Year: 2018 Page 3 of 8

By: Sarah Alberstein

It seems that data breaches are all over the news these days, but what exactly is a data breach? According to Norton Security, a data breach is a “security incident in which information is accessed without authorization.”[1] In 2016, the most common information stolen in data breaches were “full names, credit card numbers, and Social Security numbers.”[2] As consumers in an ever-evolving technological landscape, the risk of having such personal information stolen can be alarming. This alarm is only solidified by what seems to be a steady increase in such breaches.

There were 1,300 data breaches in 2017.[3] By July of 2018, there were already over 600 data breaches.[4] What’s more, almost 50% of the breaches in 2018 were “of businesses related to retail, tourism, transportation, utilities, and other professional services that most of us use on a regular basis.”[5] Some of the businesses affected include: Macy’s, Adidas, Sears, Kmart, Delta Airlines, Best Buy, Saks Fifth Avenue, Lord & Taylor, Under Armour’s fitness app, Panera Bread, Forever 21, Whole Foods, Gamestop, Arby’s, Ticketfly, and Facebook.[6] With the frequency of these breaches and the types of industries impacted, it seems that the odds of having your data stolen is relatively high.

There have been some legislative efforts to combat data breaches, and to make consumers more aware when such data breaches occur. Beginning in 2010, individual states began enacting Security Breach Notification Laws which require “private or governmental entities to notify individuals of security breaches involving personally identifiable information.”[7] Security Breach Notification Laws typically include provisions describing which entities must comply with the law, what constitutes personal information, what constitutes a breach, notice requirements, and any exemptions.[8] Now, in 2018, all 50 states have enacted Security Breach Notification Laws.[9] Additionally, all 50 states have “computer crime laws” that target crimes committed using a computer, and some states are individually strengthening their data breach laws by requiring business managing personal data to implement additional security practices like security training, periodic audits,  and centralizing statewide cybersecurity oversight.[10]

Despite this, companies may still attempt to cover up breaches, keeping consumers in the dark. In 2016, the ride-hailing service, Uber, experienced a “major data breach…that exposed the personal information of 57 million people.”[11] This information included names, cellphone numbers, and email addresses.[12] Rather than notifying its Users, Uber paid the hackers a $100,000 ransom to conceal the breach.[13] Uber did not provide public notice of the breach until a year later in 2017.[14] In September 2018, Uber agreed to pay a staggering $148 million in a settlement between Uber, all 50 states, and the District of Columbia, and Uber has promised to develop a new data security policy.[15]

While there is legislation in place, and companies seem to be held responsible for data breaches, there are some things individual consumers can do on their own in order to protect their data. This includes things like reviewing a company’s privacy policy before providing your information, using complex, secure passwords, monitoring your back accounts, checking credit card reports, install security software, back up your files, and occasionally wiping your hard drive.[16] It seems that the legal landscape is constantly playing catch-up with the advancement of technology, but hopefully legislation like Security Breach Notification Laws and the efforts of individual consumers will bring a sense of security to the technological Wild West.

 

[1] What is a Data Breach?, Norton, https://us.norton.com/internetsecurity-privacy-data-breaches-what-you-need-to-know.html.

[2] Id.

[3] Rebecca Nanako Juchems, Enough is Enough: 2018 has Seen 600 too Many Data Breaches, Medium (July 24, 2018), https://medium.com/@AxelUnlimited/enough-is-enough-2018-has-seen-600-too-many-data-breaches-9e3e5cd8ff78.

[4] Id.

[5] Id.

[6] Dennis Green & Mary Hanbury, If you Shopped at These 16 Stores in the Last Year, Your Data Might Have Been Stolen, Business Insider (Aug. 22, 2018, 5:49 PM), https://www.businessinsider.com/data-breaches-2018-4#arbys-16; David Bisson, The 10 Biggest Data Breaches of 2018…So far, Barkly Blog (Jul. 2018), https://blog.barkly.com/biggest-data-breaches-2018-so-far.

[7] Breach of Information, National Conference of State Legislatures, http://www.ncsl.org/research/telecommunications-and-information-technology/overview-security-breaches.aspx; Security Breach Notification Laws, National Conference of State Legislatures, http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx.

[8] Security Breach Notification Laws, National Conference of State Legislatures, http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx.

[9] Id.

[10] See Pam Greenberg, Taking Aim at Data Breaches and Cyberattacks, National Conference of State Legislatures (Nov. 2017), http://www.ncsl.org/research/telecommunications-and-information-technology/taking-aim-at-data-breaches-and-cyberattacks.aspx.

[11] Dan M. Clark, $5.7M Slated for Pa. in Uber Data Breach Settlement, The Legal Intelligencer (Oct. 25, 2018, 2:40 PM),  https://www.law.com/thelegalintelligencer/2018/10/25/5-7m-slated-for-pa-in-uber-data-breach-settlement/.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Rebecca Nanako Juchems, Enough is Enough: 2018 has Seen 600 too Many Data Breaches, Medium (July 24, 2018), https://medium.com/@AxelUnlimited/enough-is-enough-2018-has-seen-600-too-many-data-breaches-9e3e5cd8ff78; What is a Data Breach?, Norton, https://us.norton.com/internetsecurity-privacy-data-breaches-what-you-need-to-know.html.

Image Source: https://wattswebstudio.com/blog/

By: Brandon Larabee

Some of the ethical dilemmas of using artificial intelligence to address criminal justice issues are familiar to anyone who watched “Person of Interest.” The CBS science-fiction show revolved around the efforts of a team of human beings and “The Machine” — an artificial super-intelligence — to stop crimes before they could happen.

In the real world of criminal justice and the legal system, though, problems not anticipated by “Person of Interest” are cropping up with algorithms are used to predict criminal behavior. Where The Machine was relentlessly rational and unfailing (unless being interfered with), real-world machines are increasingly facing questions about whether they produce outcomes just as biased as the humans who build them.

As with many controversies in the public sphere, a counter-backlash is brewing. Writing recently for Wired, Noam Cohen argued that algorithms (and the computers that crunch the numbers) could as easily be sources of justice as of injustice. Cohen highlighted reporting by The New York Times that eventually led some New York City district attorneys to be more lenient with low-level marijuana offenses.[1]

“But imagine if we turned that spigot of data and incisive algorithms toward those who presume to judge and control us: Algorithms should be another important check on the system, revealing patterns of unfairness with a clarity that can be obscured in day-to-day life,” Cohen writes.[2]

That argument, though, comes amid a sustained pushback against efforts to use algorithms and predictive technology to do everything from making bail decisions to assisting in sentencing to deciding where police should focus their enforcement efforts.

