisher to stand down in any efforts to combat the union at Blizzard Albany.

"We respect the right of our employees to make informed decisions on their own,” Microsoft President Brad Smith told the Washington Post in an interview regarding the CWA agreement. "It means that we don’t try to put a thumb on the scale to influence or pressure them. We give people the opportunity to exercise their right to choose by voting … it’s something that’s respectful of everyone, more amicable and avoids business disruption."

Google has announced its plans for Android to comply with Europe's nearly final new competition rules, and the company's approach doesn't involve anything remotely like eliminating its 30% commission on many in-app purchases.

Google, which had extracted its fee by forcing apps to adopt the company's mobile billing system, will let app developers offer users in Europe other payment processing options. The catch is, the "service fee" for employing the alternatives will only be 3 percentage points lower than the current commission.

In the case of the 30% fee that many popular apps face, that means developers would still have to pay — and would still pass onto their users — a 27% charge, although Google argues that the vast majority of apps pay a reduced 15% fee right now.

The new plan, which doesn't even apply to the game apps where so many transactions take place, is a clear challenge to European Union authorities. The latter are in the last stages of approving new competition regulations in the Digital Markets Act, and they have viewed the "app store tax" collected by Apple and Google as one of the main Big Tech practices they want to rein in.

In fact, Apple seems to have pioneered the strategy at work: After competition authorities in the Netherlands ruled the company needed to allow alternative billing for dating apps, the company announced it would do so — and just charge a service fee of up to 27% for the privilege. The Dutch enforcers charged Apple repeated fines as result. The iPhone maker seemed happy to absorb the levies, though, given the worldwide stakes, which include not just enforcement actions and new rules in Europe, but South Korea's landmark app store law and the possibility of new tech competition laws in the U.S.

The mobile OS operators have argued that their fees allow them to invest in privacy and security in a way that makes their environments attractive to apps, which should contribute to the upkeep.

The Federal Housing Finance Agency, the federal agency that supervises and regulates many home loan providers, announced Tuesday the creation of the Office of Financial Technology. The new office is tasked with collecting information on emerging risks in financial technology innovation, relevant to home ownership.

“When used responsibly, fintech has the potential to improve borrowers’ experiences with the mortgage process by reducing barriers, increasing efficiencies, and lowering costs,” said director Sandra L. Thompson. President Biden appointed the director last summer; she worked in the FDIC for 23 years before joining the agency in 2013.

IBuying is the area of proptech that has received the most regulatory scrutiny in recent years, as companies like Opendoor, Offerpad and Zillow bought up about 2% of the American real estate market by the second half of 2021. The companies, however, found their success just as available homes were in short supply and prices rose, disrupting the traditional ecosystem of brokers, developers, realtors and banks that had remained relatively stable for over a decade. Later in the year, Zillow’s bet on iBuying went south after the company over-bought amid a market downturn, and the business model — which other companies, like Opendoor, still say they’re confident in — was put under additional scrutiny.

The office may eventually provide some suggestions for regulation that builds some trust back for iBuying. But other proptechs and fintechs interfacing with the real estate industry may eventually receive guidance, too. Home buying is a tedious process, and innovation around expediting mortgage approvals, providing more flexible financing options for developers, reducing insurance costs and streamlining the housing search are in high demand. Venture Capital invested $4 billion in proptech in Q1 2022, up 41% from Q4 2021.

But it will be some time before any regulation is drafted for the industry. Currently, the agency is soliciting public input from the industry through Oct, 16. Interested parties can submit comments online or via mail.

Man, it's a hot one. TAE Technologies announced on Monday it successfully kept plasma stable at 75 million degrees Celsius, bringing it one step closer to harnessing the power of nuclear fusion.

The company reached the milestone using its five-year-old Norman reactor, which was designed to operate at 30 million degrees Celsius. By reaching 75 million degrees Celsius, it's exceeded its performance goals by 250%.

Simultaneously, TAE also announced that its series G-2 funding round raised a whopping $250 million, bringing its total funding up to $1.2 billion. Investments came from long-term backer Google, in addition to oil major Chevron and the U.S. arm of the Japanese trading company Sumitomo Corporation. The latter plans to partner with TAE to bring fusion power to the Asia-Pacific market.

The company’s goals to replicate the process responsible for the sun’s shine in a controlled environment and keep it stable enough to generate carbon-free energy are ambitious. But the new milestone shows its edging closer to meeting them.

