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The Encrypted Messaging Dilemma: Balancing Censorship and Freedom

The Encrypted Messaging Dilemma: Balancing Censorship and Freedom

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Experts are of the opinion that governments need to work hand-in-hand with encryption-centric service providers to combat illegal activities on their platforms.

Encrypted messaging services have always presented a tough challenge for government agencies all over the world. On one hand, they allow for freedom of speech, but on the other, they enable miscreants and bad actors to facilitate nefarious deeds. In this regard, on July 2, European law enforcement authorities arrested over 800 individuals that were allegedly partaking in shady activities through the use of an encrypted chat service called EncroChat. 

The messaging platform has servers based out of France and claims to provide users with “worry-free secure communications.” According to the BBC, EncroChat has a customer base of more than 60,000 people, more than 10,000 of whom are based in Britain. Immediately after the incident came to light, EncroChat’s official website and messaging service were put on temporary hold. To gain a better overview of the matter, Cointelegraph reached out to Tim Mackey, principal security strategist for design automation company Synopsys, who said:

“Authorities likely balanced the future value associated with identifying additional criminals against the already identified criminal activity. In effect, they may have determined that stopping a specific impending crime outweighed any potential returns from keeping EncroChat operational.”

A similar outlook is also shared by Brian Kerr, CEO at Kava, a multi-chain DeFi Lending platform, who said that the government was right in accessing Encrochat’s servers to put an end to the criminal activities happening on the network.

Encryption still on the menu?

As issues related to data leakages — especially those in regard to various mainstream messaging services (such as Whatsapp, TrueDialog and Telegram) — continue to surface on a regular basis, many experts believe that it is worth exploring the subject of whether or not most encryption platforms today lay enough importance on privacy and customer security. 

On the subject, John Jefferies, CEO of CipherTrace, a crypto forensics firm, told Cointelegraph that customer privacy should always be taken into prime consideration by platform developers of such end-to-end encryption messengers. He further emphasized the point by saying that it was especially important to focus on privacy during times like these (i.e., the COVID-19 pandemic), where increased usage of digital platforms could lead to more instances of hacks, privacy invasions and data leaks. Jefferies further added:

“Encrypted communication is nuanced so platforms must ensure they have effective implementation of SSL with certificates issued from a known root of trust utilizing strong cipher suites. To further improve security, multi-factor authentication should be available for users joining conferences and the system should double-check users on unknown devices.“

Similarly, Jonathan Zerah, head of marketing for Status Network, an encrypted messenger, told Cointelegraph that despite there being many “so-called privacy and security-oriented” communication tools available in the market today, most of the security features being offered were built atop protocols that place a large amount of ownership and responsibility on centralized companies.

He further added that more often than not, these centralized communication tools employ a client-server model to transport and route messages throughout the world as well as require users to input their phone numbers or email addresses to set up and create an account — sensitive data that most firms usually store and manage using lax security protocols. Zerah added: “This places a massive responsibility on the companies managing these platforms to protect that data and the servers that store it.”

Lastly, to mitigate privacy issues related to popular messaging apps, experts like Zerah agree that it is time to establish newer safety protocols that return ownership of data to the individual, remove centralized chokepoints and attack vectors seamlessly.

Governments purging encryption-based tech?

Recently, a bill was introduced into the United States Senate that effectively seeks to put an end to using end-to-end encryption in messaging services. A similar issue was also raised in the ministerial meeting of the nations that make up the “Five Eyes” intelligence community comprising Australia, Canada, New Zealand, the United Kingdom and the United States. These developments seem to suggest that law enforcement agencies all over the world are making a concerted effort to eliminate encryption-based privacy technologies.

In Mackey’s view, due to the growing number of data breaches in the world today, there is a steady increase in the volume of data protection legislation being set into motion. These legislative efforts aim to limit the range of data that businesses can collect while increasing the security of any sensitive information that businesses process and retain. 