New York City, for example, established an Automated Decision Systems Task Force to start looking at how the city uses its powerful data tools.[3] Activists have criticized a Los Angeles Police Department program that uses computer programs to choose surveillance targets because the data input into the system creates a “racist feedback loop.”[4] The COMPAS algorithm, used to create recidivism scores for judges to consider during sentencing, has been accused of bias against people of color.[5]

There are defenders of algorithms beyond Cohen. Sharad Goel of Stanford University told Nature: International Journal of Science that, in the journal’s words, discrepancies between error rates for whites and people of color “instead reflect the fact that one group is more difficult to make predictions about than another.”[6]

“It turns out that that’s more or less a statistical artifact,” Goel said.[7]

That might come as cold comfort to an offender being sentenced based on a flawed formula: The formula is working against him or her because it has a problem predicting what people of the offender’s race will do, not because it’s biased per se.

Those inclined to seek a compromise have started to float ideas meant to answer the questions of bias while still using the data algorithms produce to (one hopes) improve society. One idea is simply to accept that, by their very nature, algorithms are “biased” — so the public should have more information and more input into what goes into the formulas.[8]

At least one avenue for a possible resolution seems to be closed for now. The U.S. Supreme Court faced a decision last year about whether to take the case of Loomis v. Wisconsin, a frontal assault on the use of COMPAS in sentencing decisions.[9] But the court passed.[10]

 

[1] Noam Cohen, Algorithms can be a tool for justice — if used the right way, Wired (Oct. 25, 2018, 1:23 PM), https://www.wired.com/story/algorithms-netflix-tool-for-justice/.

[2] Id.

[3] Mayor de Blasio announces first-in-nation task force to examine automated decision systems used by the city, NYC.gov (May 16, 2018), https://www1.nyc.gov/office-of-the-mayor/news/251-18/mayor-de-blasio-first-in-nation-task-force-examine-automated-decision-systems-used-by.

[4] George Joseph, The LAPD has a new surveillance formula, powered by Palantir, The Appeal (May 8, 2018), https://theappeal.org/how-walmart-is-helping-prosecutors-get-10-year-sentences-for-shoplifting-7d868e8b38b8/

[5] See Sara Chodosh, Courts use algorithms to help determine sentencing, but random people get the same results, Popular Science (Jan. 18, 2018), https://www.popsci.com/recidivism-algorithm-random-bias#page-2

[6] Rachel Courtland, Bias detectives: The researchers striving to make algorithms fair, Nature: International Journal of Science (June 20, 2018), https://www.nature.com/articles/d41586-018-05469-3

[7] Id.

[8] Matthias Spielkamp, Inspecting algorithms for bias, MIT Technology Review (June 12, 2017), https://www.technologyreview.com/s/607955/inspecting-algorithms-for-bias/amp/.

[9] Adam Liptak, Sent to prison by a software program’s secret algorithms, N.Y. Times (May 1, 2017), https://www.nytimes.com/2017/05/01/us/politics/sent-to-prison-by-a-software-programs-secret-algorithms.html.

[10] Loomis v. Wisconsin, SCOTUSBlog, http://www.scotusblog.com/case-files/cases/loomis-v-wisconsin/.

Image Source: https://deadline.com/2016/06/person-of-interest-finale-jonah-nolan-interview-x-files-batman-taraji-p-henson-greg-plageman-1201775530/

By: Zaq Lacy

In many schools around the country, classroom technology made its debut in the early to mid-80’s, in the form of Apple II computer labs and the infamous (but so very nostalgic) words, “You have died of dysentery,” thanks in large part to the vision of Steve Jobs and his collaboration with the Minnesota Educational Computing Consortium (MECC) to “save the world by putting computing power in the hands of every kid in America.”[1] Today, the technology available to enhance the learning experience encompasses nearly every aspect of the classroom, from e-texts,[2] to a litany of third-party applications that incorporate social media with cloud-integrated collaboration tools,[3] to biometric identification systems used to pay for lunch.[4] This technology offers previously unheard-of precision in real-time assessment, allowing teachers to assess learning processes as well as responses.[5] Moreover, the use of the technology available today has significant benefits for the classroom and students.[6] Despite the benefits, however, there is an increasing concern over the privacy of our students.[7]

The Family Educational Rights and Privacy Act (FERPA)[8] protects the privacy of student education records[9] but has become as obsolete as the technology that existed when it was passed 40 years ago.[10] As tech companies produce more and more sophisticated software, and integration in the classroom becomes progressively pervasive, so too grows their ability to gather information on the users. Such companies have accumulated immeasurable information on students’ school activities,[11] causing some states, such as California, to take legislative steps to address the growing problem,[12] which some attorneys feel is the number one problem for schools and new educational technology companies.[13] California’s Student Online Personal Information Act (SOPIPA) has served as a model for a number of State legislatures, 15 of which passed similar laws in 2015.[14] Despite the progress that is being made, officials still acknowledge that technology is likely to continue to develop faster than legislation, which will create new problems in the future. [15] So, for now at least, our students are living with privacy protections that are so three years ago.

 

[1] See Matt Jancer, How You Wound Up Playing The Oregon Train in Computer Class, Smithsonian.com (Jul. 22, 2016), https://www.smithsonianmag.com/innovation/how-you-wound-playing-em-oregon-trailem-computer-class-180959851/.

[2] See Online Textbooks, Fairfax Cty. Pub. Sch., https://www.fcps.edu/online-textbooks (last visited Nov. 2, 2018).

[3] See Kathy Dyer, The Ultimate List- 65 Digital Tools and Apps to Support Formative Assessment Practices, NWEA.org (Jan. 9, 2018), https://www.nwea.org/blog/2018/the-ultimate-list-65-digital-tools-and-apps-to-support-formative-assessment-practices/.

[4] See Natasha Singer, With Tech Taking Over in Schools, Worries Rise, N.Y. Times (Sept. 14, 2014),  https://www.nytimes.com/2014/09/15/technology/with-tech-taking-over-in-schools-worries-rise.html.

[5] See Alvin Vista & Esther Care, Education Assessment in the 21^st Century: New Technologies, BROOKINGS.edu (Feb. 27, 2017), https://www.brookings.edu/blog/education-plus-development/2017/02/27/education-assessment-in-the-21st-century-new-technologies/.

[6] See Jared Keengwe & Grace Onchwari, Technology and Early Childhood Education: A Technology Integration Professional Development Model for Practicing Teachers, 37 Early Childhood Educ. J. 209, 210 (2009); see also Effects of Technology on Classrooms and Students, U.S. Dep’t. of Educ., https://www2.ed.gov/pubs/EdReformStudies/EdTech/effectsstudents.html#change (last visited Nov. 2, 2018)

[7] See Singer, supra note 4.

