iTech

Is the President right to refuse the Binance pledge?

An analysis of the legislative and regulatory scenario concludes that given the current record and supervisory posture, the legal and governance case for refusal is robust.

Malta’s Community Chest Fund (MCCF) has declined a long-pending Binance crypto pledge – originally around € 200k in 2018 BNB and now quoted around € 39m – citing reputational and governance concerns about the provenance and disbursement method. Reporting indicates Binance wanted funds sent directly to individual patients’ wallets, bypassing MCCF’s ordinary controls; the President publicly called it a “bogus donation,” while the Prime Minister urged reconsideration. Court filings between MCCF and Binance over related disputes have recently been settled out of court, but the charity has now walked away from the offer.

The legal risk in accepting the donation turns on Malta’s Anti-Money Laundering (AML)/ Countering the Finance of Terrorism (CFT) framework and the charity’s fiduciary and data-protection duties. Under the Prevention of Money Laundering Act and subsidiary regulations, Malta’s Financial Intelligence Analysis Unit (FIAU) sets and enforces AML obligations and can receive suspicious transaction reports; while a state charity may not itself be a “subject person” like a bank or Virtual Asset Service Provider (VASP), it must not facilitate laundering and would typically rely on obliged intermediaries (banks/payment providers) to conduct KYC/KYB, source-of-funds checks and ongoing monitoring. If red flags arise, accepting the funds could expose the charity to regulatory and reputational harm and, in extreme cases, criminal risk tied to receiving proceeds of crime.

Verification of the legality of sources in this context is feasible in principle but not straightforward. Binance itself has faced repeated statements from Malta’s financial regulator that it is not authorised in Malta under the Virtual Financial Assets (VFA) regime; today the MFSA is also the competent authority for crypto-asset supervision under the Markets in Crypto-Assets Regulation (EU). Because Binance is not licensed in Malta, Maltese authorities cannot rely on local prudential/AML supervision of the donor, making enhanced independent verification prudent. Technically, blockchain analytics can trace wallet histories, but “clean” on-chain flow is not a legal guarantee of legitimacy; only obliged entities’ due diligence, sanctions screening and, where necessary, law-enforcement intelligence can comfortably de-risk the funds.

Practically, the authorities with roles here are:

  • the FIAU (national AML/CFT authority) for guidance, intelligence and potential directions;
  • the MFSA (supervision of VFA/MiCA service providers, public warnings on unlicensed activity) given the donor’s status;
  • the Sanctions Monitoring Board for EU sanctions compliance if any listed persons, chains or jurisdictions are implicated;
  • the Police/Asset Recovery Bureau and Attorney General for proceeds-of-crime issues; and,
  • at sector level, the Office of the Commissioner for Voluntary Organisations where charities’ governance intersects with financial integrity.

If MCCF were to reconsider the pledge, it would need a bank or regulated payment channel willing to complete full Customer Due Diligence (CDD)/ Enhanced Due Diligence (EDD) and source-of-funds/wealth checks on the donor wallets, structured in a way that respects GDPR (particularly the prohibition on disclosing special-category health data without a proper legal basis), rather than direct-to-patient transfers demanded by the donor.

Given the current record and supervisory posture, the legal and governance case for refusal is robust.

The Political Reaction

The Prime Minister and the Leader of the Opposition seem to have a common point in their reaction to the news of the President’s refusal of the ‘bogus donation’. The Prime Minister stated in a direct way that the current regulatory framework should be sufficient to clear the funds for use. He was unable to hide his evident anger at what he (almost) called “being purer than the pope” (he changed tack last minute, probably realising it was not the best pitch to make. He did argue however that other countries who criticise Malta would probably welcome Binance themselves, admittedly without giving one clear example of where this is the case – relegating this statement to spin and speculation rather than concrete fact-based evidence.

Alex Borg on the other hand was more evasive, preferring to throw responsibility on regulatory authorities. He seemed to imply (just like the PM) that 39 million was too big an amount to risk losing. He stressed that the work of regulatory authorities is crucial in this sense and should the Binance donation pass scrutiny with a clean bill of health then much use could be made of that amount. Not exactly agreeing with the president then and more in line with Abela’s take though with less determined tones.

