Start Up No.1813: the weird world of crypto stans, Iran reaches nuclear capability, the alarms ignored before Uvalde, and more

After 14 years, Sheryl Sandberg is leaving Facebook. Insiders say she’d been losing influence for a long time. What’s next? CC-licensed photo by TechCrunch50-2008TechCrunch50-2008 on Flickr.

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A selection of 9 links for you. Leaning sideways. I’m @charlesarthur on Twitter. Observations and links welcome.

Sheryl Sandberg leaves Facebook. She’d been losing power for months • Business Insider

Kali Hays and Claire Atkinson:


When Facebook became Meta Platforms last year and shifted its focus to the metaverse, Sheryl Sandberg, the number 2 executive, had little involvement in what was the largest strategy change in the company’s history.

Sandberg’s absence raised eyebrows internally, given CEO Mark Zuckerberg’s intense focus on this new path. If this was where Zuckerberg was heading, why was his closest executive confidant so detached from the project?

…She’s been infrequent on group calls, too, or quieter than she once was. And with Zuckerberg’s extensive traveling during the pandemic, the two have been rarely seen together at the office, according to these people. Some even wondered in recent months whether the two executives had stopped their hours-long meeting every Friday – a staple of their leadership over the past decade or more.

“My sense has been Sheryl is checked out,” one investor in the company for many years said.

Another former high-ranking Facebook employee said her exit has been a long time coming, “At this point, it’s literally more surprising that she was still there than she’s leaving,” the person said.

Although her exit is being publicly described by the company as a resignation on her part, another manager-level employee was adamant she had been asked to leave. “I did not expect her to be fired,” the person said.

Another agreed, saying her exit has been in the works for months, noting this is likely why she has been noticeably less present on major company endeavors. This person also said her public missteps of recent years at some point became too much of a negative risk for the company. From her arguments that the Jan. 6 insurrection in the US Capitol was not organized on Facebook to a recent report that she successfully and directly pressured The Daily Mail to drop a story on her then boyfriend Activision founder Bobby Kotick.

“She kept saying stupid shit in public that made the company look bad,” a company director who left recently said. “Everyone has been wondering when she’s leaving.”


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They used my identity to flog a doomed cryptocurrency – and then things got weird • The Guardian

Alex Hern found his name being used to promote a “shitcoin” of no value or use; when he pointed this out in the Telegram channel, its hyped value collapsed :


Shortly after the collapse, I got an email I wasn’t expecting – from the ProtonMail account that had pretended to be me. I’d emailed over some questions, but wasn’t expecting a reply. What do you say to the person whose identity you stole?

The answer, it seems, is “a marketing pitch”. The developer told me that “the community has passed a critical part of this experiment … We follow your work and writings and are sorry if anyone took that as you were behind the coin. The main thing is you were reached through the block chain only. It’s not in anyway a scam.”

I asked how they could deny trying to scam people into thinking I was involved. They said they’d intended “Guardian” to be taken in the sense that they were the Guardians of the project. “I also follow your work closely so the names went well together … I never said you were involved. I guess it’s like vs Mickey@protonmail. Is mickey@protonmail a scammer if he builds a theme park? We don’t know.”

I thought the impasse was just the natural result of me speaking to a brazen huckster, but the more I asked around, the more it became clear that this was more like two people speaking at cross purposes. The still anonymous devs are sincere that they aren’t scamming anyone, because the meaning of “scam” in the world of shitcoins is necessarily narrow. When the base expectation is that every coin will crash at some point, and none of them have any real value beyond marketing puff and community momentum, how can simply lying about who backs a coin really be a meaningful scam?

To the dev, my accusation that they were scamming people was a serious charge. It implied that they had hidden code in the coin that would allow them to take people’s money in a way outside the rules of the game – perhaps by suddenly printing millions of tokens to flood the market, or locking it up to prevent anyone else from selling. By contrast, spreading falsehoods about who’s backing the token is well within the rules of the game.


That, however, wasn’t the end of the story by any means. Things then got Life Of Brian-style weird.

Anyway, it’s totally the future of the internet.
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Former OpenSea employee arrested, charged with NFT insider trading • NBC News

Kevin Collier:


A former senior employee at the internet’s largest NFT trading platform has been arrested and named in the government’s first case alleging insider trading of digital assets, the Justice Department said Wednesday.

Nate Chastain, the former head of product at New York-based OpenSea, is accused of buying NFTs soon before the company planned to feature them on its homepage, profiting from their exposure and his company’s apparent endorsement, according to the Justice Department.

NFTs, short for nonfungible tokens, are digital assets rooted in the same basic technology as cryptocurrencies, and provide a way to prove digital ownership. Popularity of NFT artwork exploded during the pandemic, creating an estimated $40 billion market last year.

Charging documents allege that Chastain laundered at least 45 NFTs in 2021, each time selling them for two to five times what he had just paid for them.

An OpenSea spokesperson said the company had investigated Chastain over the incidents “and ultimately asked him to leave the company.”