[8] 20 U.S.C. § 1232(g) (2018); 34 C.F.R. § 99.31 (2018)

[9] Family Educational Rights and Privacy Act, U.S. Dep’t. of Educ., https://www2.ed.gov/policy/gen/guid/fpco/ferpa/index.html (last visted Nov. 2, 2018).

[10] See Singer, supra note 4.

[11] See id.

[12] Student Online Personal Information Protection Act of 2014, Cal. Bus. & Prof. Code §§ 22584-22585 (Deering 2014); Early Learning Personal Information Protection Act, Cal. Bus. & Prof. Code §§ 22586-22587 (Deering 2017).

[13] See Matthew Johnson, The Top Five Legal Issues for Edtech Startups and Schools, Edsurge.com (Apr. 16, 2016).

[14] See Tanya Roscorla, More States Pass Laws to Protect Student Data, Govtech.com (Aug. 27 2015), http://www.govtech.com/education/k-12/What-States-Did-with-Student-Data-Privacy-Legislation-in-2015.html?utm_source=related.

[15] See id.

Image Source: https://www.smithsonianmag.com/innovation/how-you-wound-playing-em-oregon-trailem-computer-class-180959851/.

By: Mariah Bayless Davis

The advancement of technology has given individuals the false sense of familiarity with people they have never met. Social media users are often motivated to overshare experiences and information about themselves to feel a sense of community on platforms such as Twitter and Facebook. While sharing what you ate is normal in today’s society, sharing your personal health information may not be something one is forthcoming about, rightfully so. The Health Insurance Portability and Accountability Act allows patients to guard their medical records and control the use of such personal health information.[1] However, what is the protection for data that is not deemed, “personal health information?” Information such as biometric data collected from wearable technology is not specifically regulated by federal laws.[2] That might not be an issue for a regular person that uses a Fitbit to track their daily steps, but what happens when an athlete uses wearable technology for rehab and training purposes? Barbara Osborne, a professor of sports law at University of North Carolina, commented on the murky waters that puddle at the intersection of public athletes and privacy by saying, “once [athletes] private biometric data is considered a term of employment, the contents of that data are no longer considered protected health information under law.”[3] How do athletes grapple with being public figures while simultaneously wanting to improve their skills in private with the help of wearable technology? With the introduction of the Motus mThrow sleeve in 2014[4], Major League Baseball and Major League Baseball Players Union attempted to navigate the unpaved roads of wearable technology in professional sports.

In professional sports, injuries are inevitable. Injuries can not only lead to poor performance by a team, but also wasted money in a league like Major League Baseball where contract money is guaranteed. In 2015 alone, the league reported $420 million in pitchers’ salaries “wasted” on the disabled list and pointed its finger at elbow injuries as the main culprit.[5] The sport of baseball is so plagued by elbow injures that the surgery to fix them is known as a “Tommy John procedure,” named after the first player to get the surgery.[6] As the founder of the American Sports Medicine Institute, Dr. James Andrews has had plenty of experience researching elbow injuries and performing elbow surgeries. When asked why he was so passionate about finding a preventative measure to lessen elbow injuries, he said, “I’d like to put myself out of business [one day].”[7] By researching the cause of elbow injuries, one could potentially develop a piece of technology to lessen the popularity of Tommy John surgeries, which “increased by 700 percent [from 2004 to 2010].”[8] That was Joe Nolan’s goal when he and his company, Motus, developed the mThrow Pitcher Sleeve.[9] The mThrow sleeve looks like a common compression sleeve that you could buy at Dick’s Sporting Goods. However, the Motus technology built into the sleeve is what could completely eliminate elbow injuries caused by the force of pitching. To be able to collect data relating to arm speed and release point, the sleeve stretches from the mid forearm to just under the shoulder and nestled inside a slot on the sleeve is a small sensor.[10] As the pitcher throws, the sleeve not only collects data and measurements pertaining to shoulder rotation, but also pertaining to the angles of the elbow and shoulder.[11] Knowledge about the angles of the elbow and shoulder shed light on the stress being put on the ulnar collateral ligament, which if weakened without correction can lead to an elbow injury.[12] Many companies that analyze the mThrow data for players and teams say that the technology is used mainly to “train players to withstand fatigue, rehab them faster and better, and hopefully prevent them from having surgery at the beginning.”[13]

Although the general consensus around the league is that athletes’ biometric data collected from the mThrow sleeve would be used for good purposes, some athletes are skeptical. Andrew Miller, an All-Star pitcher who most recently played for the Cleveland Indians shared his thoughts by saying, “you don’t want a team to treat you differently in some sort of contractual thing because they don’t think you’re not getting enough sleep or sleep poorly…it’s just a matter of how you work [data] in and who do you give access to and in what form?”[14] Alan Milstein, an attorney who lectures on sports and bioethics shares the same sentiment as Miller. He states that the use of the data might actually deter athletes from voluntarily using the technology, “if the purpose is to find out, ‘Geez, is this guy really worth it? Should we sign him to another year? Nah, he looks like he’s really failing. Let’s get rid of him,’ then it’s no longer in the athletes’ best interest to have the team be able to monitor every aspect of their health.”[15] Both Miller and Milstein question the regulations and further perimeters regarding not necessarily the taking of the data, but the use of it. A new Collective Bargaining Agreement was introduced in 2017 and while the agreement provided clarity regarding the technology and data that comes from it, the regulations might increase skepticism.

Attachment 56 of the 2017-2021 Collective Bargaining Agreement summarizes the manner in which new biometric technologies are evaluated and approved, while also making an effort to establish regulations regarding a player’s privacy when it comes to their data, who has access to it, and for what purpose.[16] In 2016, before Major League Baseball updated the Collective Bargaining Agreement, the only people who had access to the biometric data from the sleeve were the pitcher himself, the agency that represents him, and Motus.[17] As set out in the new agreement, “the Club representatives permitted access to a player’s wearable data are: General Manager, Assistant General Manager, Field Manager, Team Physician, Certified Athletic Trainer, Strength and Conditioning Coach, Rehabilitation Coordinator, and an individual hired by a Club to manage the use and administration of wearable technology.”[18] The agreement later regulates the use of the data and says that it cannot be exploited or used for any commercial purposes.[19] Although not explicit, the agreement also prohibits the use of a player’s biometric data as a tool during salary arbitration. Explicitly using the data in the argument during salary arbitration would lead to disclosing the data to outside parties not permitted to access data.[20] Initially the league and player’s union sought out to make the discussion about wearable technology clearer but the regulations point to a loophole that could be used by Club representatives.