However, even though it may be appealing for governments to attempt to limit the use of encryption technologies under the auspices reducing criminal activity, the situation around EncroChat clearly shows that criminal groups can easily create their own workarounds if the need arises. In this regard, the recently tabled Lawful Access to Encrypted Data Act — which would require companies to implement ways to decrypt data upon court order — could become a viable way through which a fine balance between regulation and encryption could be established.

That being said, Chris Hauk, a consumer privacy advocate as well as author for Pixel Privacy, an online privacy and security blog, believes that no government agency should ever have the legal right to outlaw encrypted messaging platforms. Furthermore, he believes that providing any sort of backdoor access to law enforcement agencies could end up opening new avenues for bad actors to exploit, thus defeating the primary goal of any encrypted messaging platform.

Collaboration between governments and service providers possible?

While the idea of encryption service providers and government agencies coming to a common consensus on handling privacy-related matters sounds like a perfect outcome on paper, in actuality, such a vision seems far-fetched because any review of “harmful content,” by default, requires platform operators themselves to have direct access to their customer information. 

Moreover, once such a backdoor is opened, there will be nothing stopping governments from having the ability to go through everyone’s personal correspondence under the guise of public safety — something that has already been suggested by whistleblower Edward Snowden and his team. Leaks in recent years have showcased how governments all over the world, particularly the United States, have been proactively working with tech companies to harvest data in a totally indiscriminate manner.

It’s also worth mentioning that implementing a blanket ban on end-to-end encryption isn’t really possible. While certain legal roadblocks can definitely be deployed, if developers continue to use and devise apps using the technology, there’s not much that anyone can really do. Thus, in essence, government agencies should try and come to an agreement with businesses running such services in order to curb illegal activities on their platforms.

Lastly, providing his point of view on this situation, Chris Howell, co-founder and chief technology officer of Wickr, a messenger with end-to-end encryption, told Cointelegraph that any encryption service can be used for good or bad. 

Although it is disappointing every time that criminals exploit privacy-oriented messengers for their personal gains, he does believe the answer is not to ban such services or destroy encryption, privacy and security for everyone through the use of backdoor gateways. He said, “Our ability to protect data and intellectual property from these same bad actors via strong encryption, solid security products, etc. does far more good for mankind than harm,” adding that: 

“I think when a service has privacy and security issues, its legitimate users suffer far more than its bad actors. Of course, no legitimate service wishes to be a haven for bad actors. Most of us expend significant resources honoring law enforcement information requests and believe it is our responsibility to do so. But the reason we build things is for customers and their needs, and I’m not hearing a lot of them ask us to weaken our security so that bad actors might suffer.”

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Supreme Court Rules Public Officials May Block Their Constituents On Social Media

Supreme Court Rules Public Officials May Block Their Constituents On Social Media

Authored by Matthew Vadum via The Epoch Times (emphasis…

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Supreme Court Rules Public Officials May Block Their Constituents On Social Media

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

Public officials may block people on social media in certain situations, the Supreme Court ruled unanimously on March 15.

People leave the U.S. Supreme Court in Washington on Feb. 21, 2024. (Kevin Dietsch/Getty Images)

At the same time, the court held that public officials who post about topics pertaining to their work on their personal social media accounts are acting on behalf of the government. But such officials can be found liable for violating the First Amendment only when they have been properly authorized by the government to communicate on its behalf.

The case is important because nowadays public officials routinely reach out to voters through social media on the same pages where they discuss personal matters unrelated to government business.

When a government official posts about job-related topics on social media, it can be difficult to tell whether the speech is official or private,” Justice Amy Coney Barrett wrote for the nation’s highest court.

The case is separate from but brings to mind a lawsuit that several individuals previously filed against former President Donald Trump after he blocked them from accessing his social media account on Twitter, which was later renamed X. The Supreme Court dismissed that case, Biden v. Knight First Amendment Institute, in April 2021 as moot because President Trump had already left office.

At the time of the ruling, the then-Twitter had banned President Trump. When Elon Musk took over the company he reversed that policy.

