This story is part of CoinDesk’s 2020 election series exploring questions of information integrity, the rights of digital citizens, the power of centralized platforms, and the future of money.
The 2020 presidential campaign is largely focused on President Trump, the progressive versus centrist wing of the Democratic party and, apparently, according to the New York Times, identifying who broke each candidate’s heart.
Meanwhile, foreign states are known to be targeting our election infrastructure, voters are increasingly concerned about the privacy of their data, and talking points about data and big tech have been rallying cries on the campaign trail for everyone from Andrew Yang to Bernie Sanders and Joe Biden. Whether campaigns are living up to their own talking points is another question entirely. A recent report has found that while the cybersecurity practices of campaign websites hold up to scrutiny, a close reading of privacy policies (or lack thereof) shows some campaigns paying the idea of privacy lip service while simultaneously employing privacy statements that allow for widespread sharing of supporters’ data.
The Online Trust Audit for 2020 Presidential Campaigns, conducted by the Internet Society’s Online Trust Association (OTA), examined all the presidential candidates’ campaign websites for cybersecurity, consumer protections and privacy. The report found several campaigns were lacking in key areas, particularly when it came to privacy.
Campaigns either failed or were placed on “Honor Roll status.” The latter scored 80 percent or higher in the report’s assessment, with no failure in website security, consumer protections or privacy. In its initial report, released in October 2019, the OTA found 30 percent of the campaigns made the honor roll, while 70 percent did not. That’s worse than nearly every other sector the OTA examined in previous reports, including retailers, banks and the federal government. The next-lowest industry was the health sector, but even there, 57 percent of entities audited made the honor roll.
In the initial version of the report, all the campaigns that didn’t make the honor roll failed in the privacy category while two campaigns also had consumer protection failures.
“Overall, we found that campaigns have strong website security, reasonable email and domain protections and poor privacy scores,” concluded the report. “Privacy statements are the biggest concern, causing failure for 70 percent of the campaigns.”
The report found two campaigns had no email authentication, the process that helps recipients verify the sender of a message. But by far the biggest issue was with privacy statements. Four campaigns had no identifiable privacy statement, which the report called “inexcusable;” others included no mention of data sharing (limits or otherwise) or included language that said they’d share data with “like minded entities” or third parties that were not identified (such as the Democratic National Committee).
After this initial report, the OTA contacted individual campaigns and offered to explain their scores as well as how to improve them. Several, including the campaigns of Elizabeth Warren, Julian Castro and John Kevin Delaney, took OTA up on this. Others, including Biden, Tulsi Gabbard and Yang, did not.
The result is that when the OTA re-released the scores in December, the honor roll to failure ratio had shifted from 30-70 to 50-50.
OTA removed the campaigns that dropped out from the data and bolded the names of those campaigns that had graduated from the failure tier. However, improvement was limited.
“Their data-sharing language is either absent or very, very broad,” says Jeff Wilbur, OTA technical director.
Almost all the privacy statements have a line saying the campaigns don’t sell, rent or share your data, he says. Then they go on in several paragraphs to explain all the exceptions . In the political realm this may seem understandable, but Wilbur says it’s still a concern.
“Just because I show an interest in one presidential candidate doesn’t mean that I’m opting in automatically to all the rest of that stuff,” he says. “It seems to be like it’s all or nothing.”
If you were wondering why you randomly started getting urgent emails for fundraising purposes from the Republican or Democratic national committees, it’s likely because you gave money to a campaign or signed up for email updates, thereby launching your data into a rotating crop of third-party vendors and political organizations that will use your information for years to come.
“There is a lot of power and value in the data that’s being collected,” says Maurice Turner, deputy director of the Internet Architecture Project at the Center for Democracy and Technology, an advocacy organization ensuring the internet remains open, innovative and free. “Because of the prevalence of opportunities to micro-target, there is a great incentive to collect more data about visitors about donors, and then be able to share those with other networks.”