During a salary arbitration, Club representatives and the athlete present their cases in front of a panel of arbitrators. While the athlete has his agent there to represent his interests, the Club usually sends two individuals on their behalf: The General Manager and Assistant General Manager.[21] Those two individuals are also amongst the permitted Club representatives who have access to wearable data. Although the GM and Assistant GM are not permitted to explicitly use this information during a salary arbitration, just the mere knowledge of it can point to anchoring bias. Anchoring bias is a human’s natural tendency to rely too heavily on the first piece of information received when making decisions.[22] Is it natural or even possible for someone to use data for one purpose but then not let that same data influence their decisions for another purpose? If the General Manager and Assistant General Manager of a Club can continue to access this loophole to use data in salary arbitrations, that could lead to another problem: abuse of power. As one of the first professional sports leagues to regulate the ownership and fair use of the advanced data[23], the MLB will act as a case study for the National Football League, as conversations regarding commercial use of football players’ data are already happening.

 

[1] See Jen Booton, Widespread Wearable Use Could Fundamentally Change Professional Sports, Sport Techie, (Aug. 28, 2018), https://www.sporttechie.com/widespread-wearable-use-could-fundamentally-change-pro-sports/

[2] See id.

[3] Id.

[4] See Will Carroll, The Sleeve That Could Save Baseball: Exclusive Look at New MLB Technology, Bleacher Report, (July 2, 2014), INSERT LINK

[5] See Tom Goldman, What’s Up with Those Baseball Sleeves? Lots of Data, and Privacy Concerns, NPR, (Aug. 30, 2017), https://www.npr.org/2017/08/30/547062884/whats-up-those-baseball-sleeves-lots-of-athletes-data-and-concerns-about-privacy

[6] See id.

[7] See Carroll, supra note 4.

[8] Id.

[9] Id.

[10] See Tom Goldman, What’s Up with Those Baseball Sleeves? Lots of Data, and Privacy Concerns, NPR, (Aug. 30, 2017), https://www.npr.org/2017/08/30/547062884/whats-up-those-baseball-sleeves-lots-of-athletes-data-and-concerns-about-privacy

[11] See id. See also Will Carroll, The Sleeve That Could Save Baseball: Exclusive Look at New MLB Technology, Bleacher Report, (July 2, 2014), https://bleacherreport.com/articles/2097866-the-sleeve-that-could-save-baseball-exclusive-look-at-new-mlb-technology (explaining the extent of technology and what can be recorded by the sleeve.)

[12] See Carroll, supra note 11.

[13] See Goldman, supra note 10 (explaining how technology could be used to prevent elbow injuries, instead of just using the technology after the fact.)

[14] Mike Vorkunov, Innovation vs. invasion of privacy: MLB wearable technology battle looms, USA Today, (Sept. 21, 2016), https://www.usatoday.com/story/sports/mlb/2016/09/21/innovation-vs-invasion-privacy-mlb-wearable-technology-battle-looms/90783188/

[15] See Goldman, supra note 10 (citing lack of perimeters as a reason athletes might not take advantage of the positives that the technology offers.)

[16] Stephanie Springer, An Update On Wearable Baseball Technology, Fan Graphs, (Aug, 7, 2018), https://www.fangraphs.com/tht/an-update-on-wearable-technology/

[17] See Vorkunov, supra note 14.

[18] 2017 Major League Baseball Collective Bargaining Agreement, attach. 56 (Dec. 1, 2016).

[19] See id.

[20] See id (explaining that the data shall not be disclosed by a Club to any party other than those persons listed as permitted.)

[21] Eric Stephen, Salary Arbitration: A Necessary Evil, True Blue LA, (Feb. 17, 2014), https://www.truebluela.com/2014/2/17/5379764/salary-arbitration

[22] Mohammed, S. (2018). The Hidden Trap of “Anchoring Bias” in Decision Making and The Leadership Lesson From “Moneyball” Movie. [Blog] Medium. Available at: https://medium.com/@shahmm/the-hidden-trap-of-anchoring-bias-in-decision-making-and-the-moneyball-movie-79aa7295f21d.

[23] See Springer, supra note 16.

Image Source: https://www.overthemonster.com/2018/2/6/16979376/mlb-starting-pitcher-rankings-chris-sale

By: Jordan Carrier

Nearly two-thirds of Americans own and use smartphones,[1] up from only two percent in 2005.[2] Cell phones, and particularly smart phones, have “an immense storage capability,”[3] which can have serious implications for what information is available to be police when the owner of the smartphone is suspected of criminal activity. In 2014, the Supreme Court held that cell phones are protected under Fourth Amendment restrictions and may only be searched after police have obtained a warrant for the contents of the cell phone, absent existent circumstances.[4]

Today, police may gain access to cell phones after obtaining a warrant, but how they are permitted to do so remains up for debate.[5] Smartphones offer a variety of ways consumers can secure their devices, including passcodes, fingerprint scanning, and facial recognition software.[6]

The Supreme Court has not addressed Constitutionality of compelling individuals to unlock their cell phones, nor have any federal appellate courts, so the decisions have so far been left to lower courts.[7] So far, lower courts have turned to the Fifth Amendment, which prohibits compelling individuals to provide testimony that would be incriminating against himself.[8] A Virginia Circuit Court held that “[a]n act is testimonial when the accused is forced to reveal his thoughts and beliefs with the government.”[9] Under that definition, a defendant cannot be required to divulge his passcode because it relies on his personal knowledge.[10] However, a fingerprint is not testimonial and is more like types of evidence that the Fifth Amendment privilege against self-incrimination does not protect, such as voice, handwriting, and blood samples.[11] The same court held that fingerprints are not protected under the Fifth Amendment, so a state may be granted a motion to compel a defendant’s fingerprint,[12] giving them access to the defendant’s cell phone and its contents.

Facial recognition has been used as a way to unlock smartphones since March of 2017, and has since become a popular way for consumers to secure their smartphones with the introduction of the iPhone X. So far, unlocking a cell phone with facial recognition has been treated similarly to the use of a fingerprint. For example, on August 10, 2018 FBI agents entered the home of a man suspected of receiving and possessing child porn and told him to put his face in front of his iPhone X, based on a search warrant.[13] With his phone unlocked, investigators were given access to online chats, pictures, and other evidence that could be used against the suspect.[14]

Based on the ability of the government to obtain access to cell phones through biometrics like fingerprints, faces, and conceivably irises,[15] consumers who are worried their security may be compromised have been advised to use a traditional passcode. However, law enforcement is now able to access cell phones despite not knowing the passcode to unlock them.[16] In 2016, Apple refused to provide the FBI with access to an Apple cellphone and was in the midst of litigating the issue when the FBI paid more than one million dollars for software that could unlock the phone.[17]

While the purchase of million dollar software by the federal government may have been concerning to some, it seemed unlikely that many local governments would be able to afford to use this technology.[18] Enter Grayshift, a startup company, that began selling “iPhone-unlocking boxes” for $15,000 apiece in early 2018.[19] The Indiana State Police, one government agency that has purchased GrayKey, reported that in the first 60 days of owning the device, investigators were able to unlock 96 iPhones.[20]

While Apple, the only company currently affected by the devices,  has publicly stated that they support law enforcement and will assist in criminal and other investigations,[21] the company has actively worked to foil GrayKrey and other similar devices, implementing new security measures with almost every software update.[22] In the iOS 12 update, Apple reportedly blocked police from cracking phone passcodes.[23]

With the Fifth Amendment protections against compelling defendants to reveal their phone passcodes and the efforts of Apple to protect consumer privacy, consumers can feel confident that the data stored on their cell phones is secure and will not be used against them in court. At least until GrayKey counters Apples latest update.