The new decision in Lindke v. Freed was written by Justice Amy Coney Barrett.

Respondent James Freed, the city manager of Port Huron, Michigan, used a public Facebook account to communicate with his constituents. Petitioner Kevin Lindke, a resident of Port Huron, criticized the municipality’s response to the COVID-19 pandemic, including accusations of hypocrisy by local officials.

Mr. Freed blocked Mr. Lindke and others and removed their comments, according to Mr. Lindke’s petition.

The U.S. Court of Appeals for the 6th Circuit ruled for Mr. Freed, finding that he was acting only in a personal capacity and that his activities did not constitute governmental action.

Mr. Freed’s attorney, Victoria Ferres, said during oral arguments before the Supreme Court on Oct. 31, 2023, that her client didn’t give up his rights when using social media.

This country’s 21 million government employees should have the right to talk publicly about their jobs on personal social media accounts like their private-sector counterparts.”

The position advocated by the other side would unfairly punish government officials, and “will result in uncertainty and self-censorship for this country’s government employees despite this Court repeatedly finding that government employees do not lose their rights merely by virtue of public employment,” she said.

In Lindke v. Freed, the Supreme Court found that a public official who prevents a person from comments on the official’s social media pages engages in governmental action under Section 1983 only if the official had “actual authority” to speak on the government’s behalf on a specific matter and if the official claimed to exercise that authority when speaking in the relevant social media posts.

Section 1983 refers to Title 42, U.S. Code, Section 1983, which allows people to sue government actors for deprivation of civil rights.

Justice Barrett wrote that according to the so-called state action doctrine, the test for “actual authority” must be “rooted in written law or longstanding custom to speak for the State.”

“That authority must extend to speech of the sort that caused the alleged rights deprivation. If the plaintiff cannot make this threshold showing of authority, he cannot establish state action.”

“For social-media activity to constitute state action, an official must not only have state authority—he must also purport to use it,” the justice continued.

State officials have a choice about the capacity in which they choose to speak.

Citing previous precedent, Justice Barrett wrote that generally a public employee claiming to speak on behalf of the government acts with state authority when he speaks “in his official capacity or” when he uses his speech to carry out “his responsibilities pursuant to state law.”

“If the public employee does not use his speech in furtherance of his official responsibilities, he is speaking in his own voice.”

The Supreme Court remanded the case to the 6th Circuit with instructions to vacate its judgment and ordered it to conduct “further proceedings consistent with this opinion.”

Also on March 15, the Supreme Court ruled on O’Connor-Ratcliff v. Garnier, a related case. The court’s sparse, unanimous opinion was unsigned.

Petitioners Michelle O’Connor-Ratcliff and T.J. Zane were two elected members of the Poway Unified School District Board of Trustees in California who used their personal Facebook and Twitter accounts to communicate with the public.

Respondents Christopher Garnier and Kimberly Garnier, parents of local students, “spammed Petitioners’ posts and tweets with repetitive comments and replies” so the school board members blocked the respondents from the accounts, according to the petition filed by Ms. O’Connor-Ratcliff and Mr. Zane.

But the Garniers said they were acting in good faith.

“The Garniers left comments exposing financial mismanagement by the former superintendent as well as incidents of racism,” the couple said in a brief.

The U.S. Court of Appeals for the 9th Circuit found in favor of the Garniers, holding that elected officials using social media accounts were participating in a public forum.

The Supreme Court ruled in a three-page opinion that because the 9th Circuit deviated from the standard the high court articulated in Lindke v. Freed, the 9th Circuit’s decision must be vacated.

The case was remanded to the 9th Circuit “for further proceedings consistent with our opinion” in the Lindke case, the Supreme Court stated.

Tyler Durden Sun, 03/17/2024 - 22:10

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Home buyers must now navigate higher mortgage rates and prices

Rates under 4% came and went during the Covid pandemic, but home prices soared. Here’s what buyers and sellers face as the housing season ramps up.