Turner says voters might just want to support a single candidate or issue rather than the Democratic ticket writ large. But by supporting one campaign that has data-sharing stipulations in its privacy statements, voters’ information is shared across so many other organizations that they start getting emails and messages from folks they’ve never heard of before.
Campaign privacy statements tend to be boilerplate, according to Turner. Party members are likely to see the same statements over and over again. Campaigns hire a company to run their websites without looking into the details of what the privacy policies entail.
Parham Eftekhari, executive director for the Institute for Critical Infrastructure Technology, a cyber security think tank based in Washington, D.C., says campaigns need to have a higher level of integrity when it comes to these types of efforts, and people should be given an option to opt out of these information sharing practices.
“I believe these campaigns have an ethical, and in some terms moral obligation to do everything in their power to reasonably defend the privacy and the protection of the data they’re collecting,” says Eftekhari.
There is a tension between achieving the political outcomes people want and maintaining control of personal data and privacy. Putting together a multifaceted political coalition, full of sometimes disparate actors who come from a variety of socioeconomic and demographic backgrounds, is a big ask. Personal data allows campaigns, PACs, and others effectively to pursue ad campaigns, fundraising, and get out the vote actions. But the lack of clarity or asterisks identified by the OTA in campaigns’ privacy statements show that engaging with even one campaign can open your personal data up to a bevy of other actors, whether you want them to have it or not.
CoinDesk Q4 2019 Review: A Year in Suspended Animation
It has been over 10 years since the creation of cryptocurrencies, and while clear narratives have emerged to justify their existence, none are decisively supported by data.
For example, charts suggest bitcoin’s use case as a store of value is taking hold among some new investors, who have been shown to hold the asset through price run-ups. However, other metrics such as bitcoin’s correlation to gold suggest that, across the entire body of bitcoin investors, most are using the asset as something far different from “digital gold.”
On ethereum, DeFi has made impressive gains, but the shape of that line and a broader decline in user numbers suggest that the “web 3.0” narrative is still in its infancy.
Released today, the CoinDesk Quarterly Review surfaces the key data, trends and events shaping crypto markets, in a 45-slide presentation format. It evaluates three different use cases for crypto across more than 25 different data sets. The results of this analysis suggest a dominant narrative for bitcoin and alternative cryptocurrencies has yet to emerge.
Readers of this report are introduced to key metrics for tracking shifts in investor interest and global usage of cryptocurrencies. These include bitcoin’s “whale” population, UTXO age distribution, exchange volumes and more.
The data-driven takeaways include:
1. Not everyone who stood to profit sold.
Holders of bitcoin who last transacted in the second half of 2017 held through the end of 2019 despite rises in market price that would have made it profitable to sell. This suggests there is investor sentiment for bitcoin as a store of value rather than as a speculative asset. The bump in bitcoin holdings that last moved in late 2018 represents a movement of assets into a more secure form of storage by cryptocurrency exchange Coinbase in December 2018.
Coinbase’s bitcoin-fiat markets, among the world’s most popular for purchases of bitcoin in USD, GBP and EUR, have stalled since 2018. According to data from Nomics, bitcoin-fiat volume has dropped from an all-time high of $46.54 million in 2018 to $44.92 million in 2019. This market is primarily used by investors who view bitcoin as an alternative store of value from traditional currency, and can be thought of as a barometer for buy-and-hold sentiment.
2. Bitcoin ‘whale’ population remains healthy.
By the end of 2019, there were 2,100 bitcoin addresses holding more $8.5 million worth of BTC each. The growth in these types of addresses, also called bitcoin “whales,” is a rough indicator of large investor participation in cryptocurrencies. Since 2018, the bitcoin whale population has been multiplying at rates not seen since the early 2000s when bitcoin was trading below $100, or 1/85th of its current market price.