 

[1] Aaron Smith, U.S. Smartphone Use in 2015, Pew Research Center (Apr. 1, 2015), http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/.

[2]Alexander Howard, Americans Think Smartphones Hurt Socializing, but Use Them Anyway, Huffpost (August 26, 2015), https://www.huffingtonpost.com/entry/americans-think-smartphones-hurt-socializing-but-use-them-anyway_us_55de233ee4b08cd3359e7031.

[3] Riley v. California, 134 S. Ct. 2473, 2478 (2014).

[4] Id. at 2487.

[5] Kaveh Waddell, Police Can Force You to Use Your Fingerprint to Unlock Your Phone, The Atlantic (May 3, 2016), http://www.leadingedgelaw.com/can-the-police-force-you-to-unlock-your-phone/.

[6]Adi Robertson, PSA: Samsung’s New Face Scanner Won’t Give You the Legal Protection of a Passcode, The Verge (Apr. 5, 2017 3:27 PM EDT), https://www.theverge.com/2017/4/21/15360584/samsung-galaxy-s8-unlock-face-iris-fingerprint-scanner-most-secure.

[7] Kaveh Waddell, Police Can Force You to Use Your Fingerprint to Unlock Your Phone, The Atlantic (May 3, 2016), http://www.leadingedgelaw.com/can-the-police-force-you-to-unlock-your-phone/.

[8] U.S. Const. amend. V.

[9] Commonwealth v. Baust, 89 Va. Cir. 267, 269 (2014).

[10] Id. at 271.

[11] Id. at 269.

[12] Id. at 271.

[13]Thomas Brewster, Feds Force Suspect to Unlock an iPhone with their Face, Forbes (Sept. 30, 2018, 10:01AM),  https://www.forbes.com/sites/thomasbrewster/2018/09/30/feds-force-suspect-to-unlock-apple-iphone-x-with-their-face/#563ae3821259.

[14] Id.

[15] Adam Clark Estes, Let’s Take This Case all the way to the Supreme Court, Gizmodo (June 1, 2017, 11:51AM), https://gizmodo.com/can-we-please-make-a-decision-on-police-unlocking-iphon-1795721375.

[16]Jason Tashea, Cat-and-Mouse Game: Customers Demand Cybersecurity, Law Enforcement Wants Easier Access to Evidence, ABA Journal (Oct. 2018), http://www.abajournal.com/magazine/article/cybersecurity_law_enforcement_access.

[17] Roert McMillan, Meet Apple’s Security Headache: The GrayKey, a Startup’s iPhone-Hacking Box, Wall St. J. (June 14, 2018, 1:21PM ET), https://www.wsj.com/articles/the-hacking-box-that-led-to-a-golden-age-of-iphone-investigations-1528996893.

[18] Id.

[19] Id.

[20] Jason Tashea, Cat-and-Mouse Game: Customers Demand Cybersecurity, Law Enforcement Wants Easier Access to Evidence, ABA Journal (Oct. 2018), http://www.abajournal.com/magazine/article/cybersecurity_law_enforcement_access.

[21]Romain Dillet, Justice Department Drops Lawsuit Against Apple as FBI has now Unlocked Farook’s iPhone, Tech Crunch (2015), https://techcrunch.com/2016/03/28/justice-department-drops-lawsuit-against-apple-over-iphone-unlocking-case/.

[22]Thomas Brewster, Apple vs. GrayKey: Leaked Emails Expose the Fight for Your iPhone Privacy, Forbes (July 16, 2018, 10:55AM), https://www.forbes.com/sites/thomasbrewster/2018/07/26/apple-ios-security-boost-not-stopping-cops-hacking-iphones/#31c457637129.

[23]Chaim Gartenberg, Apple Seems to Have Completely Blocked Police Password Cracking Tool in iOS 12, The Verge (Oct. 24, 2018, 3:53PM EDT), https://www.theverge.com/2018/10/24/18019660/apple-blocked-police-password-cracking-tool-ios-12-graykey-law-enforcement.

Image Source: https://blog.malwarebytes.com/security-world/2018/03/graykey-iphone-unlocker-poses-serious-security-concerns/

By: Kara Powell

“Vaping” has become an increasingly popular alternative to traditional cigarettes. Technically, vaping is an “electronic nicotine delivery system.”[1] Hookah, nicotine gels, and e-cigarettes are also included in this category.[2] While many adult smokers are turning to vaping while trying to quit smoking traditional cigarettes, many teenagers are also turning to vaping and e-cigarettes. E-cigarette use among high school students has increased drastically by 900% from 2011 to 2015.[3]

The 2009 Tobacco Control Act[4] gave the Food and Drug Administration (“FDA”) “authority to regulate the manufacture, distribution, and marketing of tobacco products.”[5] For example, under the Act, the FDA can restrict tobacco marketing and sales to youth, require smokeless tobacco product warning labels, and require disclosures of ingredients in tobacco products.[6]

The “Deeming Rule,”[7] amended the Tobacco Control Act by expanding the FDA’s authority from only being able to regulate traditional tobacco products, to being able to regulate all other types of tobacco products, including e-cigarettes and other vaping products.[8] The rule “deemed” that these vaping products constituted “tobacco products.”[9] Because of the “Deeming Rule,” e-cigarette products are now subject “to the same intense regulatory treatment as traditional cigarettes.”[10] This means that manufacturers and retailers must meet various requirements.  For example, manufacturers must pay fees, submit “tobacco health documents,” submit “quantities of harmful and potential harmful constituents,” and submit premarket applications.[11]

Before the Deeming Rule, there was no federal law to prohibit retailers from selling vaping products to minors under the age of eighteen.[12] One of the FDA’s main objectives with the Deeming Rule was to restrict youth’s access to tobacco products.[13] Recently, in September 2018, the FDA ordered five of the largest e-cigarette manufacturers to submit plans within sixty days on reducing teen use.[14] These five companies make up about ninety-seven percent of the e-cigarette market.[15] The FDA Commissioner, Scott Gottlieb, characterized the significant e-cigarette use among teens as a public health crisis.[16] In fact, after many convenience store retailers were caught illegally selling e-cigarettes to minors, the FDA is even considering limiting e-cigarette sales to vape shops.[17]

Only allowing vape shops to sell such products does not seem very effective, because if a teenager is using fake identification at a convenience store, nothing is stopping that individual from using the same form of identification at a vape shop. Hopefully a better and more realistic solution lies ahead once the five companies submit their plans to the FDA.