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Springtime is spreading across the country. You can see it as daffodil, camellia, tulip and other blossoms start to emerge. 

You can also see it in the increasing number of for sale signs popping up in front of homes, along with the painting, gardening and general sprucing up as buyers get ready to sell. 

Which leads to two questions: 

  • How is the real estate market this spring? 
  • Where are mortgage rates? 

What buyers and sellers face

The housing market is bedeviled with supply shortages, high prices and slow sales.

Mortgage rates are still high and may limit what a buyer can offer and a seller can expect.  

Related: Analyst warns that a TikTok ban could lead to major trouble for Apple, Big Tech

And there's a factor not expected that may affect the sales process. Fixed commission rates on home sales are going away in July.

Reports this week and in a week will make the situation clearer for buyers and sellers. 

The reports are:

  • Housing starts from the U.S. Commerce Department due Tuesday. The consensus estimate is for a seasonally adjusted rate of about 1.4 million homes. These would include apartments, both rentals and condominiums. 
  • Existing home sales, due Thursday from the National Association of Realtors. The consensus estimate is for a seasonally adjusted sales rate of about 4 million homes. In 2023, some 4.1 million homes were sold, the worst sales rate since 1995. 
  • New-home sales and prices, due Monday from the Commerce Department. Analysts are expecting a sales rate of 661,000 homes (including condos), up 1.5% from a year ago.

Here is what buyers and sellers need to know about the situation. 

Mortgage rates will stay above 5% 

That's what most analysts believe. Right now, the rate on a 30-year mortgage is between 6.7% and 7%. 

Rates peaked at 8% in October after the Federal Reserve signaled it was done raising interest rates.

The Freddie Mac Primary Mortgage Market Survey of March 14 was at 6.74%. 

Freddie Mac buys mortgages from lenders and sells securities to investors. The effect is to replenish lenders' cash levels to make more loans. 

A hotter-than-expected Producer Price Index released that day has pushed quotes to 7% or higher, according to data from Mortgage News Daily, which tracks mortgage markets.

Home buyers must navigate higher mortgage rates and prices this spring.

TheStreet

On a median-priced home (price: $380,000) and a 20% down payment, that means a principal and interest rate payment of $2,022. The payment  does not include taxes and insurance.

Last fall when the 30-year rate hit 8%, the payment would have been $2,230. 

In 2021, the average rate was 2.96%, which translated into a payment of $1,275. 

Short of a depression, that's a rate that won't happen in most of our lifetimes. 

Most economists believe current rates will fall to around 6.3% by the end of the year, maybe lower, depending on how many times the Federal Reserve cuts rates this year. 

If 6%, the payment on our median-priced home is $1,823.

But under 5%, absent a nasty recession, fuhgettaboutit.

Supply will be tight, keeping prices up

Two factors are affecting the supply of homes for sale in just about every market.

First: Homeowners who had been able to land a mortgage at 2.96% are very reluctant to sell because they would then have to find a home they could afford with, probably, a higher-cost mortgage.

More economic news:

Second, the combination of high prices and high mortgage rates are freezing out thousands of potential buyers, especially those looking for homes in lower price ranges.

Indeed, The Wall Street Journal noted that online brokerage Redfin said only about 20% of homes for sale in February were affordable for the typical household.

And here mortgage rates can play one last nasty trick. If rates fall, that means a buyer can afford to pay more. Sellers and their real-estate agents know this too, and may ask for a higher price. 

Covid's last laugh: An inflation surge

Mortgage rates jumped to 8% or higher because since 2022 the Federal Reserve has been fighting to knock inflation down to 2% a year. Raising interest rates was the ammunition to battle rising prices.

In June 2022, the consumer price index was 9.1% higher than a year earlier. 

The causes of the worst inflation since the 1970s were: 

  • Covid-19 pandemic, which caused the global economy to shut down in 2020. When Covid ebbed and people got back to living their lives, getting global supply chains back to normal operation proved difficult. 
  • Oil prices jumped to record levels because of the recovery from the pandemic recovery and Russia's invasion of Ukraine.