Totally the future of the internet.
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Tech experts urge Washington to resist crypto industry’s influence • Financial Times

Scott Chipolina:


Harvard lecturer Bruce Schneier, former Microsoft engineer Miguel de Icaza and principal engineer at Google Cloud Kelsey Hightower, are among 26 leading computer scientists and academics who have signed a letter delivered to US lawmakers heavily criticising crypto investments and blockchain technology.

While individuals have made similar warnings about the safety and reliability of digital assets, it marks a more organised effort to challenge the growing influence of crypto advocates who want to resist attempts to regulate the frothy sector.

“The claims that the blockchain advocates make are not true,” said Schneier. “It’s not secure, it’s not decentralised. Any system where you forget your password and you lose your life savings is not a safe system,” he added.

“We’re counter-lobbying, that’s what this letter is about,” said signatory and software developer Stephen Diehl. “The crypto industry has its people, they say what they want to the politicians.”

A recent analysis of the US Congressional Lobbying Disclosure database by Public Citizen, a consumer advocacy group, revealed the number of lobbyists representing the crypto industry increased from 115 to 320 between 2018 and 2021, and the money spent on lobbying for the crypto sector quadrupled from $2.2m to $9m in the same period.

…The industry’s advocates claim cryptocurrencies provide the answer to a series of macroeconomic problems facing society, from providing banking services to millions worldwide without access to traditional financial institutions, protecting financial privacy and giving those beset by inflation an opportunity to store wealth.

But in the letter seen by the Financial Times, the technologists write: “We urge you to resist pressure from digital asset industry financiers, lobbyists and boosters to create a regulatory safe haven for these risky, flawed and unproven digital financial instruments.”


Bear in mind that the 26 scientists aren’t getting VC money, or being paid, and won’t get rich from either outcome.
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Iran has enough uranium to build an atomic bomb, UN agency says • NBC News

Dan de Luce:


Iran has accumulated enough enriched uranium to build a nuclear bomb, according to new findings from the United Nations atomic agency.

The International Atomic Energy Agency also said in a separate report that Iran has failed to provide credible explanations about nuclear material found at several sites in recent years, raising questions about the nature of its nuclear work.

The IAEA’s two reports could set the stage for a showdown at a meeting next week of its 35-nation board of governors, as Iran has demanded the watchdog wrap up its probe into uranium particles found at three undeclared locations in the country since 2019.

The UN nuclear watchdog said that Iran’s stockpile of uranium enriched to 60% had grown to 43.3kg (95lb), which represented an increase of nearly 10kg (22lb) compared to three months ago.

Experts said that the stockpile would provide roughly enough material for an atomic bomb if Iran took the additional step of enriching the uranium to 90% purity. Moving from 60% to 90% would not pose a technical challenge for Iran, according to arms control experts.

“Iran has now accumulated enough enriched uranium to be able to quickly produce more than a significant quantity of HEU (highly enriched uranium) for one bomb,” said Daryl Kimball of the Arms Control Association think tank. “The time it would take them to do that can now be measured in days, not months or weeks.”


So Trump’s brilliant plan to end the JCPOA and reimpose economic sanctions didn’t work at all. Wonder if this will attract an Israeli air strike, as it previously did on a Iranian nuclear facility in June 1981. (Apparently they’re just practising at the moment. Very Top Gun Maverick.)
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Before Uvalde, a platform fails to answer kids’ alarms • Platformer

Casey Newton:


Aside from a handful of private messages, the Uvalde shooter appears not to have much used Facebook. That and Instagram were once the default platforms for making threats like these, but new platforms are growing in popularity with young people. The Uvalde shooter liked one called Yubo, created by a French company called Twelve App. It’s a “live chilling” app similar to Houseparty, the app that Meerkat became after helping to launch the live-streaming craze in the United States in 2015.

It’s also apparently quite popular, with more than 18 million downloads in the United States alone, according to the market research firm Sensor Tower.

Like Houseparty, Yubo lets users broadcast themselves live to a small group of friends. The twist is that Yubo focuses on making new friends — finding people with similar interests and letting them chat. Particularly young people. “Yubo is a social live-streaming platform that celebrates the true essence of being young,” the company says. (Perhaps for that reason, its seems to have attracted more than its share of older men and their unwanted sexual advances.)

In the days after the massacre, reporters discovered that Yubo appears to have been the shooter’s primary social app. He used it, among other things, to threaten rape — and school shootings.

…Yubo told the network [CNN] that it is cooperating with the investigation, but declined to offer any details on why the shooter was able to remain on the platform despite having been reported for making threats over and over again.

It can seem shocking that a person who repeatedly makes violent threats, and is reported for doing so to the platform, fails to see any consequences. And yet for years now, children have been telling us that this is a regular occurrence for them.


Newton’s key point is that children say that again and again, they report people for breaking the rules; again and again, those people quickly appear back online. So what’s the point of the reporting tools? Yubo may find itself in some hot water.
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We can upgrade Brexit and ease the cost of living by going back to the Single Market • Politics Home

Tobias Ellwood was a government minister from 2017 to 2019:


Political distance from Brussels has been achieved. This is not up for question. However, economically speaking, there is vast room for improvement. The OBR calculates, in its current form, that Brexit is reducing our GDP by 4%. This compares to around 1.5% caused by Covid.