What to make of it then? I would say that the optics count for a lot. Binance’s history is tainted with a number of cases in France and the US concerning money-laundering and money laundering for terrorist groups. Their legal issues related to money laundering have resulted in significant financial penalties and ongoing scrutiny, reflecting broader regulatory challenges in the cryptocurrency sector. This kind of history means that an analysis as that conducted above would end in a strong legal and governance case for refusal. It is indeed worrying that the two leaders are so quick to dismiss this history in a “Malta qatt ma irrifjutat qamħ” sort of way.

In your face book

Only last week I was following the uproar in the UK about “abusive tweets” with a measure of disbelief. We’d been there before – how seriously should twitter and social media statuses be taken? Should the tools who abuse the tools be punished? The UK government was pretty serious about regulating twitter especially to protect people from threats. I had mixed feelings about it all – how seriously should we consider status updates and tweets?

Then came Salamis. We’ve all heard how hordes of Maltese intelligentsia swarmed onto Cecilia Malstorm’s facebook page with all form of abuse. It was shock therapy as we had never seen it. You did have the suspicion during the past election that the importance given to the internet and its content by the general citizen collective had taken a weird and surreal twist. I am sure that there is a huge study to be made in marketing and advertising to the particular niche that we know as the Maltese crowd but still…

The PLPN moulded their supporters into an Orwellian vortex worthy of quite a study. There was a false sense of empowerment (say what you like and you will be heard) and there was an abuse of the propagandistic side of the medium. The majority of the citizens had not caught on to the emerald and noise and still believed that the Wizard behind the curtain was the most powerful thing in Oz. We all know how things proceeded since then: the nationalist party imploded choking on a nut while the labour party segued onto government by words and tweets.

The worst offender is the PM himself what with his non-sensical twitter account that is about as politically proper as Frankie Boyle on a trip. Then there are the abusers of the media – such as that DJ turned architect – who adds a new “blog” and shoot “aphorisms” without batting an eyelid. Which brings me to facebook. PLPN candidates bored us mental with their daily “tying my shoelaces” updates during the election. The impression was that they would “listen”. Sure. What they did do once the election is over is forget any semblance of institutional decorum, bury any notion of rule of law and murder any possibility of quiet government.

Do you blame the noisy bunches on Facebook now? Add to that the fact that they are the bunches who are most encouraged by this government’s ridiculous bandwagon grandstanding – oblivious to the hopelessness behind the moves and oblivious to the fact that they are just pawns in this power game.

So yes, we had a lot of noisy, uncouth energumens flooding to Malstorm’s page. First reaction: So what? As someone put it succinctly, the Greeks have been directing much verbal abuse in the direction of anything EU/German. Second reaction: So what? It’s not like we did not know that a huge chunk of our voting electorate was clueless about rights, politics and social interaction. Facebook is just throwing an ugly window open onto a part of our society.

It’s our society being thrown back in your face. In your face book actually.

Facebook, Privacy and Deactivation (a list)

I chose midnight last Sunday as the time and day to deactivate my Facebook account. My personal Facebook account that is, if anything such as a personal Facebook account really exists. I’ve been asked “Why?” and been warned “Don’t” as though the issue of whether or not to have a FB account is a matter of life and death. Meanwhile the bliss of deleting the FB app from both my iPhone and the iPad was followed by a tiny semblance of withdrawal symptoms – would I be suddenly “out of the loop”?

Deactivation is not deletion. I still have the option to reactivate and log back in as though nothing ever happened. “We were on a break”. But why deactivate? I don’t have one reason. I have a series of unordered thoughts that have been running through my head for a while and here they are in no particular order (that’s the unordered bit).

1. The Not So Social Network

When Mr Mark Zuckerberg decided that Facebook should go public he added a letter to the IPO (initial public offering) application that he filed. In that letter he spoke in glowing terms of Facebook’s mission. Facebook is not a company he said. Facebook has a social mission, he said. The mission, he said, was to make the world more open and connected.  Connections, change, networking. The long, long letter is full of this kind of vision. It was Google’s “Do no Evil” with an added bout of logorrhea. You would not be investing in a company but in a social mission. Zuckerberg did not tell us why Caritas, AA, the Red Cross, Medecins Sans Frontières – to mention a few – haven’t yet listed their social missions on some stock exchange.

