Category Archives: Information

DeviantArt Botched Their Launch Of An AI Art Generator

DeviantArt launched an AI art generator that appears to have opted-in all of the artwork on DeviantArt’s website. I suspect that the result of this decision will encourage many of the artists on DeviantArt to pull their content off if the site as quickly as they can.

Engadget reported that DeviantArt created an AI art generator called DreamUp, and is promising “safe and fair” generation for its creators.

According to Engadget, the website says one of artists’ main concerns about AI is that their work may be used to train artificial intelligence models, which means the generator could spit out pieces in their style without their consent. In an attempt to give artists control over their work, DeviantArt is giving them the ability to choose whether or not the tool can use their style for direct inspiration.

Kotaku reported that DeviantArt is a website that has survived multiple generations of the internet because it does one thing and does it well: it lets artists upload and share their work. That’s it! So it’s both funny and more than a little tragic to see the site try something new last week, only for it to be the worst thing imaginable, implemented in the dumbest way possible.

According to Kotaku, that thing was, of course, AI-generated art, something that sounds cool in theory but which in practice has been little else but a chance for tech goons and grifters to steal art, kid themselves into thinking they’re artists and/or deprive working artists of work.

Also according to Kotaku, DeviantArts’ blog post was ostensibly an introduction to a service that let users “create” their own AI art on DeviantArt, has to spend most of its time saying “actually its fine this isn’t terrible”, because it knew in advance a huge number of users would take one look at the legal and ethical complications involved and say “this is terrible!”

More than one person on Twitter sounded the alarm to let artists know that their DeviantArt work had been automatically opted-in to the DreamUp AI. Some gave instructions about how to opt-out of that.

The comments on the post about DreamUp provide a clear example of why DeviantArt shouldn’t have done this. Comments include:

“u did something dumb people are leaving deviantart because of this”

“Why, why did you want to destroy this website? I saw a lot of people deleting there [sic] gallery only because you steal there [sic] art for your stupid Ai. I hope you going to find a way to fix all the damage you did :( All you did actually, is Killing this website.”

“I can’t belive [sic] Deviantart support ai generated art. I’m desapointed [sic] with you Deviantart team, i really thought you guys cared about artists.”

“Yeah no I’m deleting my account.”

In my opinion, DeviantArt made a huge mistake by automatically opting-in the art created by the artists on their site without the artists’ permission to do so. That was an incredibly stupid thing to do, and I expect DeviantArt to lose the vast majority of the content creators on its site who no longer trust it to protect their artwork.

Remitly is a very horrible Company

Remitly a service that can be used to send money overseas, recently canceled my account, saying that I had broken their terms of service. For the past several years, I have used the service during covid to send money to friends overseas that had needed some extra help. It was with friends that I had established in-person friendships with them in the past. The amounts were not significant, well under $100 in all cases. All told, over the past three years, probably under a thousand dollars.

This service cannot be trusted to send money, and while it was very easy to use, they seem to cancel accounts and are unwilling even to say what possible infraction caused the account to be canceled. You cannot trust companies like this that just out of the blue say you are no longer wanted as a customer. They have been reported to the local state fraud department. They should not be allowed to operate if they are discriminatory in their business practices.

While it is understandable some may use the service for questionable activity, I cannot allow a company to get by when it was being used in good faith and not used to send money for illicit activities.

American Executives Working In China Affected By U.S. Chip Restrictions

American workers hold key positions throughout China’s domestic chip industry, helping manufacturers develop new chips to catch up with foreign rivals. Now, those workers are in limbo under new U.S. export control rules that prohibit U.S. citizens from supporting China’s advanced chip development, The Wall Street Journal reported.

At least 43 senior executives working with 16 publicly listed Chinese semiconductor companies are American citizens, according to an examination of company filings and official websites by The Wall Street Journal. Many of them hold C-suite titles, from chief executive to vice president and chairman.

