NFT... Metaverse... scam!

Here’s what you need to know this week:

• Affairs of state: NFT… Metaverse… Scam!

State-by-state:

• Tencent won $37m to build Beijing’s blockchain
• Apple’s frontline workers were left by the wayside
• Amazon let its workers play games on the job
• Microsoft seized domains used by Chinese hackers
• Meta is under pressure from academics, and a landmark lawsuit over Myanmar atrocities

New findings from AltasVPN show that in 2021 the Federal Trade Commission in the US handled 5,869 complaints about cybercrime; and that Americans lost nearly $13m to scams every day.

Investment-related crimes that feature NFTs (non-fungible tokens; which are unique digital assets, often images, that can be bought and sold, but not replicated) and tokens have been trending up with the rise of the technologies themselves. Earlier this year, investors in “Evil Ape” NFTs, which are literally just portraits of apes, lost $2.7m when the developers, website and social media accounts of the project disappeared – leaving only a trace of blockchain transactions skimming off the investors’ money.  

More recently, a cryptocurrency inspired by Squid Game, the Netflix show, scammed buyers out of $3.3m by telling them their purchase would later be tradeable in an online game based on the show. The social media accounts and website for the token also disappeared without trace. 

Crimes of this kind have grown in frequency by 277 per cent since last year according to the Federal Trade Commission, and are exacting a growing toll on unsuspecting investors. 
The UK is also being hit. The National Fraud Intelligence Bureau states that businesses and individuals have lost $2.5bn to fraud and cybercrime. According to its data, the single biggest category of reported crimes is “None of the Above”, outstripping Online Shopping and Auctions, Advance Fee Fraud and Online Bank Account fraud.

We’re endeavouring to learn more about this category. In the meantime the situation across the Atlantic suggests investment-related crime involving cryptocurrencies and NFTs could be a culprit. At the moment we know this ”None of the Above” category involves “fraud by false representation” or “obtaining services dishonestly”.

Last year the UK Treasury asked Google, Meta (then Facebook) and Amazon what they were doing to prevent fraud and fight cybercrime. Their answers will supposedly inform new legislation. The Digital Markets Unit and the Online Safety Bill are intended to protect consumers from the avalanche of online scams they encounter everyday, although it’s not yet clear how they’ll do so.

Tencent Cloud has won a contract with the government in Beijing to provide blockchain computing. The work will be done with the municipal government of Beijing’s Bureau of Economic and Information Technology, and includes providing cloud software, servers and equipment to support blockchain tech (a distributed database that is very difficult to change, hack or cheat). Last month Chinese government officials warned citizens about fake cryptocurrency wallets implicated in scams and money laundering, while cracking down on trading and mining tokens. Tencent might well be involved in the Chinese Communist Party’s bid to take greater control over the blockchain and cryptocurrency sector – the main characteristic of which is to defy central control. 

Microsoft has seized domains used by the Chinese cybercrime gang known as Nickel (or APT15). Forty-two different URLs, which support unique websites, have been linked to the cyber-espionage group and used to launch attacks on the rest of the world. Tom Burt, Microsoft VP of Customer Security & Trust, said this week the domains had been used to siphon data from government agencies, think tanks and human rights organisations. These are just the latest seizures; in all Microsoft has apparently taken control so far of more than 10,000 high-threat domains used by cybercriminals.

Apple’s frontline employees are sidelined, bullied and ignored in favour of customers. According to detailed new reports from the Verge, which spoke to a number of former Apple employees, the people who work in company stores are used to having their complaints about pay and working conditions ignored. The basis of the claims is that Apple manages its people with algorithms and computerised workflow systems, rather than human interaction. That said, one shocking account, of an Apple Store worker called Mark Calivas, describes how his bullying manager drove him to depression and eventual suicide, while Apple remained deaf to his complaints. Read the original story here. 

If you or someone you know is thinking about suicide or dealing with anxiety, depression or simply needs to talk, please contact the National Suicide Prevention Helpline UK on 0800 689 5652.

Amazon workers are given the choice of “gamifying” their work days. Footage from an Amazon warehouse appears to show a job board and various “achievements” that employees can notch up by completing tasks on the job in a game called “FC Games”. Amazon said the system was “completely optional” and that employees “can play anonymously, or not play at all”. Perhaps, but the mission to “Login to FC Games for 100 Days” appears to encourage use of the system; and staff can “Make History” by picking 1,000,000 units for sale and shipping.

Oxford University academics are calling for three urgent actions from Meta. First, they want “gold-standard transparency” on the findings of research they’ve done on child and adolescent mental health. Second, they want Meta to contribute resources and expertise to global child and adolescent research. Lastly, they want Meta to establish an independent oversight trust (separate from the Oversight Board) specifically to tackle child and adolescent mental health problems. You can read their open letter here. It follows the WSJ’s publication of the Facebook Files, which exposed Facebook’s inaction over evidence that young female Instagram users were suffering mental health problems as a result of their experiences on the platform. Instagram’s Chief, Adam Mosseri, will testify to Congress on Instagram’s toxic impact.

Another important story: Rohingya refugees in the US and UK are suing Meta Platforms over failure to tackle misinformation, hate speech and incitement to violence on Facebook in Myanmar, where tens of thousands of people have died and been displaced. A stunning investigation by the MIT Technology Review explains how the failure may have been driven by a social media economy that funds misinformation through clickbait farms.

Thanks for reading,

Alexi Mostrous
@AlexiMostrous

Luke Gbedemah
@LukeGbedemah