TAE plans to use this influx of cash to construct a new research reactor, dubbed Copernicus at its Irvine facility. Copernicus represents the “penultimate step” to commercializing fusion power, the company said in a press release. The plan, as CEO Michl Binderbauer told Protocol last month, is to demonstrate that the new machine is capable of net energy generation via fusing hydrogen at 150 million degrees Celsius (though the reactor will not produce net energy in the test phase).

Copernicus will also enable TAE to show off its chops when it comes to fusing hydrogen with boron, a process that is non-radioactive. Boron is widely available, and is the “cleanest, safest, most economical terrestrial fuel cycle for fusion, with no geopolitical concerns or proliferation risks,” according to a press release. Copernicus is expected to begin operating around 2025.

“Global electricity demand is growing exponentially, and we have a moral obligation to do our utmost to develop a baseload power solution that is safe, carbon-free, and economically viable,” said Binderbauer in a press release.

TAE, alongside most of its rival fusion power companies, says it intends to generate energy that can be used by the power grid by the latter years of this decade. The company has been pursuing the hydrogen-fusion reactor for 24 years, though, reflecting the challenges to reaching its goals. And given the long-running joke that fusion is always a decade or two away, it's worth taking TAE's advancements seriously but with a grain of salt.

The FBI issued a warning Monday for financial institutions and investors urging them to watch out for fake crypto apps. The bureau said it has identified 244 victims who were defrauded by fake apps and lost a total $42.7 million.

"The FBI has observed cyber criminals contacting US investors, fraudulently claiming to offer legitimate cryptocurrency investment services, and convincing investors to download fraudulent mobile apps, which the cyber criminals have used with increasing success over time to defraud the investors of their cryptocurrency," the bureau wrote in a notice.

The FBI found cyber criminals using the names and other information of legit businesses to lure and then defraud investors. The agency identified fraudulent activity happening under the company name YiBit between last October and May, as well as an incident involving scammers operating under the name "Supay" last November. A third case involved cyber criminals convincing victims to download an app that used the name and logo of an actual financial institution and then deposit crypto into wallets on the fraudulent app.

The notice includes recommendations to help institutions and investors detect and prevent fraudulent activity. It suggests financial institutions should periodically search for their company's name and logo to determine whether they're being used for unauthorized activity and should warn customers of this activity potentially happening. It also tells investors to verify whether an app is legit with its associated company and "be wary" of unsolicited requests to use investment apps.

Crypto scams are rampant: According to the Federal Trade Commission, consumers have lost at least $1 billion to crypto fraud between the beginning of 2021 and March of this year. Fraudulent crypto activity is becoming more common, and much of it originates on social media, the FTC found.

One of the crypto industry's top hedge funds owes 27 companies $3.5 billion, an indication of the extensive connections the firm, Three Arrows Capital, had across the industry. It also shows the wide impact one firm can have when many firms are borrowing or lending from each other. Some of the creditors are themselves in bankruptcy proceedings.

Genesis Asia Pacific Pte Ltd, a unit of the Genesis crypto prime broker, which is owned by Digital Currency Group, is the largest creditor, with a roughly $2.3 billion loan to 3AC, according to the filing.

Genesis had a 80% margin requirement on the loan and has sold collateral related to the loan, according to The Block. Digital Currency Group has assumed some of Genesis' liabilities.

Crypto exchange Voyager, another troubled crypto firm that has filed for bankruptcy, had a loan to 3AC of $350 million in USDC plus 15,250 BTC worth about $680 million at its present value.

Crypto lender Celsius, which also filed for bankruptcy, had a loan of about $75 million in USDC.

Other lenders included FalconX and DRB Panama, the owner of crypto exchange Deribit, among others.

An affidavit attached to the filing by Charles McGarraugh, chief strategy officer of Blockchain.com, another 3AC creditor, says that the co-founders of Three Arrows, Zhu Su and Kyle Davies, made a down payment on a yacht valued at $50 million. Zhu also reportedly is trying to sell a $35 million mansion in Singapore.

Correction: An earlier version of this story misspelled Deribit. This story was updated on July 18, 2022.

The Biden administration is calling the shortage of cybersecurity talent a "national security challenge" ahead of a summit at the White House Tuesday focused on accelerating progress on the issue.

In a news release Monday, the White House cited estimates that there are 700,000 cybersecurity jobs currently open in the U.S. alone.