On October 9, the Biden Administration imposed new export restrictions on advanced semiconductors and chip-manufacturing equipment in an effort to prevent American technology from advancing China’s military power. Those restrictions require licenses for exports of many advanced technologies to Chinese entities deemed to be working against the U.S. national security interests.

The Wall Street Journal reported that for many senior executives at Chinese companies, the rule will likely force them to decide between their jobs and their U.S. citizenship or permanent resident status. The rules require all U.S. persons to apply for a license to continue working in Chinese advanced chip development.

According to The Wall Street Journal, Beijing-based Naura Technology Group co. and Dutch equipment maker ASML Holding NV, have suspended their American employees from continuing work that could now be restricted while they seek clarity on the rules, the companies have said.

Other companies affected by the restrictions include AMEC, one of China’s largest chip-making equipment vendors, GigaDevice Semiconductor, which makes flash memory chips, and KingSemi Co., which produces the most advanced coating and development equipment in China and supplies giants including Taiwan Semiconductor Manufacturing Co.

Bloomberg reported that Chinese President Xi Jinping pledged his nation will prevail in its fight to develop strategically important tech, underscoring Beijing’s concern over a US campaign to separate it from cutting-edge chip capabilities.

According to Bloomberg, Xi said the world’s No. 2 economy will speed up innovation in areas that are vital to “technology self-reliance,” adding that “China will move faster to launch a number of major national projects that are of strategic, big-picture, and long-term importance”. Bloomberg reported that Xi did not give details on those efforts.

While it is currently unclear exactly what China intends to do in regards to chip-making, it is obvious that the U.S. restrictions are taking their toll on not only China, but also on some American workers who are employed by China’s technology companies. At a glance, it appears that the Biden administration’s restrictions are working as intended.

Biden Proposal Could Lead To Employee Status For Gig Workers

The Labor Department on Tuesday unveiled a proposal that would make it more likely for millions of janitors, home-care and construction workers and gig drivers to be classified as employees, rather than as independent contractors, The New York Times reported.

The New York Times noted that companies are required to provide certain benefits and protections to employees, but not to contractors, such as paying a minimum wage, overtime, a portion of a worker’s Social Security taxes and contributions to unemployment insurance.

According to The New York Times, the proposed rule is essentially a test that the Labor Department will apply to determine whether workers are contractors or employees for companies. The test considers factors such as how much control workers have over how they do they jobs and how much opportunity they have to increase their earnings by doing things like offering new service. Workers who have little of either are often considered employees.

The U.S. Department of Labor posted a news release in which it stated the following:

“The U.S. Department of Labor will publish a Notice of Proposed Rulemaking on Oct. 13. To help employers and workers determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act.

The proposed rule will provide guidance on classifying workers and seeks to combat employee misclassification. Misclassification is a serious issue that denies workers’ rights and protections under federal labor standards, promotes wage theft, allows certain employers to gain an unfair advantage over law-abiding businesses, and hurts the economy at-large…”

Specifically, the proposed rule would do the following:

  • Align the department’s approach with courts’ FLSA interpretation of the economic reality test
  • Restore the multi factor, totality-of-the-circumstances analysis to determine whether a worker is an employee or an independent contractor under the FLSA.
  • Ensure that all factors are analyzed without assigning a predetermined weight to a particular set of factors.
  • Revert to the longstanding interpretation of the economic reality factors. These factors include the investment, control and opportunity for profit or loss factors. The integral factor, which considers whether the work is internal to the employer’s business, is also included.
  • Assist with the proper classification of employees and independent contractors under the FLSA.
  • Rescind the 2021 Independent Contractor Rule.

Obviously, there are some companies who want to push back against this proposed rule. Lyft was among them, and posted the following in their blog:

“Today the Department of Labor released a proposed rule. There is no immediate or direct impact on the Lyft business at this time. The release today will allow for 45 days of public comment. This is just the first step in what is likely to be a longer process before any final rule or determination is made.

