Welcome back to the Pirate Wires weekly digest. Every week, we share a brief, lead story at the crossroads of technology, politics, and culture, followed by a storm of links to catch you up on everything that’s happening. Subscribe, or die.

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Good morning, here is a list of major American technology companies and products currently banned in China: Facebook, Instagram, Whatsapp, Google, YouTube, Bing, Twitter, Snapchat, Reddit, Tumblr, Pinterest, Slack, Twitch, Discord, Dropbox, Quora, Medium, Wikipedia, Vimeo, Flickr, Soundcloud, and DuckDuckGo.

Next topic, banning Chinese companies: is it racist when America does it?

Chew on this. Last Thursday, TikTok CEO Shou Zi Chew appeared before the House Energy and Commerce Committee in a grueling 5+ hour hearing to defend the company’s right to exist (if you haven’t caught up, check out TikTok’s Congressional Disaster, my summary for Pirate Wires). Ostensibly, Congress was furious over TikTok’s ongoing Beijing data dump, and believed ByteDance, TikTok’s Chinese parent company, would leak American data again. Given China is a hostile authoritarian superpower in a state of conflict increasingly close to Cold War with the United States, there is concern the company constitutes a national security risk. But people also just seem to really hate tech right now. Altogether, this produced a kind of outrage perfect storm. Chew was obliterated. Reaction, from both TikTok and the media, has been fascinating.

Fresh off the February puff piece press campaign following her “coming out” as genderqueer (she now uses the pronouns “they/them” in addition to “she/her”), TikTok’s COO Vanessa Pappas accused Congress of xenophobia for mulling a ban of the platform. Her charge echoed last summer’s comments from Dondi West, a former member of the U.S. intelligence apparatus now working as a lawyer for TikTok, as well as idiot Congressman Jamaal Bowman. The comments are as baseless as they are ironic, given China, which has already banned all American social media, is an ethnostate currently engaged in genocide. Nonetheless, the point was repeated across social media, and, inevitably, by CNN. But while media sentiment in support of TikTok has been about as lock-step as congressional support of a ban, I am pleased to report it hasn’t all been this stupid.

With no clear direction from the Democratic White House — here rarely out of sync with our largely Democratic media — press takes mostly lacked coherence, which is not to say they’re usually good. But they’re typically identical. Now, in the case of Tok, everyone appeared to be frustrated, but nobody seemed to understand why.

From the LA Times, a TikTok ban is bad for small businesses. From Fox, a TikTok ban is good for Facebook, which is not necessarily bad, but highly suspicious. From the New York Times, Chinese spyware is our First Amendment right. From the Verge, we must preserve the open internet (in America only). From the relentlessly pro-Tok Washington Post, a TikTok ban is un-American (also, American tech is bad). A TikTok ban is bad for Hollywood. A TikTok ban is bad for politicians. Finally, my favorite, a TikTok ban is good… for China. Roughly, the position here is an American ban on Chinese technology would mean America was acting like China, which would itself mean, in some nebulous sense never actually defined, China has “won.” It’s the old “all tech, including malicious spyware, is good” defense — very popular among libertarians.

On the other end of the spectrum, “all tech is bad” has been a popular opinion on the left, parroted to prominence over the weekend by Congresswoman Alexandria Ocasio-Cortez.

Sidestepping the question of China entirely, Ocasio’s position is simply: sure, TikTok is stealing your data, but so is every American company. “Ban all data!” or something.

For my part, I think it’s pretty obvious the CCP will continue tapping ByteDance to spy on Americans. I don’t believe Project Texas, TikTok’s hypothetical China-free version of itself, will stop the ongoing Beijing data dump, nor do I think a sale will fix the problem. But, more importantly, what any of us think about a TikTok sale is beside the point, because a sale needs approval from the Chinese government, and the Chinese government isn’t interested — a perplexing hoop through which TikTok needs to jump given we’ve been told, for years, up to and including last week, the Chinese government has no influence over the company.

In any case, like many tens of millions of people, you probably don’t care about your data. Is Xi Jinping spying on you? Cool, whatever, hope he likes the show. Just keep that crack-like gyrating dance content coming. The risk of targeted manipulation, bribery, corporate and government espionage? None of that matters because China isn’t a threat. The American government only wants to ban Chinese tech companies because China banned American tech companies.