What the changes in commissions means

The long-standing practice of paying real-estate agents will be retired this summer, after the National Association of Realtors settled a long and bitter legal fight.

No longer will the seller necessarily pay 6% of the sale price to split between buyer and seller agents.

Both sellers and buyers will have to negotiate separately the services agents have charged for 100 years or more. These include pre-screening properties, writing sales contracts, and the like. The change will continue a trend of adding costs and complications to the process of buying or selling a home.

Already, interest rates are a complication. In addition, homeowners insurance has become very pricey, especially in communities vulnerable to hurricanes, tornadoes, and forest fires. Florida homeowners have seen premiums jump more than 102% in the last three years. A policy now costs three times more than the national average.

Related: Veteran fund manager picks favorite stocks for 2024

 

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Default: San Francisco Four Seasons Hotel Investors $3 Million Late On Loan As Foreclosure Looms

Default: San Francisco Four Seasons Hotel Investors $3 Million Late On Loan As Foreclosure Looms

Westbrook Partners, which acquired the San…

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Default: San Francisco Four Seasons Hotel Investors $3 Million Late On Loan As Foreclosure Looms

Westbrook Partners, which acquired the San Francisco Four Seasons luxury hotel building, has been served a notice of default, as the developer has failed to make its monthly loan payment since December, and is currently behind by more than $3 million, the San Francisco Business Times reports.

Westbrook, which acquired the property at 345 California Center in 2019, has 90 days to bring their account current with its lender or face foreclosure.

Related

As SF Gate notes, downtown San Francisco hotel investors have had a terrible few years - with interest rates higher than their pre-pandemic levels, and local tourism continuing to suffer thanks to the city's legendary mismanagement that has resulted in overlapping drug, crime, and homelessness crises (which SF Gate characterizes as "a negative media narrative).

Last summer, the owner of San Francisco’s Hilton Union Square and Parc 55 hotels abandoned its loan in the first major default. Industry insiders speculate that loan defaults like this may become more common given the difficult period for investors.

At a visitor impact summit in August, a senior director of hospitality analytics for the CoStar Group reported that there are 22 active commercial mortgage-backed securities loans for hotels in San Francisco maturing in the next two years. Of these hotel loans, 17 are on CoStar’s “watchlist,” as they are at a higher risk of default, the analyst said. -SF Gate

The 155-room Four Seasons San Francisco at Embarcadero currenly occupies the top 11 floors of the iconic skyscrper. After slow renovations, the hotel officially reopened in the summer of 2021.

"Regarding the landscape of the hotel community in San Francisco, the short term is a challenging situation due to high interest rates, fewer guests compared to pre-pandemic and the relatively high costs attached with doing business here," Alex Bastian, President and CEO of the Hotel Council of San Francisco, told SFGATE.

Heightened Risks

In January, the owner of the Hilton Financial District at 750 Kearny St. - Portsmouth Square's affiliate Justice Operating Company - defaulted on the property, which had a $97 million loan on the 544-room hotel taken out in 2013. The company says it proposed a loan modification agreement which was under review by the servicer, LNR Partners.

Meanwhile last year Park Hotels & Resorts gave up ownership of two properties, Parc 55 and Hilton Union Square - which were transferred to a receiver that assumed management.

In the third quarter of 2023, the most recent data available, the Hilton Financial District reported $11.1 million in revenue, down from $12.3 million from the third quarter of 2022. The hotel had a net operating loss of $1.56 million in the most recent third quarter.

Occupancy fell to 88% with an average daily rate of $218 in the third quarter compared with 94% and $230 in the same period of 2022. -SF Chronicle

According to the Chronicle, San Francisco's 2024 convention calendar is lighter than it was last year - in part due to key events leaving the city for cheaper, less crime-ridden places like Las Vegas

Tyler Durden Sun, 03/17/2024 - 18:05

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