Importantly, this rule:

  • Does not reclassify Lyft drivers as employees
  • Does not force Lyft to change our business model
  • Is similar to the approach the Obama Administration used to determine employee status. This approach previously applied to Lyft and app-used companies and did not result in reclassification of drivers
  • Was expected on day one of this Administration…”

CNBC reported that the proposed rule could raise costs for companies like Lyft, Uber, Instacart, and DoorDash that rely on contract workers. According to CNBC, the proposed rule sent stocks of gig companies down.

Overall, I expect this proposed rule to fail to go into affect. In 2020, California made a similar rule requiring reclassification of contract workers. Voters later approved of a ballot proposition that exempted ride-hailing companies from being affected by the rule.

U.S. Department of Treasury Took Actions Against Bittrex

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $24 million and $29 million, respectively, with Bittrex, Inc. (Bittrex), a virtual currency exchange based in Bellevue, Washington. This is OFAC’s largest virtual currency enforcement action to date.

It also represents the first parallel enforcement actions by FinCEN and OFAC in this space. Investigations by OFAC and FinCEN found apparent violations of multiple sanctions programs and willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) and suspicious activity report (SAR) reporting requirements. These enforcement actions emphasize to the virtual currency industry the importance of implementing appropriate risk-based sanctions compliance controls and meeting obligations under the BSA. The failure to take action can result in violations of OFAC and FinCEN regulations and expose exchanges and others in the virtual currency industry to potential abuse by illicit actors.

“When virtual currency firms fail to implement effective sanctions compliance controls, including screening customers located in sanctioned jurisdictions, they can become a vehicle for illicit actors that threaten U.S. national security,” said OFAC Director Andrea Gacki. “Virtual currency exchanges operating worldwide should understand both who – and where – their customers are. OFAC will continue to hold accountable firms, in the virtual currency industry and elsewhere, whose failure to implement appropriate controls leads to sanctions violations.”

“For years, Bittrex’s AML program and SAR reporting failures unnecessarily exposed the U.S. financial system to threat actors,” said FinCEN Acting Director Himamauli Das. “Bittrex’s failures created exposure to high-risk counterparts including sanctioned jurisdictions, darknet markets, and ransomware attackers.Virtual asset service providers are on notice that they must implement robust risk-based compliance programs and meet their BSA reporting requirements. FinCEN will not hesitate to act when it identifies willful violations of the BSA.”

The press release states that Bittrex has agreed to remit $24,280,829.20 to OFAC to settle its potential civil liability for 116,421 apparent violations of multiple program sanctions. As a result of deficiencies related to Bittrex’s sanctions compliance procedures, Bittrex failed to prevent persons apparently located in the Crimea region of Ukraine, Cuba, Iran, Sudan, and Syria from using its platform to engage in approximately $263,451,600.13 worth or virtual currency related transactions between March 2014 and December 2017.

The press release also stated that Bittrex has agreed remit $29,280,829.20 for its willful violation of the BSA’s AML program and SAR requirements. FinCEN will credit the payment of $24,280,829.20 as part of Bittrex’s agreement to settle its potential liability with OFAC. FinCEN’s investigation found that, from February 2014 through December 2018, Bittrex failed to maintain an effective AML program. This included deploying inadequate and ineffective transaction monitoring on its platform resulting in significant exposure to illicit finance. Further, Bittrex failed to file any SARs between February 2014 and May 2017, a period of over three years.

To me, it sounds like Bittrex either intentionally chose not to do the things that would have prevented them from having to settle with both OFAC and FinCEN, or the company hoped that it wouldn’t be noticed by the U.S. Department of Treasury. Either way, it is clear that Bittrex is going to be paying a very large amount of money due to their inadequate actions.

CNN Has Abandoned It’s NFT Project

On Monday afternoon, as pointed out by Parker Molloy, CNN ended its big Web3 project by announcing, “We have decided that it’s time to say goodbye to the Vault by CNN.”, The Verge reported.

Parker Molloy tweeted: “Just saw that CNN announced the end of its bizarre NFT market where they’d sell NFTs of news stories.”

