🗞️ Texas Tackles Twitter, What's UST, & Is Privacy Bipartisan?
This week: Texas gets divisive with Big Tech, stable coin gets wobbly, and the future of federal privacy law. Plus, trans rights in Texas, gun rights in California, and landmark settlements in Florida.
Social media platforms operating in Texas, take note: the Fifth Circuit Court of Appeals has granted Texas Attorney General Ken Paxton's stay on HB 20 — a law that may put many social networks at risk in the state. The controversial bill seems designed to block sites like Facebook and Twitter from "discriminating against" Texas users based on their viewpoints. In other words, if a Texan posts a racist image on their account, for example, this ruling makes it much harder for these social media giants to remove the content or take action against the user.
“Because HB 20 is constitutionally rotten through and through, we are weighing our options and plan to appeal the order immediately,” said Carl Szabo, vice president and general counsel of NetChoice, a tech trade group, reports The Verge.
This ruling may be based on a misunderstanding of tech and of the internet by the judges. As Protocol.com notes, one of the presiding judges told lawyers for NetChoice and the CCIA, “Your clients are internet providers, not websites.” Of course, Twitter, Alphabet, and Meta are websites, not ISPs. A second judge furthered this misunderstanding by saying, “Under your theory, could Verizon decide that they’re going to overhear every phone call … and when they hear speech they don’t like, they terminate the phone call?” Well, guess you don’t have to know much about a topic to rule on it.
Big Tech was definitely caught off guard when HB 20 originally passed into law, and again when it was upheld by the Fifth Circuit. No doubt the ruling will be appealed and passed on to the Supreme Court where, in previous years, the controversial law was likely to be struck down, but recent rulings have shown that all bets are off in regards to the Supreme Court today.
🎧 What We’re Listening To
This week, we’re listening to Donald Byrd, a leading jazz trumpeter, and vocalist from Detroit. Coming to recognition in the ’50s and ’60s, Byrd popularized a mixture of jazz, rhythm and blues, funk, and soul into what would be known as bebop jazz. Recorded in 1961, Free Form features Wayne Shorter on the sax, Herbie Hancock on the piano, Butch Warren on the bass, and Billy Higgins on the drums. It was released in 1966 under the label Blue Note and later remastered for CD in 2003. This album served as a breakthrough in Byrd’s early career that showcased both his versatility and distinctive taste.
What happens when a cryptocurrency that is supposed to stay stable at $1 suddenly loses 70% of its value? Such was the case with TerraUSD (or UST), a cryptocurrency that was pegged to another cryptocurrency called a Luna Token, that recently collapsed. First, how does it work? One UST was always set to be exchangeable for $1 worth of Luna. That means that if UST is worth 50 cents, you can buy a dollar's worth of it (2 UST) and then trade them for 2 Luna at the $1 per exchange rate (so, 2 UST = $2 worth of Luna) and now your investment just doubled. So what went wrong? Earlier this month, about $2 billion of UST were suddenly depegged (taken out of this UST/Luna exchange) and the currency went haywire. Now Luna is worth one cent, and UST is worth 30 cents (if you buy a dollar’s worth of UST, you can no longer "uptrade it" into Luna and profit). Suffice to say, no one is buying, and a lot of people lost a lot of money.
There's one massive roadblock to UST's worth: only $100 million of UST can be exchanged for Luna per day.
It's unclear who unpegged the $2 billion in UST or why, notes CNET, though some speculate it was a coordinated attack on UST to short the currency.
Trouble For Crypto
“The question in our minds becomes, does what happened to UST spread to other stablecoins?” Mike Boroughs, the co-founder of crypto investments firm Fortis Digital, told CNET, “If big whales found a playbook here that works to attack UST, we worry they may reuse that playbook in other areas of the market.” In fact, all this volatility has intensified calls for regulation on crypto. “If you look at the risks we need to address, they are multiple and there is a wall of worry about this [crypto] in the conversations at an institutional level,” Ashley Alder, chair of the International Organization of Securities Commissions (IOSCO), said, reports Reuters. A global crypto regulating body may form by next year, and the SEC is already in talks about imposing rules on stablecoins.
Sometimes it takes a catastrophe to bring about regulation, and TerraUSD's collapse may be just the watershed moment that crypto needed to become a more regulated market.
🎥 Coming Up Next
In case you missed it, we have two stellar events due up in May that we think you should join.
How Non-JDs Can Save You Time & Money | Thurs, May 26, 3 pm ET
Join our own Lauren O’Neill as she moderates a discussion with Trina Walker (Director, Legal Change, Trinet), Kelsey Copeland (Sr Corporate Counsel, NASCAR), and Eric Lentell (Deputy General Counsel, Archer) on which non-attorney roles are best for your legal team, and how to get the buy-in for them.
Legal Freelancer Bootcamp: How to Work in Billable Hours | Tues, May 31, 1:30 pm ET
No. There is no single unifying data privacy law currently on federal books. Nor has Congress passed any broad law protecting all Americans from data harvesting and/or other data privacy violations. What is emerging, however, is a growing patchwork of smaller laws that do help Americans in some ways. More importantly, though, we may be seeing a bipartisan movement to pass stricter data privacy laws at the federal level.
Tech trade groups are also in support of a Congressional bill because they worry the Democratic-controlled FTC is gearing up to pass regulations on its own that would be way more disruptive to the industry than what they believe a bipartisan Congressional bill would achieve.
The California Case
In 2018, California passed the first data privacy law in the country. As the New York Times writes, it enabled Golden State residents to see what data large internet companies have you on, who they've shared it with, and ask that it not be sold, or even deleted entirely. Yet, if the California bill was far-reaching, it sparked lobbyists to fight laws that came after it (see: Virginia and Utah) and scale them back, according to Protocol.com. Today, states are unlikely to see a comprehensive data privacy law like the one California enacted passed in their own capitals.
It's increasingly rare in our hyper-polarized climate to find a topic that garners bipartisan support — no matter the motives. Will Congress be able to seize the moment and pass a broad data privacy law that protects Americans for years to come?
🐦 Twitter, But Make It Legal
Twitter is an ever-evolving and sometimes scary place. That is, if you’re not a tech-bro with an NFT as your profile picture. Legal peeps … now is our time to shine. If you haven’t yet, add us on Twitter for legal memes, content bites, event reminders, and much more.
📤 What Else We're Forwarding
Texas Abuse: The Texas Supreme Court has affirmed Governor Abbott's Feb. 22 directive to investigate gender-affirmation treatment for minors as child abuse, clearing the way for the state's child welfare agency to resume investigations, reports NPR. The state's supreme court overturned a lower court's ruling from March that barred the directive.
Gun Rights: If you're under 21, you still have the right to buy a semi-automatic weapon, says the 9th U.S. Circuit Court of Appeals, notes the ABA Journal. The ruling strikes down California's ban on the sale of these guns to persons under 21.
Surfside Settlement: Almost a year after the collapse of a condo tower in Surfside, Florida, killed 98 people, families have reached a roughly $1 billion settlement with the developer and insurance company, says the New York Times. How the money is split among relatives of the victims will be decided in the coming weeks.
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See ya next week!