Okay. It is definitely not true that the American government is fighting on behalf of fair competition for American tech companies, but hear me out: if that were true, how would it not be awesome? Just technically speaking, I mean, the American government doing something in America’s interest would be a good thing, right?

Let’s just table Covid, the spycrafts, the metals harvesting, the genocide (I understand this, while horrific, is not a direct threat to Americans, so I’m including it as more of a character witness). Even if China isn’t dangerous, this deal, in which China can sell to America but America can’t sell to China, is just incredibly stupid. And TikTok’s COO just accused me of xenophobia for not wanting Xi Jinping to steal my nudes, so I’ve had my fill of stupid for the day.

There are some good critiques of the TikTok ban. If confined to the language of the proposed RESTRICT Act, for example, a ban might easily backfire. This bill is way too broad. I mostly agree with the Mises Caucus here:

Bi-partisanship is something we so rarely see we forget how rarely it ends in anything good. I’m thinking of the Patriot Act. I’m thinking of the Iraq War. While I’m expecting political consensus to break long before any kind of action is taken against TikTok, I do think it’s important we exercise caution — while removing the cancer. China is a threat, but the greatest threat to America continues to be our own idiocy. I love us, but be vigilant (of us).

MORE CHINA / TOK —

• TikTok CEO: global sex symbol? Immediately following Shou Zi Chew’s brutal appearance before Congress, he was celebrated across TikTok as the unambiguous champion of the exchange. Praise has been effusive, relentless, and absolutely — totally, without doubt — organic. (Pirate Wires)

• TikTok quietly banned, unbanned Enes Kanter Freedom. The Chinese-owned company banned a professional basketball player-turned vocal critic of authoritarians, including Xi Jinping, and then quietly reinstated his account during Thursday’s congressional hearing. (WaPo)

• Utah to require parental consent for minor social media use. In the face of fierce opposition from tech lobbyist and civil liberties groups, Utah’s governor signed into law a bill requiring those under 18 to receive parental consent for use of apps like TikTok and Instagram. (NYT)

• Google blocks downloads of Chinese-owned e-commerce app. The decision comes after malware was discovered in some versions of the app. (WSJ)

• China no longer murdering its billionaires, possibly. Jack Ma heads home, presumably because his life is no longer at risk. (WSJ)

• Tim Cook blessed, unbothered, loves China (Bloomberg)

CHOKEPOINT BANKING CRISIS

Operation Choke Point 2.0, PART TWO: Six weeks ago, Pirate Wires published Nic Carter’s explosive Operation Chokepoint 2.0, laying out the case the Biden Administration was quietly attempting to ban crypto. Shortly after, the U.S. financial system suffered its greatest quake since 2008, and last week Nic returned with the definitive second chapter of this ongoing catastrophe: in its all-out war on crypto, did the US government unwittingly start a global financial crisis?

READ: Did The Government Start A Global Financial Crisis In An Attempt To Destroy Crypto?

Getty Images / Bill Clark

A brief summary from Brandon Scott Gorrell for the TL;DR contingent:

• Amidst the last few weeks of financial chaos, the two most crypto-focused banks, Silvergate and Signature, were forced into liquidation and receivership, respectively. The established narrative is they made “bad bets” and lost, but evidence suggests they were executed.

• In addition to a massive pressure campaign that spanned the US financial regulatory landscape (detailed in Nic’s Operation Choke Point 2.0), regulators verbally guided crypto-friendly banks to reduce their crypto exposure to 15% of deposits, which effectively created a funnel into Silvergate, over-exposing the bank to crypto. This fact combined with the FDIC dramatically increasing its oversight of the bank, the launching of several investigations that aimed to tie it to the FTX failure, and it being cut off from the Federal Home Loan Bank, put Silvergate in a fundamentally fragile position.

• When Silvergate had to sell bonds at a loss after its FHLB facility was allegedly cut off, it undermined confidence in its ability to continue and triggered a fatal run. Crucially, Signature was treated differently than its peers, seized on a Sunday night after SVB's collapse, while for example First Republic was given time to raise after the SVB collapse.

• The effective decapitation of the pro-crypto banks has caused real problems, as Silvergate’s SEN and Signature’s Signet were essential infrastructure powering 24/7/365 dollar clearing for crypto firms, which are now effectively offline or unusable.

• Senator Elizabeth Warren celebrated the takedown of Silvergate, which raises further questions about political motivations behind the events.