But hey. This is the internet. The internet is now linked to financial bubbles and at 38 dollars a share buying a part of facebook just meant going along with the trend/myth of dot com investments. Kudos to Mr Zuckerberg for managing to sell his “social mission”. In one week facebook shares have plummeted and “16 million dollars have been shed in market capitalisation”. I don’t know if that is good or bad. I don’t care. I just find the idea that Facebook has any kind of social mission in mind very very risible.

The first thing I don’t like about Facebook is the way it is about anything other than your ability to control the spread of information about yourself. Sure, you choose what to put on Facebook but then again – do you? There is a huge gap between the promise of freedom of networking and the constant impulse of FB to get you to share, share, share.

The first thing I don’t like about Facebook is that it is sharing via force feeding.

2. The Sheep’R’Us

When you first registered on Facebook it was to be connected. Then we added and added friends. Then, at a time when Google Circles were still a pie in the sky we had no way to distinguish between your College Alumni, your Sport Friends and the freaks who post weird stuff on walls late at night. For a while it got interesting. Campaigns went viral on facebook, the like button provided instant gratification that had not been seen on the internet since the early days of Yahoo Categories and we just posted and posted. Faster internet meant more possibilities of “sharing” video, photo, apps. And the games? Do you remember the first time you opened Farmville, spent five minutes trying to grow some shit then wondering “what the fuck?”. Some people still use farmville.

Do you remember the pokes? They too seem to have fucked off to a worse dimension. We were left with walls, posts, and “threads” of absolute bull. Because whether five idiots meet on the street or whether they meet virtually their collective contribution to humanity is just about equal. It’s not like every chat on facebook has to be a Zizek-Hitchens debate but you could sense a collective dumbing down suddenly beginning to take shape. It was not even the “good morning I’m having toast” crowd that finally did it. It was the general feeling that having an opinion suddenly meant that once was right. And facebook reinforced that. Photos, opinions, videos merged into one miasma of a collective skip.

And you got lost in the crowd. The second thing I did not like about Facebook was that anything goes.

3. The Expression Lie

If I do reconnect to Facebook it will be to reconnect a blog to an audience. Unfortunately almost 80% of J’accuse traffic was sourced from Facebook. The worst part of that deal was that readers stopped commenting on the blog. They preferred the comment on Facebook. You tried to integrate the two but it never was the same. Once again you could sense the attention span of readers going berserk – like that of a pack of flies suddenly discovering the morning pile of dogs’ droppings on a suburban pavement. Facebook had created the skim reader. Twitter’s metre of 160 words had become the generally accepted limit for an attention span.

Does Facebook empower with information? Maybe. What we definitely do is form our input channels into a constant monotone dreg. We tend to network with like minds, like ideas and similar opinions. Collectively these little facebook packs will look for information they approve of and enjoy. Before long they will have moulded their own virtual world of inputs where all the news and all the opinion they read stops challenging them, stops provoking them. Their cerebrum has become an added appendix to the senses without any feedback. Colours, sounds and (if it could) tastes. Without the appreciation born of provocation.

Facebook the champion of expression. Fuck that. One big massive unlike.

4. Time

I found it much easier to quit smoking than to quit facebook. Because facebook had become that distracted timefiller. An iphone app that vomits post after post of nonsense skipping from the 1,000 likes to save the orphan in Brobdingag to the viral video of the pope on a loo to the latest breaking news from parliament. Worse still it gave you a reality check. The ugliest quirks that people had managed to keep away from their social interaction were suddenly and inexplicably hung there for all to see. You suddenly had intimate photos – not of breasts or testicles – but of bedrooms and studies. What was previously one’s own sancta sanctorum was suddenly posted and bared for all to see. The weakest of individuals who were unable to master even the most basic rules of social interaction felt “empowered” when they shared their framed certificates in the bedroom, their corny poses by the sea and in some cases they even fought out their personal fights like some UFC Championship battle.

And for every “empowered” citizen struggling to grasp the concepts of basic PR there would be some ruthless, uninhibited facebook voyeur/stalker who would scour the walls for information to snigger at and make fun of. Bitchery too became an art. The packs of supposedly educated wolves were unleashed on the beginners and found it oh so easy to point out to the crude reality of their inexperience with real social interaction. It’s not like it was difficult, and I am guilty of having engaged in the ruthless behaviour myself. Stalkers unleashed on the unknowing victims were like foxes released in a chicken pen. There is no great intelligence required to pull a photo off the wall of some unsuspecting facebook user and to blog about the social shortcomings that have been so unabashedly and unwittingly put on display.

