US Treasury asks regulators to take more action against crypto scams

The Treasury Department is keenly aware that crypto scams and hacks remain serious problems, and it’s pressuring the rest of the US government to respond. As The Washington Postnotes, the Treasury has issued a report calling on other federal regulators to further crack down on scams and other illegal crypto activity. Officials want agencies to “expand and increase” investigations and enforcement, issue clearer guidance and help crypto users understand both risks and the reporting tools at their disposal.

In all cases, the Treasury asked for more coordination between government divisions. The department also asked for greater transparency on illegal activity to help spot trends in scams and other crimes.

The tougher stance is necessary given the dangers, according to the report. While proponents argue crypto can democratize financial services by making them more affordable and accessible, the Treasury found that there wasn’t much evidence to support the claim. If anything, the department found that low-income households were particularly vulnerable to ripoffs — 29 percent of crypto investors had an annual income below $50,000, according to Federal Reserve Board data.

It’s not clear that the findings will lead to decisive action. The Treasury didn’t outline a concrete strategy for battling crypto scams and security breaches, and regulators have their own sometimes-conflicting views of how to govern digital assets. The Securities Exchange Commission sees most crypto tokens as securities it can monitor, while the Commodity Futures Trading Commission unsurprisingly wants to treat tokens as commodities. Although the bureaus might not be fighting, this report doesn’t do much to establish common ground.

US border forces are seizing Americans’ phone data and storing it for 15 years

If a traveler’s phone, tablet or computer ever gets searched at an airport, American border authorities could add data from their device to a massive database that can be accessed by thousands of government officials. US Customs and Border Protection (CBP) leaders have admitted to lawmakers in a briefing that its officials are adding information to a database from as many as 10,000 devices every year, The Washington Post reports. 

Further, 2,700 CBP officers can access the database without a warrant and without having to record the purpose of their search. These details were revealed in a letter Senator Ron Wyden wrote to CBP Commissioner Chris Magnus, where the lawmaker also said that CBP keeps any information it takes from people’s devices for 15 years. 

In the letter, Wyden urged the commissioner to update CBP’s practices so that device searches at borders are focused on suspected criminals and security threats instead of allowing “indiscriminate rifling through Americans’ private records without suspicion of a crime.” Wyden said CBP takes sensitive information from people’s devices, including text messages, call logs, contact lists and even photos and other private information in some cases. 

While law enforcement agencies are typically required to secure a warrant if they want to access the contents of a phone or any other electronic device, border authorities are exempted from having to do the same. Wyden also pointed out that travelers searched at airports, seaports and border crossings aren’t informed of their rights before their devices are searched. And if they refuse to unlock their electronics, authorities could confiscate and keep them for five days.

As The Post notes, a CBP official previously went on record to say that the agency’s directive gives its officers the authority to scroll through any traveler’s device in a “basic search.” If they find any “reasonable suspicion” that a traveler is breaking the law or doing something that poses a threat to national security, they can run a more advanced search. That’s when they can plug in the traveler’s phone, tablet or PC to a device that copies their information, which is then stored in the Automated Targeting System database.

CBP director of office of field operations Aaron Bowker told the publication that the agency only copies people’s data when “absolutely necessary.” Bowker didn’t deny that the agency’s officers can access the database, though — he even said that the number was bigger than what CBP officials told Wyden. Five percent of CBP’s 60,000 personnel have access to the database, he said, which translates to 3,000 officers and not 2,700.

Wyden wrote in his letter:

“Innocent Americans should not be tricked into unlocking their phones and laptops. CBP should not dump data obtained through thousands of warrantless phone searches into a central database, retain the data for fifteen years, and allow thousands of DHS employees to search through Americans’ personal data whenever they want.”

Two years ago, the Senator also called for an investigation into the CBP’s use of commercially available location data to track people’s phones without a warrant. CBP had admitted back then that it spent $500,000 to access a commercial database containing “location data mined from applications on millions of Americans’ mobile phones.”

FTC wants to protect gig workers from ‘unfair or deceptive’ algorithms

The Federal Trade Commission is making its own bid to protect gig workers against exploitation. The regulator has adopted a policy statement detailing how it will tackle gig workers’ problems. The FTC plans to step in when there are misrepresentations about pay, costs, benefits and work terms. Officials also expect to intervene with “unfair or deceptive” algorithms, harsh contracts and anti-competitive behavior such as wage fixing and monopoly-creating mergers.

The Commission said the classification of workers wouldn’t affect enforcement, so companies can’t avoid repercussions by classifying people as contractors instead of employees. Violators may have to pay fines and change their practices, and the FTC could partner with other government bodies (such as the Justice Department and National Labor Relations Board) to address issues.

There are gaps. It could be difficult for the FTC to prove algorithm-driven abuse, for instance, and it’s not clear which non-contractual “restraints” might hurt workers’ freedom of movement. However, this could still serve as a warning to gig companies that might hide steep operating costs, fight unionization efforts or collude with rivals to keep wages low.

The FTC isn’t alone in hoping to improve the lot of gig workers. A bipartisan measure in Congress, introduced to the House and Senate this February, is meant to provide portable benefits to gig workers. Last year, the Labor Department revoked a rule that made it harder to protect those workers’ labor rights. States and cities have also filed lawsuits and otherwise taken efforts to bolster working conditions. However, the FTC’s policy provides an extra, nationwide safeguard that might further discourage attempts to exploit the gig economy.