💵The Bulletin #35: Crypto goes on Trial, SCOTUS and Content Moderation, and a Californian Bill Addressing Diversity in VC
In this week's bulletin -- Sam Bankman-Fried to stand trial on charges of fraud and money laundering, the future of content moderation on tech platforms and a potential CA bill on VC diversity.
Hey everyone! We have a beautiful October week ahead of us, with warmer weather and lots of sun☀️. Get out there and enjoy it while it lasts! Fall is the best <3
📉FTX’s Sam Bankman-Fried to stand trial on Tuesday
Sam Bankman-Fried, the disgraced founder of FTX, is set to stand trial in a Manhattan court on federal charges of fraud and money laundering, following the collapse of his digital currency exchange. FTX's collapse in November had triggered a domino effect, pushing other high-profile companies into bankruptcy and prompting government intervention.
His case represents a significant corporate downfall in recent years and symbolizes the excesses and questionable practices within the cryptocurrency industry. The trial will shed light on the financial engineering, scams, and misleading publicity campaigns that fueled the crypto industry's rapid growth during the pandemic.
Jury selection begins soon, and the trial is expected to last six weeks, attracting significant media attention.
Bankman-Fried faces seven criminal counts and potential life imprisonment if convicted, with three of his close advisers having already pleaded guilty and agreeing to testify against him. He has pleaded not guilty, and there is uncertainty about whether Bankman-Fried will testify in his own defense.
Overall, the trial is expected to reveal evidence of fraud and money laundering, with prosecutors presenting notes, spreadsheets, and testimony from investors and customers who lost money in FTX's collapse. We await the verdict with anticipation.
📱The Supreme Court to hear cases over the right to moderate content
The Supreme Court is set to decide if Texas and Florida have the constitutional authority to prevent social media companies from banning or restricting users over potentially harmful rhetoric. Both states have passed legislation aimed at curbing tech companies' ability to stifle conservative opinions, while they argue that these laws ensure equal platform access. Tech companies, represented by groups including NetChoice and the Computer and Communications Industry Association, assert that these laws violate their free speech rights. The Supreme Court's ruling on these social media cases is expected next year.
⚖️Key Points:
Legislation in these states aims to prevent tech companies from stifling conservative viewpoints.
Texas and Florida argue that these laws ensure equal access to platforms, while tech companies claim they violate free speech rights.
Lower courts have had differing opinions on how to handle these laws.
The laws were introduced in response to former President Donald Trump's Twitter ban.
The Biden administration also asks the Supreme Court to consider whether these laws violate tech companies' First Amendment rights.
The Supreme Court's announcement comes as they grapple with applying laws from the analog age to the digital world.
The justices had previously agreed to decide whether public officials can block critics from commenting on their social media accounts.
Proponents of the laws argue that social media companies lean liberal and censor conservative ideas, while the tech sector warns against preventing the removal of extremism and hate speech.
The Supreme Court's decision is expected next year.
🏖️New bill addressing race and gender in VC to be deliberated in California
California is considering a bill that would require venture capital firms to disclose the race and gender of the founders they fund. This transparency measure has sparked a debate between its proponents, who see it as a means to address bias in the industry, and its critics, who view it as government overreach.
The venture capital industry has long been criticized for its lack of diversity, with a significant portion of funding overwhelmingly directed toward white male founders. Statistics reveal that only 2% of venture capital funding went to companies founded by all-female teams, and even less to those led by Black women and Latinas.
Civil rights groups and female entrepreneurs have supported the bill, viewing it as a step toward leveling the playing field in Silicon Valley. Diversity in venture capital is not only a matter of equity but also makes good business sense. However, the business community has opposed the legislation, characterizing it as bureaucratic overreach. They also argue that it violates privacy and lacks justification.
The legislation, if signed into law, would apply to venture capital firms based in California, with implications for those investing in the state. This includes major players in Silicon Valley, such as Sequoia Capital, Andreessen Horowitz, Soma Capital, and Khosla Ventures.
This legislation fits into the broader national discussion on diversity, equity, and inclusion. The bill is currently awaiting Governor Gavin Newsom's decision, with a deadline for signing or vetoing it by October 14th. Its potential impact is not limited to California, as it could influence discussions on diversity and equity in the venture capital industry across the United States.
We believe that this legislation could be a significant step toward addressing the lack of diversity in venture capital funding, and are closely following its outcome.
That’s it for this week, feel free to email me at zyn_yee_ang@brown.edu with any inquiries!
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