• The takedowns of Silvergate and Signature represent a rank lawlessness associated with authoritarian regimes. Shareholders in Signature had $4.3B in equity wiped out with no recourse, raising questions about the role of federal regulators and members of Congress in the bank crisis.

• The failure of these banks is now being represented as a crypto issue, but their failure stems in large part from the regulatory harassment that these banks have endured over recent months, warranting an investigation into the causes of the bank crisis.

Read the full report here.

BROAD TECH

• Lyft co-founders step down (Axios)

• Nikola CEO steps down (Bloomberg)

• Biden bans spyware (checkmate I guess (jk)) (NYT)

• LG dropping $5.5bn on Arizona battery factory (NYT)

• We love a DARPA flying boat (The Debrief)

• Ron Desantitrust? (ProPublica)

Coinbase on notice. The SEC sent Coinbase a Wells notice, which “typically precedes an enforcement action,” CEO Brian Armstrong tweeted (@brian_armstrong). The company’s blog post, titled “We asked the SEC for reasonable crypto rules for Americans. We got legal threats instead,” is well worth the read. (Coinbase)

NetChoice launches new litigation center. The move by the tech industry trade group is a response to heightened pressure facing tech giants in the courts on matters of antitrust and content liability. (WaPo)

Ron DeSantis proposes law to ban CBDCs. The Biden administration is studying the possibility of introducing a central digital bank currency. DeSantis raised concerns over privacy and the diminished role of community banks and credit unions. His proposed legislation would prevent the use of such a currency within the state of Florida. (CoinDesk)

AI

AGI is… here? Microsoft published a paper titled “Sparks Of Artificial Intelligence: Early experiments with GPT-4.” From the abstract: “Given the breadth and depth of GPT-4’s capabilities, we believe that it could reasonably be viewed as an early (yet still incomplete) version of an artificial general intelligence (AGI) system.” (AI Breakfast)

• Adobe drops generative AI toolkit for digital creators (Axios)

• GPT-4 not doing enough censorship, journalists report (Axios)

• Plugins come to ChatGPT (OpenAI)

• Google releases Bard. From The Debrief’s breakdown: “the information it draws from will come directly from the [internet], relying in part on Google’s own search engine and algorithmic capabilities.” (The Debrief)

• AI for absolute beginners. Our beginner’s guide demonstrating how to locally run a language model based on LLaMA is a preview of the inevitable turning point after which LLMs are a commodity. (Pirate Wires)

NATIONAL POLITICS

• #StopCopCity spreads. “Eco-anarchists” are targeting infrastructure and property, vandalizing pro-cop companies across the nation. 60 attacks and counting. (Vice) (Twitter) 

• House passes G.O.P. bill on school culture war issues. The bill would make library catalogs and school curriculums public, and force schools to obtain parental consent before honoring a student’s request to change their pronouns. Probably won’t pass the Senate. (NYT)

• Biden issues first veto. Enabling the government to consider environmental speculation and “social impacts” when investing for federal worker retirement. (AP)

CLOWN LINKS

• Lindsay 👏 Lohan 👏 crypto 👏 scheme 👏 (NYT)

• Lana del Rey’s new album criticized over pastor’s cameo. The Evangelical pastor is considered controversial, as he said homosexuality is a sin “like any other sin,” a religious belief somehow still shocking to gay men who have never left New York City. (Pink News)

Please don’t die:

• Deadly fungus spreading through American health facilities (NBC)

• Tainted eyedrops linked to three deaths (NBC)

• DEA issues alert for flesh-rotting drug laced fentanyl. The laced drug is an animal tranquilizer known as Xylazine — street names “tranq” and “zombie drug” — and causes necrosis (rotting flesh) as well as respiratory depression. Unlike fentanyl, it does not respond to narcan. Fentanyl cut with tranq has been seized by the DEA in 48 out of 50 states. Now more than ever, it’s important to buy your fent from a trustworthy dealer. (NY Post)

Some good news, however:

• Biden admin trying to modernize organ transplant system. The organ transplant system is currently run as a virtual monopoly by a non-profit organization called the United Network for Organ Sharing, which works under contract with the federal government. The Biden administration plans to put that contract up for bid, in an effort to induce competition and innovation. They are also working on a website that will have detailed data about transplants on the hospital-level, to help patients make decisions about where to seek care. (NYT)

Until next week —

– Solana