 

[1] Ashley Yi, Comment, E-cigarettes, the Controversial Buzz Across States that Puff for Stricter Regulation, 18 Tex. Tech. Admin. L. J. 149, 194 (2016).

[2] The Facts on the FDA’s New Tobacco Rule, U.S. Food & Drug Admin. (June 16, 2016), https://www.fda.gov/ForConsumers/ConsumerUpdates/ucm506676.htm. I refer to “vaping” and “e-cigarettes” interchangeably in this blog post.

[3] U.S. Dep’t of health & human servs., Office of the Surgeon General, E-cigarette Use Among Youth and Young Adults (2016)

[4] 21 USC § 387 (2012)

[5] Family Smoking Prevention and Tobacco Control Act – an Overview, U.S. Food & Drug Admin., https://perma.cc/9Z46-A7VD (last updated Jan. 17, 2018)

[6] Id.

[7] The Deeming Rule, 81 Fed. Reg. 28975 (May 10, 2016) (codified at 21 C.F.R. pts. 1100, 1140, 1143).

[8] Lauren H. Greenberg, Note, The “Deeming Rule”: The FDA’s Destruction of the Vaping Industry, 83 Brooklyn L. Rev. 777, 777­–78.

[9] Jonathan H. Adler, Regulatory Obstacles to Harm Reduction: The Case of Smoking, 11 N.Y.U. J.L. & Liberty 713, 733.

[10] Id. at 778.

[11] Pipe, Cigar, and Vape Shops that Are Regulated as Both Retailers and Manufacturers, U.S. Food & Drug Admin., https://www.fda.gov/ForConsumers/ConsumerUpdates/ucm506676.htm (last updated Aug. 13, 2018).

[12] The Facts on the FDA’s New Tobacco Rule, supra note 2.

[13] Id.

[14] Angelica LaVito, FDA Says it Had ‘Constructive’ Meetings with E-cigarette Manufacturers on Teen Epidemic, CNBC (Oct. 31, 2018), https://www.cnbc.com/2018/10/31/fda-has-met-with-juul-others-in-effort-to-curb-teen-e-cigarette-use.html.

[15] Id.

[16] Id.

[17] Angelica LaVito, FDA to Consider Limiting E-cigarette Sales to Vape Shops to Curb Youth Use, CNBC (Oct. 19, 2018), https://www.cnbc.com/2018/10/19/as-youth-e-cigarette-use-surges-fda-may-stop-convenience-store-sales.html.

Image Source: https://www.npr.org/sections/health-shots/2017/12/14/570767261/teens-pretty-sober-except-for-the-marijuana-and-vaping

By Kirk Kaczmarek

In 1848, James Wilson Marshall was walking along the American River near Coloma, California when he spied gold in the riverbed.[1] Thus began the California Gold Rush.[2] Within twenty months of Marshall’s discovery, the non-native American population increased by over 12,400%.[3] In 1852, the Gold Rush’s peak year, miner forty-niners extracted an inflation-adjusted $2.623 billion in gold.[4] This exploding and newly wealthy population supported further economic growth, as merchants and other service providers made more money than the miners ever did.[5] As for Marshall, he was unable to secure legal claim to the gold fields, and completely missed any form of windfall.[6]

The next gold rush might happen in outer space as governments and private companies consider mining asteroids for rare earth metals. For example, NASA has placed a rush on plans to investigate an asteroid estimated to contain $10,000 quadrillion in iron and nickel by 2022.[7] Goldman Sachs has indicated that, “while the psychological barrier to mining asteroids is high, the actual financial and technological barriers are far lower,” and that the world’s first trillionaire will be an asteroid miner.[8] Whether humans mine asteroids is fundamentally a matter of economics. And whether investors end up wealthy or following in Marshall’s footsteps will require clarity in a currently unclear area law.

When considering whether to mine at a location on earth, geologists consider resources and reserves.[9] Resources are mineral deposits that geologists identify through exploration.[10] Reserves are the portion of resources that feasibility studies determine are economically viable for mining.[11] Thus, resources and reserves do not estimate how much of a mineral is available on the planet – they are merely labels that help us measure the quantity of minerals available against market demand.[12] Conversely, terminal depletion refers to the actual lack of a mineral.

Today, China produces over 90% of the world’s rare earth metals.[13] Unfortunately, China claims that its reserves for numerous rare earth metals will deplete within twenty years.[14] Terminal depletion is unlikely; geologists would likely discover more resources in the meantime, though issues in the supply chain might occur.[15] But whether these resources would have the economic viability to become reserves is less certain, especially when confronted with the possibility of turning asteroids into mineral reserves. This possibility is quickly growing noticeably closer.

On October 3, 2018, a mission headed by the Japanese Aerospace Exploration Agency successfully landed a robot onto an asteroid, Ryugu, for the first time in history.[16] On December 3, 2018, NASA expects to collect a sample from asteroid Bennu and return it to earth.[17] With the convergence economic and physical capabilities, asteroid mining seems like an inevitable future.

In the United States, private companies like Elon Musk’s SpaceX and Chris Lewicki’s Planetary Resources hope to gain access to the asteroid mining market.[18] The United States government appears to support their entrepreneurialism. In 2015, the U.S. Commercial Space Launch Competitiveness Act passed with bipartisan support. Title IV of this act directs the President to facilitate the private commercialization and recovery of resources found in space.[19] The act also states that miners are entitled to own the resources they mine.[20] Some might argue that this act conflicts with the 1967 Outer Space Treaty, which states that “outer space, including the moon and other celestial bodies, is not subject to national appropriation.”[21]

Can a country mine minerals and remain in compliance with the Outer Space Treaty? Can a country contract a corporation to mine minerals on its behalf? What if two corporations try to mine the same asteroid at the same time? What if these corporations are headquartered in different countries? Who will clean up the debris left orbiting the earth as spacecraft exit the atmosphere and return with valuable payloads? Should we require licenses to mine asteroids? The hypotheticals are as endless as space itself.