Insofar as politicians and their daily tomfoolery with the medium is concerned there would be no amount of wolves that would suffice to tear the arrogant peacocks to bits. For you’d expect a politician to be able to handle the dos and donts of simple social networking. Still. The time that facebook stole from us can never be recovered with 1,000 other initial public offerings. The fourth thing I do not like about facebook is the amount of time wasted on it before discovering that it is another cynical mirror of our society.

7. Not the full list

There’s more to this list. Much more. But there’s a limit to how long a post can be. I’ll be stopping here for now. Will elaborate later. Do not be surprised if my personal account is reactivated soon. In the meantime J’accuse still has a facebook page where you will find most updates.

I’d like to hear what you think about facebook, privacy and more. I doubt anyone will comment though. You’re probably all busy catching up on facebook.

 

 

As the Mayans Logged Off

To this day, the Guatemalan Mayans remark that outsiders note down things not in order to remember them, but rather so as not to remember them. Today’s world of hyperconnectivity often leads us to wonder whether our reliance on technology for knowledge and time management is beginning to “soften” our brains and make them less sharp. The Mayans might be right after all.

Cutting off from the technology and information highway for three weeks offered a good opportunity to experience full reliance on the cerebellum. It was not just organisational zen but also a break from “information anxiety”. Information anxiety is that feeling that seems to be building up daily as we gain access to more information and begin to choke when we realise that we cannot possibly take it all in at one go.

The feeling begins with a glance at an interesting link or headline on a website. Possibly this comes certified with a hundred “likes” – the modern-day stamp of recommendation. Your mental sieve takes note and the urge to take that particular path on the ether begins to take shape. But there are other links on the page – other bits of news or information that are vying for your attention. What can you possibly do?

There’s different techniques and approaches. You could hoard links on some bookmarking website while convincing yourself that some time in the future a gap in the time-space continuum will allow you to “catch up”. Incidentally the “catch up” business is rather lame. Is it a race? Is there really somebody in the lead who has read tomes upon tomes on all kinds of subjects? Does a modern day walking, talking and web-browsing equivalent of the famed Alexandrian library exist?

You could also skim through summaries or subtitles getting the general gist of the content while being subconsciously painfully aware that you are fast becoming the internet equivalent of a jack of all trades and master of none. That would also mean learning to live with that ghost of a feeling that during your “skimming” you missed out on the really crucial, interesting part that was really worth reading. That’s information anxiety all over again.

Or you could step off the train. Step off and watch the carousel zip before your eyes as statuses are updated in your absence, news items are created, revised and rewritten while you are in a blissful corner of informational oblivion. Peeping in from time to time to assuage the withdrawal symptoms you will connect less and less with the threads and webs that have formed in your absence. You will worry less. Care less even. Anxiety what anxiety?

Before you know it, information gathering might even take its good old familiar linear form. You will have regained your sanity and your calm. It might not last very long and you might soon be wishing to be back sucking at the nipple of information overdose but trust me, the kick you get from that momentary lapse of reason might even get addictive and before you know it you could be stepping off the train.

And this time it will be for good.

The Hard Drive

While shopping for goods to fill the Christmas stockings you might have gone to some IT product store and had a good look at the prices for hardware goods. If you were shocked at the sudden hike in price for external drives for your PC/Mac or in the price for certain laptops you might be glad to know there is a reason for that. As L’Essentiel reports, we are witnessing the butterfly effect from the floods in Thailand. Companies producing hard drives and laptops have had their production practically halted and the slowdown has caused a lower supply: enter the magic of market forces.

This kind of news is an eye opener for those among us who tend to think that prices of goods and the operation of the market is entirely dependent on some paper-pushing Ministers’ decision. The same applies for those among us who believe that markets and even national economies can ever operate again in isolation.

And if a series of floods in Thailand can effect the purchasing habits in a medium-sized French town I am baffled at how some commentators can still shout hurray at David Cameron’s choice of isolating Britain from the decisions that will be taken from now on to consolidate the European Union’s (and it’s Single Market) position economically and on the world stage.

Cameron thinks he drove a hard deal. A hard drive? Sure, but with expensive consequences.