Off-chain activity on regulated cryptocurrency exchanges in the U.S. does not show similar signs of increased large investor participation in cryptocurrencies. Cryptocurrency data provider Skew reported a decline in volume for both the CME and Bakkt’s bitcoin futures open interest markets in 2019. These markets, unlike that of other popular cryptocurrency exchanges such as Coinbase and Binance, are designed to offer institutional investors regulated instruments for exposure on bitcoin. Institutional participation in cryptocurrencies may be lagging due to persisting imbalances in the underlying liquidity of these assets across various exchanges.
3. DeFi blooms in winter.
One of the breakout successes of 2019 was decentralized finance (DeFi) applications. Collectively, these decentralized apps (dapps) managed over $680 million-worth of cryptocurrencies by the end of Q4, according to cryptocurrency data provider DeFi Pulse. Looking at the most popular sub-category of DeFi, cryptocurrency lending, user traction on ethereum continued to climb even when market price for ETH started to decline.
In other dapp categories such as gaming and gambling, the number of applications and users decreased in 2019. Cryptocurrency data provider DappRadar reports fewer dapps and dapp users in Q4 2019 than Q1. “In general, we’re seeing a rise in the quality of dapps and over time that means fewer dapps launched and fewer dapps attracting a large audience,” said Jon Jordan, communications director of DappRadar. It would seem outside of the DeFi boom on the ethereum blockchain, other dapp platforms and use cases are struggling to grow.
For more charts and analysis, download the full CoinDesk Quarterly Review.
SEC, CFTC Charge XBT Corp. With Selling Unregistered Swaps for Bitcoin
Digital asset custodian Koine Money Ltd. has secured an electronic money license from U.K. regulators, while it prepares for the eventualities of a future Brexit by seeking permissions abroad.
On Thursday, the U.K’s Financial Conduct Authority granted Koine an e-money license – known as an EMI license – allowing Koine to issue its own digital cash and provide other payment services to institutional clients.
The EMI license, however, does not certify or sanction Koine’s digital asset custodian services, the company said in a statement. Those services “are currently outside the UK regulatory perimeter,” Koine said.
For the moment Koine’s EMI license applies across European markets while the UK remains in the E.U. That would change if and when Brexit comes to Britain; the current leave date is set for January 31, 2020.
A Koine spokeswoman told CoinDesk that Brexit would not impact their business approach.
“We believe in the importance of the UK as a focal point for our line of business, to the extent that we have applied to additional permissions in the country for securities. However, we retain our international vision and, in applying for licenses in Luxembourg, a major financial center in its own right, this provides optionality in the event of an adverse Brexit scenario.”
She further noted Koine is also considering pursuing licensing in Abu Dhabi and across the U.S.
In a company statement, Koine CEO and Chairman Hugh L. Hughes said that the EMI licensing clears the way for more digital asset developments:
“With our EMI authorisation now issued by the FCA, we are rapidly moving to implement the market infrastructure necessary to support institutional participation in the digital assets marketplace.”source.coindesk
Meet CoinDesk Next Week in Tokyo
A reminder that CoinDesk will be visiting Tokyo and we’d love to meet some of our readers for an informal gathering on Monday, October 14 at 6 p.m. We’ll be working with CoinDesk Japan on this small and informal event and we know a typhoon is coming so maybe it might not be so nice outside.
We haven’t chosen the official location yet but are open to suggestions for venues – if things are messy in the city we might just convene at a bar or karaoke place. Please fill out the recommendation form below. In addition to the meetup, we are interviewing locals making an impact in the region. Please include your nominations in the form as well.
Because this isn’t sponsored – we simply want to meet you guys – we’re happy to pick up a few beers and a little food for the group.
Anyone can and should attend and we’d love to talk about your work in crypto, your startups and your ideas. Please fill out this form if you’d like to chat on video about the Japanese ecosystem.
If you have any questions or concerns you can email [email protected] or ping her at @dariasukovatitsyn on Telegram. Anyone can and should attend.
Tokyo image via Shutterstock
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