The law governing this emerging field is understandably immature. As a leader – if not the leader – in space exploration, United States ought to remember the case of James Marshall, and its own analogous position as the discoverer. Growing pains are likely unavoidable as we reach into a new era of exploration and innovation. However, by giving some forethought to the international law governing asteroid mining, the United States might mitigate the worst of those pains.

 

[1] See Events in the West 1840-1850, PBS (2001) https://www.pbs.org/weta/thewest/events/1840_1850.htm, James Wilson Marshall, PBS (2001) https://www.pbs.org/weta/thewest/people/i_r/marshall.htm.

[2] See James Wilson Marshall, supra 1.

[3] See Gayle Olson-Raymer, The California Gold Rush and the Controversy of the State Constitution, Humboldt State University (2014)  http://users.humboldt.edu/ogayle/hist383/GoldRush.html.

[4] See id. See CPI Inflation Calculator, Inflation Calculator https://www.officialdata.org/1852-dollars-in-2018?amount=80000000.

[5] See Karen Clay & Randall Jones, Migrating to Riches? Evidence from the California Gold Rush, 64 The Journal of Economic History 4, 1021-1022 (2008) https://www-jstor-org.newman.richmond.edu/stable/pdf/40056467.pdf?refreqid=excelsior%3Abe44b6164c135df13a516fed60ed92ca.

[6] See James Wilson Marshall, supra note 1.

[7] See Brid-Aine Parnell, Nasa Will Reach Unique Metal Asteroid Worth $10,000 Quadrillion Four Years Early, Forbes (May 26, 2017, 6:12 am) https://www.forbes.com/sites/bridaineparnell/2017/05/26/nasa-psyche-mission-fast-tracked/#376228844ae8.

[8] See Aaron Mamiit,  The World’s First Trillionaire Will be the One Who Harnesses Space Mining, Tech Times (April 23, 2018, 8:37 am EDT) https://www.techtimes.com/articles/225886/20180423/the-worlds-first-trilionnaire-will-be-the-one-who-harnesses-space-mining.htm.

[9] https://www.geologyforinvestors.com/classification-of-mineral-resources-and-reserves/.

[10] See id.

[11] See id.

[12] https://www.mining-technology.com/features/featuremined-into-extinction-is-the-world-running-out-of-critical-minerals-5776166/

[13] See id.

[14] See id.

[15] See id.

[16] See Numerous Boulders, Many Rocks, No Dust: MASCOT’S Zigzag Course Across the Asteroid Ryugu, DLR (October 12, 2018) https://www.dlr.de/dlr/en/desktopdefault.aspx/tabid-10081/151_read-30235/#/gallery/32338.

[17] See The Mission, OSIRIS-REx Mission https://www.asteroidmission.org/objectives/, Mission Operations, OSIRIS-REx https://www.asteroidmission.org/objectives/mission-operations/.

[18] See Staff, Classification of Mineral Resources and Reserves, Geology for Investors https://www.washingtonpost.com/business/space-mining-may-be-only-a-decade-away-really/2017/04/28/df33b31a-29ee-11e7-a616-d7c8a68c1a66_story.html?utm_term=.23a3f5ddd07c.

[19] 51 U.S.C.A. § 51302

https://1.next.westlaw.com/Document/NB31DBAB0A3BB11E5AA6DE6442ADFAF1C/View/FullText.html?originationContext=previousnextsection&contextData=(sc.Category)&transitionType=StatuteNavigator&needToInjectTerms=False.

[20] 51 U.S.C.A. § 51303 https://1.next.westlaw.com/Document/NC516B640A3BB11E59891923A4484C9F7/View/FullText.html?originationContext=previousnextsection&contextData=(sc.Document)&transitionType=StatuteNavigator&needToInjectTerms=False.

[21] G.A. Res. 2222 (XXI) http://www.unoosa.org/oosa/en/ourwork/spacelaw/treaties/outerspacetreaty.html.

Image Source: https://www.flickr.com/photos/cygni_18/41235922900

By: Eric Richard

Not that long ago there was no such thing as an app store, the word “smartphone” wasn’t commonplace, and artificial intelligence existed only in science fiction. Today, we know a very different world. Companies fight to have a best-selling app, smartphones are considered a necessity for everyday life, and artificial intelligence is finding a place in industry after industry.[1] The legal profession is no exception.[2] Year after year people are “taking the law into their own hands,” whether it be through the use of websites like LegalZoom or any number of others. People are trusting lawyers less and trusting their own abilities more. It was only a matter of time before artificial intelligence started playing a role in an attempt to do what lawyers have spent years being trained to do.

One segment of artificial intelligence, natural language processing, is already capable of scanning documents and anticipating their relevancy to a particular case.[3] While some aspects of a lawyer’s work will likely always be safe from machines and artificial intelligence, such as appearing in court, any automation is always cause for concern. [4] Basic document review has already been “outsourced,” although to machines and not to persons of other countries than the United States, with more and more likely to follow.[5] This isn’t necessarily a bad thing, after all, with less time needed to be spent on menial tasks, lawyers will be free to devote more time and manpower to the more complicated aspects of work that come with a common law system.[6]

But what happens when a program is capable of handling more than just the menial tasks? What happens when an app could handle actual lawyering and cut the attorney out of the equation altogether? That’s exactly what people like Justin Kan and Josh Browder are trying to do.[7] Kan is an entrepreneur who is responsible for the video game streaming service, Twitch.[8] After selling Twitch to Amazon for nearly a billion dollars, Kan has set his sights on a different venture, and now operates a legal technology start-up in Silicon Valley.[9] It’s called Atrium, and the company isn’t just looking to replace the menial tasks done by lawyers, it’s engineers are hoping to design artificial intelligence that could even issue stock options to employees of a corporation or assist with fundraising from venture capitalists.[10]

While Kan’s work is still in the early stages, Browder has released an app just this month called DoNotPay that looks to further chip away at the work lawyers are traditionally hired to do.[11] At first, DoNotPay was just a tool that people could use to challenge a parking ticket without the need of an attorney, but now a new update will reportedly allow the user to sue anyone in small claims court in all 50 states.[12] The latest version of the app is still in its infancy, and we have yet to see what successes and complications are going to come, but it’s fair to say that innovation is never going to slow down. Artificial intelligence is muscling its way into the legal profession and apps like DoNotPay might just be the first of it but will certainly not be the last.

 

[1] See Dan Mangan, Lawyers could be the next profession to be replaced by computers, CNBC (Feb. 17, 2017, 1:55 PM), https://www.cnbc.com/2017/02/17/lawyers-could-be-replaced-by-artificial-intelligence.html.

[2] See id.

