🗞️ Adam Neumann's Back, TikTokTrak, & Crypto's Banking Woes
This Week: Adam Neumann finds himself with a new billion-dollar start-up, TikTok is facing a fresh privacy battle, and the FDIC is going after Crypto exchanges. Plus, a shake-up at Black Girls Code, and how to deal with politically sensitive cases.
If you've ever been highly suspicious and deeply cynical of Silicon Valley's dealmaking, this one's for you: Adam Neumann, the notorious founder of WeWork who crashed out of his company in spectacular fashion, is back. This time, Neumann is getting into the residential real estate game with a venture called Flow. Details are scant beyond being an “alternative to 'soulless' apartment living where you gain neither friends nor equity amid an affordable housing shortage,” says The Hustle. But here's the kicker: despite Neumann's notoriety, Flow already has backing from Andreessen Horowitz, one of the largest and most respected names in the Valley.
Since exiting WeWork in 2019, Neumann has bought up 3,000 apartment units in Atlanta, Nashville, and south Florida that will be associated with Flow. Yet, the venture seems all too similar to WeLive, an idea Neumann was planning while at WeWork.
Andreessen Horowitz has put $350 million into Flow, which values the company at $1 billion.
Who Gets In?
Neumann's comeback begs the question: who gets a second chance? For investor Kathryn Finney, Andreessen Horowitz's bet on Neumann is a “slap in the face” to female founders, black entrepreneurs, and other marginalized people. “It sends a signal that you can really mess up as a white guy and still get second chances to win,” she told Fortune, adding that the sum total of all investment in black start-ups for the second quarter of 2022 was $324 million — nearly 8% less than Andreessen Horowitz's single investment in Flow.
Neumann's resurrection does paint an unfavorable picture of Silicon Valley and the VC world. Similarly, his entrance into the residential real estate space gives a strong 2008 housing bubble vibe.
We couldn’t help but share our latest release on Not Billable. This time around, we’re chatting with Maureen Frangopoulos, Senior Legal Director, Uber about how she tackles being a lawyer, a mom, and an overall kickass leader to her legal team.
Give ‘em Grace, Lawtrades
Every keystroke you make in TikTok's web browser can be tracked, according to new research by Felix Krause. The former Google engineer turned privacy researcher said it was not clear if and how TikTok was using the function, but that the popular social media platform was capable of tracking “users’ online habits if it chose to do so,” reports The New York Times. To be clear, the functionality only applies to the browser window that opens when you click a link to something outside the app.
“The way TikTok’s custom in-app browser monitors keystrokes is problematic, as the user might enter their sensitive data such as login credentials on external websites,” Jane Manchun Wong, a security researcher told the Times. This data could then be used to surveil users across the internet.
TikTok has responded to the research stating that the findings are misleading and that the feature is for “debugging, troubleshooting and performance monitoring.” The company added that “contrary to the report’s claims, we do not collect keystroke or text inputs through this code.”
TikTok and its parent company ByteDance have been the subject of much privacy data scrutiny in the US. To be sure, Meta has fueled the company's negative image through a smear campaign carried out by political consulting firm Targeted Victory, says Engadget. Even so, earlier this year, nine Republican senators sent a letter to TikTok's head with concerns about the privacy of Americans' data. CEO Shou Zi Chew assured the senators that the company is currently transferring American user data over to Oracle's servers.
TikTok has become a sort of defacto boogieman both for American politicians' crusade against China and for Silicon Valley tech giants fearful of its ascension. This makes the social media platform a hot target, yet, would we be more comfortable if Instagram or Gmail were tracking our every keystroke?
🖋 Mark Your Calendar
What are you doing on Thursday, September 8th at 3 pm ET / 12 pm PT? If the answer is nada, it looks like you’ve got a date with Andowah Newton, Greg McLaughlin, and Zac Henderson. That is, at our next panel discussion! The topic of the day? How to mitigate litigating costs of outside counsel.
On July 20th, Brett Harrison, the president of crypto exchange FTX US, published a tweet claiming that direct deposits from employers to the exchange are stored in FDIC-insured accounts. The problem, of course, is that it's untrue. FTX is in no way FDIC insured. In response, the Federal Deposit Insurance Corporation sent a cease and desist letter to five crypto firms (including FTX US) instructing them to immediately stop making misleading and/or false claims about the insurance status of their accounts, writes CNBC.
In a press release following the letters, the governmental agency said that “each of these companies made false representations — including on their websites and social media accounts — stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.”
Harrison quickly deleted his tweet after the letter, then posted that he only meant to clarify that US currency was held in FDIC-insured banks — something that no one had questioned. He added, “We really didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance.”
FTX's founder and CEO, Sam Bankman-Fried, has become a default patriarch of crypto in recent years and has even been extending lines of credit to other crypto platforms during this year's crypto market rout. “We're starting to get a few more companies reaching out to us,” Bankman-Fried told Reuters, adding that he has a “few billion” on hand to help struggling firms.
Much like an attorney can say something in court before the judge orders it stricken from the record, crypto platforms are doing their best to appear legitimate and safe as their industry takes a huge dip. More than anything, though, it's become incredibly clear that crypto is well-past-due for federal regulations.
📤 What Else We're Forwarding
Unwanted Exit: Kimberly Bryant, founder, and CEO of Black Girls Code, has been officially fired from her company by its board, reports TechCrunch. In response, Bryant filed a lawsuit in federal court claiming wrongful suspension and a conflict of interest by board member Heather Hiles who, she alleges, wants “to gain control of over $30 million in donated philanthropic funds.”
Executive Treatment: Should a president (past or current) get special legal treatment, especially in a politically sensitive case, asks the New Yorker? One thing is for certain: the court of public opinion should not be the only check on a President's power.
Loans Begone: The White House has just announced Biden’s plan to nix up to $10K of student debt for millions of Americans and up to $20K for low-income borrowers reports Politico. He also plans to announce an extension on the pause of payments and interest through Dec 31st — for the “final time.”
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See ya next week!