Put another way: our exports to Europe have shrunk by £20bn. From the fishers who can no longer sell their Scottish salmon, to the farmers undercut by unchecked imports, to Cheshire cheesemakers running into £180 health certificates, even to the City which can no longer sell financial services to Europe, sector after sector is being strangled by the red tape we were supposed to escape from.

Total business investment across the entire United Kingdom economy stalled after 2016 and is 10% down on 2019. European Union workers are turning their backs on the UK, leaving vital gaps in our workforce. Low investment means lower growth. No wonder the IMF forecasts growth for 2023 as half the advanced economy average. 

And then there’s the unresolved issue of the Irish border. Current plans to bin the Northern Ireland Protocol could trigger a trade war with the EU (causing further economic harm) and is alienating the United States, our closest security ally.

As a recent YouGov poll indicates, this is not the Brexit most people imagined, with the majority believing Brexit has gone badly. There is appetite to make improvements – not U-turns but course corrections.

In a nutshell, all these challenges would disappear if we dare to advance our Brexit model by re-joining the EU single market (the Norway model). Leaving this aspect of the EU was not on the ballot paper, nor called for by either the Prime Minister or Nigel Farage during the 2016 referendum. There was, however, much discussion about returning to a “common market,” which is exactly what I propose.


He also points out that at a stroke this would sort out the row over Northern Ireland’s trade with the EU and UK. Unfortunately he voted to Remain in the EU (Boris Johnson fired him on taking over the party in summer 2019), so this has little chance of being taken seriously by the Tory party. A pity, because it’s eminently sensible. And “upgrade Brexit” is clever wording.
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Missed payments, rising interest rates put ‘buy now, pay later’ to the test • WSJ

AnnaMaria Andriotis and John Stensholt :


The young industry [of buy now, pay later on zero interest] finds itself in a tricky spot at a time when the economy is slowing and, some fear, headed for a recession. Buy-now-pay-later companies boomed when consumers were flush with cash and buying goods at a feverish pace. How they fare in a downturn, when savings evaporate, spending slows and bad debts mount, is untested. 

To weather the storm, Afterpay and Zip are slowing their new originations. 

“We are putting a real focus on sustainable growth, strong unit economics and, critically, accelerating our pathway to profitability,” said Zip co-founder and Global Chief Operating Officer Peter Gray.

Klarna last week said it plans to lay off about 10% of its staff. It also has tightened lending standards “to reflect this evolving market context,” a spokeswoman said.

Affirm Chief Executive Max Levchin has sounded a more upbeat note. Buy-now-pay-later plans like Affirm that don’t charge late fees will be in greater demand during a downturn, he said on an earnings call in May. “It is our mission to improve people’s lives, and we will be prepared to meet this demand—but again—our approach is only to extend credit that we believe can and will be repaid,” he said.

The buy-now-pay-later business took off in a post-financial-crisis world of cheap funding and low delinquencies.

They rely less on—and in some cases bypass altogether—traditional credit scores and reports. That makes them appealing to people with limited savings and low credit scores. Subprime consumers accounted for about 43% of shoppers who applied for payment plans or loans at retailers’ checkout between the fourth quarter of 2019 and 2021, according to credit-reporting firm TransUnion, though they only made up about 15% of the US adult population.


Ranjan Roy, who takes turns writing the Margins Substack with Can Duruk, likes to talk about the Age Of ZIRP – the latter acronym standing for “zero interest rate policy”, which meant lots of cash chasing any sort of return because there was none to be had in the bank. BNPL companies strike me as very much Age Of ZIRP businesses. But that time has gone. Questionable how well they can survive.
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I have a great Wordle start word – it’s just a bit rude • The Irish Times

Róisín Ingle:


while I was very late to Wordle, it’s now become a daily ritual that I can’t seem to quit. I resisted for ages, until a dyslexic friend of mine started sending me her results on WhatsApp delighted with herself. Her joy at being able to complete the word puzzle despite her dyslexia was infectious and now most mornings start with our little exchange of Wordle results.

…So chances are you probably know all you will ever need to know about Wordle but, hang on a minute, do you know about the Marian Keyes Method (MKM)? If you are a twitter user, you may well know about this method which was invented (patent pending) by best-selling author Marian Keyes. But something us media people tend to forget or wilfully ignore is that not everybody is on twitter, so it’s reasonable to assume many of you will not know about the MKM.


Keyes is a wonderful person, and this is a wonderful read. Even if you’ve given up on Wordle, or don’t play it, or do play it, this should lift your day. (Thanks Niall for the link.)
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• Why do social networks drive us a little mad?
• Why does angry content seem to dominate what we see?
• How much of a role do algorithms play in affecting what we see and do online?
• What can we do about it?
• Did Facebook have any inkling of what was coming in Myanmar in 2016?

Read Social Warming, my latest book, and find answers – and more.

Errata, corrigenda and ai no corrida: none notified

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