[3] See Steve Lohr, A.I. Is Doing Legal Work. But It Won’t Replace Lawyers, Yet, N.Y. Times (Mar. 19, 2017), https://www.nytimes.com/2017/03/19/technology/lawyers-artificial-intelligence.html.

[4] See id.

[5] See id.

[6] See id.

[7] See Elizabeth Dwoskin, This Silicon Valley start-up wants to replace lawyers with robots, Wash. Post (Sept. 14, 2017), https://www.washingtonpost.com/news/innovations/wp/2017/09/14/this-silicon-valley-startup-wants-to-replace-lawyers-with-robots/?noredirect=on&utm_term=.7a7097ee6959; See also Jason Tashea, DoNotPay app aims to help users sue anyone in small claims court–without a lawyer, A.B.A. J. (Oct. 10, 2018, 9:30 AM), http://www.abajournal.com/news/article/file_a_smalls_claims_suit_anywhere_in_the_country_through_an_app/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email.

[8] See Dwoskin, supra note 7.

[9] See id.

[10] See id.

[11] See Tashea, supra note 7.

[12] See id.

Image Source: https://www.entrepreneur.com/article/291928

By: Florian Uffer

In an Initial Public Offering (“IPO”), a private company or corporation offers its stock to the public for the first time.[1] The main goal behind going public usually consists of raising capital for different purposes, such as expansion.[2]

The drastic rise of cryptocurrency over the past five years, showcasing an increase in market capitalization of 190.27%,[3] has brought a similar animal into existence: the Initial Coin Offering (“ICO”).

Because ICOs are set in the world of cryptocurrency, a brief introduction to it is needed. Cryptocurrency is an electronic cash system which does not rely on banks or third parties to verify transactions.[4] Rather, transactions are recorded on a blockchain, a digital ledger.[5] This blockchain is used to confirm upcoming transactions, thus enabling direct peer-to-peer payments.[6] As of today, there are three main types of cryptocurrency.[7] First, Bitcoin is a digital currency which can be exchanged among people.[8] The second type, Altcoins, usually are alternatives of Bitcoins with minor changes.[9] Third, tokens reside in their own blockchains and represent an asset or utility.[10]

Just like IPOs, ICOs act as fundraisers of sorts.[11] Interested investors buy in to the offering, and receive a new token specific to the ICO as consideration.[12] The company holding the ICO then uses the raised funds to pursue the respective investment it had in mind.[13] ICOs come with unique advantages and risk of which the investor should be aware.

One of the more obvious advantages of an ICO lies in the volatility of cryptocurrency: in this high-risk/high-reward setting, an investor may be able to realize stellar profits. Additionally, ICOs do not require much paperwork,[14] which reduces the administrative costs. All that is needed is a “white paper,” which describes the project and thus is the primary tool used by investors to decide whether they wish to invest or not.[15]
In considering the dark side, it becomes apparent that ICOs are based on pure speculation.[16] The volatile nature of cryptocurrency combined with the extremely low amount of financial information[17] that is available to investors give rise to an unpredictable financial environment.

The major issue arising out of the lack of paperwork inherent in ICO are scams: a 2018 study reported that about 80% of ICOs were fraudulent.[18] The Securities and Exchange Commission (“SEC”) manifests these concerns on its website: “While [cryptocurrencies] and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets.”[19]

Regulating the ICO market offers numerous advantages. First, increased investor protection would ensue. Requiring more disclosure from ICO offerors and thus ensuring a more consistent financial environment would drastically reduce the rate of scams and thus promote the market for ICOs.[20] Heightened disclosure requirements would also minimize the use of ICOs to raise money for illegitimate purposes, such as money laundering or terrorism funding.[21] Finally, regulation would increase the certainty of investment in the space, and consequently attract more investors.[22]

The market for ICOs however, remains yet to be thoroughly regulated. Due to the revolutionary concept behind cryptocurrency and its technologically advanced nature, relevant U.S. regulatory agencies have found it difficult to rightfully assert jurisdiction over it. In a hearing before the House Committee on Appropriations however, SEC Chairman Jay Clayton addressed the SEC’s view on ICOs. The SEC views tokens as generally falling within the realm of securities.[23] Because tokens are the financial assets involved in ICOs, it seems that the SEC is in pole position to regulate this market in the future.

 

[1] See Initial Public Offering – IPO, Investopedia, https://www.investopedia.com/terms/i/ipo.asp (last visited Oct. 25, 2018).

[2] See id.

[3] See Visualizing The Meteoric Rise Of Cryptocurrency in the Past 5 Years, HowMuch.net, https://howmuch.net/articles/top-10-cryptos-past-5-years (last visited Oct. 24, 2018).

[4] Adam Levy, What is Cryptocurrency?, The Motley Fool (Mar. 11, 2018, 7:15 AM), https://www.fool.com/investing/2018/03/11/what-is-cryptocurrency.aspx.

[5] See id.

[6] See id.

[7] See Ray King, Understanding the Different Types of Cryptocurrency, Bitdegree (Sept. 17, 2018), https://www.bitdegree.org/tutorials/types-of-cryptocurrency/#The_Three_Main_Types_of_Cryptocurrency.

[8] See id.

[9] See id.

[10] See id.; Definition of Crypto Token, Investopedia, https://www.investopedia.com/terms/c/crypto-token.asp (last visited Oct. 25, 2018).

[11] See Initial Coin Offering (ICO), Investopedia, https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp (last visited Oct. 25, 2018).

[12] See id.

[13] See id.

[14] See Ameer Rosic, ICOs Pros & Cons. Cutting Through the Noise, Huffpost (July 4, 2017, 8:02 AM), https://www.huffingtonpost.com/entry/ico-pros-cons-cutting-through-the-noise_us_595b7f22e4b0c85b96c6646e.

[15] See id.

[16] See id.

[17] Investors usually are only able to consider the ICOs’ “white papers” in making an investment decision, as it is the only paperwork arising out of the ICO. See id.

[18] See 80% of ICOs are Scams : Report, Investopedia, https://www.investopedia.com/news/80-icos-are-scams-report/ (last visited Oct. 25, 2018).

[19] SEC, Initial Coin Offerings (ICOs) (2018), https://www.sec.gov/ICO.

[20] See Thijs Maas, Why ICOs Need to Be Regulated, Hackernoon (Oct. 17, 2017), https://hackernoon.com/why-cryptocurrencies-and-tokens-should-be-regulated-349b920b62c8.

[21] See id.

[22] See id.

[23] See FY 2019 U.S. Securities and Exchange Commission: Hearing Before the Comm. on Appropriations (2018) (statement of Jay Clayton, Chairman, Securities and Exchange Commission).  

Image Source: https://www.sec.gov/ICO