Tuesday's National Cyber Workforce and Education Summit is expected to include participation from a number of top Biden administration officials, as well as executives from the private sector and "thought leaders" in academia and the cybersecurity community. The summit is being convened by National Cyber Director Chris Inglis, and participants will include Secretary of Commerce Gina Raimondo, Secretary of Labor Martin Walsh and Secretary of Homeland Security Alejandro Mayorkas, as well as Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency.

With the massive cybersecurity talent gap, "America faces a national security challenge that must be tackled aggressively," the White House said in the news release.

Planned discussion topics at the summit include the "need to create and prioritize new skills-based pathways to cybersecurity jobs" in educational institutions and training programs. Notably, the Biden administration pointed out that the U.S. has "an opportunity to build pipelines for historically untapped talent, including underserved and diverse communities" as part of filling open cybersecurity roles.

What the White House release didn't specifically touch on was the need for more employers to create entry-level positions — something that a number of industry leaders have told Protocol is the biggest missing piece for closing the cybersecurity talent and diversity gap.

Too many employers still put their energy into poaching talent from the same pool of the most-experienced people rather than widening the pool by creating entry-level roles, those leaders said. "The talent gap lives entirely in the minds of hiring managers in cybersecurity," Naomi Buckwalter, a cybersecurity professional for two decades, said in a recent interview.

The U.K. in November ordered Meta to sell off Giphy — which it had acquired only the year before — because of competition concerns, which was a big deal for a relatively small acquisition. But U.K. regulators are now going back to the drawing board on their investigation after a judge found gaps in its initial probe.

A U.K. judge ordered the Competition and Markets Authority to conduct another investigation into Meta's Giphy purchase after ruling that the agency didn't consult on some areas of the probe and took out some material that weakened its decision. The CMA plans to wrap up its new review within three months.

“We have agreed to reconsider our decision in light of this finding,” the CMA said in a statement to Bloomberg.

Tech skeptics were thrilled about the CMA's original decision last year, saying it shows increased scrutiny of Big Tech moves. But it hasn't been all smooth sailing since the order: an appeals tribunal upheld the CMA's decision last month, but it also found that the agency didn't inform Meta of Snapchat's Gyfcat purchase for almost a year after it became aware of the ruling. The tribunal planned to consult with Meta and the CMA on how to fix the error.

Meta did not immediately return Protocol's request for comment.

Twitter still hasn't set a date for shareholders to vote on its acquisition by Elon Musk, but it's urging them to approve the deal despite the fact it's suing Musk over trying to wiggle his way out.

A filing Friday updating its proxy statement for the deal added information about the lawsuit Twitter filed Tuesday to compel Musk to carry out his $44 billion takeover and included reams of correspondence between Musk's lawyers and Twitter's.

The correspondence shows increasingly heated rhetoric over the issue of fake or spam accounts, a major point of contention between Musk and Twitter. Despite vowing to "defeat the spam bots" in April, as tech stocks fell and the value of his Tesla holdings declined, Musk began questioning Twitter's disclosures about the percentage of bots that made up its monetizable user base.

Twitter's lawyers pressed Musk on how the requests related to completing the deal: The merger agreement allowed Musk to request information that was helpful for consummating the transaction, not canceling it, as he now appeared to seek to do. In its lawsuit, Twitter argued that Musk was seeking to back out of the deal because he now regretted it given the decline in the market value of tech companies, including his own.

Despite the contentious language exchanged in the lawsuit and the letters revealed in the filing, Twitter still wants to sell itself to Musk, it told shareholders. With the expiration of a customary waiting period for antitrust review, shareholder approval is the last obstacle to getting the deal done.

Russian President Vladimir Putin approved a law Friday prohibiting the use of digital assets as forms of payments in Russia.

The legislation will reportedly prohibit the transfer or acceptance of ”digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset, except as otherwise provided by federal laws,” effectively banning the use of crypto or NFTs as forms of payments.

The bill was submitted to the State Duma in June by the head of the legislature's Committee on Financial Markets, Anatoly Aksakov, and signed into law by Putin Friday. The new law also includes a provision that requires crypto exchanges and providers refuse transactions in which digital assets could be construed as a form of payment.

The Russian government has seen internal conflict on crypto regulation, with various agencies at odds with each other on whether to ban crypto outright or just regulate it. The Central Bank of Russia had called for a crypto ban in January, which the Ministry of Finance opposed, saying instead that “regulation is sufficient to protect our citizens.”

The new law is set to take effect in 10 days.