CNN tweeted the following from its @Vaultbycnn account: “News of our own to share”. It was followed by a screenshot that provided an explanation:

Fellow collectors –

The Vault team is honored to have partnered with amazing journalists, producers, artists, photojournalists, and collectors from all over the world during our time together, but we have decided that it’s time to say goodbye to Vault by CNN.

Vault was originally launched as a 6-week experiment, but the support and engagement from our community let us expand this project into something much larger. Thank you to each of you for your interest and engagement in what we built together.

At CNN’s core is a spirit of innovation and experimentation, going right back to our founding in 1980. We learned a lot from our first foray into Web3, and we are excited to carry Vault’s concepts around community storytelling into future projects.

While we will no longer be developing or maintaining this community, the Vault NFT collection will live on. Head over to our Discord server for more on that.

Thank you for joining us for a great year of journalism, art, and community.

– Vault by CNN

According to The Verge, the Discord channel for CNN’s NFT project informed owners that while the Vault website will “undergo changes,” it will remain available for them to view their collections and use its marketplace. Reactions from the community included shock, disappointment, and a few posters saying they planned to contact their lawyers while accusing CNN of a “rug pull”, which in crypto terms applies when a development team unexpectedly yanks support – and funds – from a project, leaving the people who bought in with nothing.

The Discord message also informed holders of CNN’s plan to “burn” unsold NFTs, which it says will make the ones they hold rarer, and thanked collectors for joining the “experiment.” CNN publicist Garett Cowan tells The Verge that the six-week experiment mentioned in the message was an internal test leading up to the June 2021 public launch.

For what it’s worth, The Verge reported that Vault by CNN lasted 16 times as long as CNN Plus.

Personally, I have no interest in spending money on NFTs. That said, I am aware that there are people who want to buy them. It seems reasonable that some of the people who bought NFTs from CNN are upset about the abrupt ending of Vault by CNN.

PayPal Claims It Never Intended To Fine Users For “Misinformation”

PayPal said it had no intention fining customers for spreading misinformation, after attracting criticism for publishing a new user agreement outlining such a plan, Bloomberg reported.

According to Bloomberg, the issue gained traction over the weekend after the company published policy updates prohibiting users from using the PayPal service for activities identified by the company as “the sending, posting, or publication of any messages, content, or materials” promoting misinformation, in an Acceptable Use Policy due to kick in on Nov. 3. A penalty of $2,500 could be imposed for each violation, according to the update.

The notice included “incorrect information,” a spokesperson for PayPal said in a statement to Bloomberg News. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy”.

Bloomberg also reported that PayPal’s shares tumbled as much as 5.3% to $85.43, the biggest intraday decline since July 26. They dropped 4.7% to $85.90 at 9:48 a.m. New York.

Gizmodo reported that PayPal was caught in a firestorm of conservative backlash over the weekend for daring it say it would not allow its services to be used to promote misinformation. Now, the company has walked everything back, and further claimed that policy was one big misunderstanding.

According to Gizmodo, several conservative outlets reported that PayPal had updated its Acceptable Use Policy with a notice that starting Nov. 3, the company’s prohibited activities would include “the sending, posting, or publication of any message, content, or materials” promoting disinformation and hate speech or otherwise causing harm. Those who violated the policy could have been hit with a $2,500 fine against their PayPal account, according to information detailed in the initial AUP changes.

PayPal retracted a the notice over the weekend, and in a statement to Gizmodo a company spokesperson wrote:

“An AUP notice for the U.S. recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. We’re sorry for the confusion this has caused.”

The thing I’m wondering about is what, exactly, happened over at PayPal? Was the messaging about imposing a $2,500 fine for each violation promoting misinformation really what PayPal intended? Did that wording get into the AUP due to a disgruntled writer, seeking some sort of revenge on the company? Was the proofreader on their day off?

This situation must be a costly and very embarrassing problem for PayPal to try and cope with. The company that actually posted about fining people for posting misinformation certainly appears to have posted misinformation themselves. The irony in trying to walk back their own misinformation is something.