There's been some speculation that sanctioned Russian companies or individuals might use crypto to avoid sanctions imposed after the country's invasion of Ukraine. But officials have proven savvy in using on-chain analytics to trace transactions, and industry experts have warned that sanctions evaders would be ill-served by trying to use cryptocurrencies. U.S. and EU bodies have even added specific crypto wallet addresses to sanction lists.

Congressional Democrats probing the crypto mining industry's carbon footprint have found what's been clear for awhile: The industry is a massive energy hog that threatens U.S. climate goals. Now, those Democrats are asking the Environmental Protection Agency and Department of Energy to do something about it.

Six Democrats from both the House and Senate asked seven major crypto mining companies for details about their energy use. The results showed that just six of those companies are together responsible for consuming a Houston-sized chunk of electricity. All told, the operations require 1,045 megawatts of power to stay up and running. (The only company not to respond with its energy use totals was Bitfury.)

Many of those companies are also planning expansions. Riot's Whinstone facility in Rockdale, Texas, consumes 350 megawatts of electricity, though it expects to reach 700 megawatts of mining capacity by the end of this year. The Greenidge mine in Upstate New York has 50 megawatts of capacity, but it wanted to grow to 500 megawatts by 2025. Its air pollution permit renewal, though, was recently denied. The report found that all told, the companies covered by the investigation want to add 2,399 megawatts of mining capacity "in the next few years," a total that's greater than the electricity needs of Los Angeles' 1.4 million households.

"The results of our investigation, which gathered data from just seven companies, are disturbing, with this limited data alone revealing that cryptominers are large energy users that account for a significant — and rapidly growing — amount of carbon emissions," the group of lawmakers wrote in a letter to the heads of the EPA and DOE.

Right now, there are no federal laws and few state or local ones governing crypto mining's energy use. But as the U.S. tries to get a handle on carbon emissions and meet President Joe Biden's goal of cutting carbon emissions in half by 2030, some form of oversight of the burgeoning industry is vital.

The group of Democrats — which includes Sens. Elizabeth Warren, Ed Markey, Sheldon Whitehouse and Jeff Merkley, and Reps. Rashida Tlaib and Jared Huffman — called for the EPA and DOE to use the Clean Air Act to prompt disclosures from mining operations about their energy use and carbon emissions as a first step.

The U.S. became a crypto mining hub after China banned the practice in 2021. The lawmakers' investigation and request for regulations would be first steps toward getting future laws on the books to address the industry's emissions. But the U.S. — and the world — needs to get a handle on carbon emissions sooner rather than later. And as the migration of mining operations makes clear, it will take more than one country putting a law on the books to get crypto's carbon footprint under control.

From a missed suicide attempt to an unnecessary visit to urgent care, tech glitches in the integration process of Oracle's Cerner software at U.S. Veterans Affairs hospitals led to serious health consequences, according to a new report published Thursday by the Veteran’s Office of Inspector General.

The new report follows another damning OIG report published a year ago citing problems with integrating electronic health records software from Cerner, which was acquired by Oracle in December for $28.3 billion. The company scored a $10 billion contract in 2018 to update the health and financial records system used by the VA to deliver care to millions of military vets.

Thursday's report provides detailed information on how the Cerner electronic records system deployed at the Mann-Grandstaff VA Medical Center in Spokane, Washington inadvertently sent orders for patient follow-up care into a memory hole. When order information was not recognized as a match by the software, it was sent into an “unknown queue.”

“From facility go-live in October 2020 through June 2021, the new EHR failed to deliver more than 11,000 orders for requested clinical services,” the report reads.

The OIG provided examples showing the impact of this problem on patients. After an order for follow-up care for a homeless patient at risk for suicide landed in unknown queue limbo, the follow-up care never happened. The patient later contacted the VA crisis line saying he had a “razor in hand and a plan to kill himself.” Afterward, he was psychiatrically hospitalized.

Another patient did not receive a compression hose to help with lower leg swelling because the order went into the unknown queue. The patient ended up requiring urgent care for worsening of the edema.

"Of the numerous conclusions from the GAO and Inspector General, this latest report is the most worrisome. Delays and setbacks with government contracts on major IT projects is one thing; patient harm is another,” said Dr. Shravani Durbhakula, a pain physician and anesthesiologist at the Johns Hopkins School of Medicine, in a statement sent to Protocol.

Cerner did not respond to a request to comment for this story.

A report published a year ago by the VA’s OIG showed the main problems stemmed from Cerner’s approach to training VA hospital staff on using the system. It cited “significant gaps in training for business and clinical workflows” and a “lack of clinical knowledge” among Cerner trainers.