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Monday, August 8, 2022

Hillicon Valley — DOJ arrests couple connected to crypto hack

Today is Tuesday. Welcome to Hillicon Valley, detailing all you need to know about tech and cyber news from Capitol Hill to Silicon Valley. Subscribe here: thehill.com/newsletter-signup. 

Follow The Hill’s tech team, Chris Mills Rodrigo (@millsrodrigo) and Rebecca Klar (@rebeccaklar_), for more coverage.  

The Department of Justice said a New York couple was arrested and charged over alleged links to a 2016 cryptocurrency hack.  

Meanwhile, a group of faith leaders urged Meta to permanently drop plans to create an Instagram for kids under 13, and President BidenJoe BidenFox News host Brian Kilmeade hits Trump on Arizona election claim: ‘That’s an outright lie’ Putin says proposals made in Macron talks are possible as ‘basis’ for further steps Biden to appoint son of late Sen. John McCain to Naval Academy board MORE cheered the creation of a facility to build electric vehicle chargers in Tennessee.  

Let’s jump into the news. 

 

$3.6B seized in connection to crypto hack

The Department of Justice (DOJ) announced on Tuesday that a married couple was arrested and charged for their alleged links to cryptocurrency stolen from a 2016 hack of Bitfinex, a virtual currency exchange.  

Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, were arrested in New York City and charged with conspiracy to commit money laundering and conspiracy to defraud the United States, DOJ officials said on Tuesday.  

The duo repeatedly misled financial institutions and virtual currency exchanges about their identities and about the origins of their Bitcoin, according to federal prosecutors, who said the money was cashed out and used to purchase gold, NFTs and other items, such as a $500 Walmart gift card. 

The stolen currency from the hack is currently valued at $4.5 billion, and law enforcement has seized over $3.6 billion in connection to the incident. 

“Today’s arrests, and the Department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement. 

“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes,” Monaco added. 

Read more here.  

 

Facebook faces ire over Instagram for kids  

Facebook is facing a new adversary in the battle against its proposal to create an Instagram for kids — religious leaders.  

A coalition of 75 faith leaders signed a letter to Mark ZuckerbergMark ZuckerbergHillicon Valley — IRS scrapping facial recognition software Peter Thiel stepping down from Meta board These people have been subpoenaed by the Jan. 6 panel MORE, CEO of Facebook and Instagram parent company Meta, on Tuesday asking him to ditch permanently plans to create an Instagram platform for kids under 13.  

In September, the company said it would put the plans on pause after internal documents leaked by a whistleblower escalated scrutiny on Instagram’s impact on teen and youth users, but it did not go so far as to totally drop the plans — as advocates and lawmakers have pushed for. 

The letter acknowledges the concerns raised in the past by experts and whistleblower Frances Haugen but appeals to Facebook in a different way by highlighting how the plan for the platform undermines values spiritual leaders broadly are trying to instill in children. The letter is part of an effort led by the advocacy groups Fairplay and Children’s Screen Time Action Network.  

Its signers write that “countless faith communities emphasize the importance of time spent without distraction,” pointing to the sabbath, silence, yoga, meditation or prayer. 

Read more here.  

BIDEN LAUDS EV CHARGING PLANT

President Biden on Tuesday said the creation of a facility to build chargers for electric vehicles in Tennessee is part of a comeback for American manufacturing and a sign of the post-pandemic jobs resurgence.  

“We’re seeing the beginnings of an American manufacturing comeback,” Biden said in remarks at the White House. “The world’s at an inflection point, things are going to change in a big way, and this is one of those transition moments.” 

Tritium, an Australian company, announced on Tuesday it is building a U.S. manufacturing plant that will begin production in fall 2022 and have the initial capacity to build over 10,000 fast-charging units per year. 

The plant will have room to expand to building 30,000 units per year and plans to employ more than 500 people over the next five years. 

“Today’s announcement is part of a drumbeat of jobs resurgence like more than anything we’ve seen before,” Biden said. 

Read more here.  

BITS AND PIECES

An op-ed to chew on: Where the US can beat China: semiconductors  

Lighter click: Nathan Chen’s moment 

Notable links from around the web: 

Why the balance of power in tech is shifting toward workers (MIT Tech Review / Jane Lytvynenko) 

How Did the Bored Ape Yacht Club Get So Popular? (Wired / Kate Knibbs) 

Why Have 14 Of 15 U.S. Cabinet Departments Bought Phone Unlocking Technology? Few Will Say. (The Intercept / Mara Hvistendahl and Sam Biddle) 

 

One last thing: Peloton cuts nearly 3K jobs

Peloton announced it will lay off 2,800 people from their jobs as CEO John Foley steps down, as part of a corporate restructuring aimed at reversing the fitness company’s tumbling stock price.  

Foley will be replaced as CEO by former Netflix and Spotify tech executive Barry McCarthy. 

In a statement on Tuesday, the company said the latest changes are a part of a corporate overhaul in part to “right-size” its operations.  

The at-home fitness brand also plans wind down development of the Peloton Output Park (POP), a $400 million factory being built in Ohio, as well as reducing the warehouse space it owns and operates.  

“Peloton is at an important juncture, and we are taking decisive steps. Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth,” said Foley, a co-founder of Peleton who will now serve as its executive chair. 

Read more here.  

 

That’s it for today, thanks for reading. Check out The Hill’s technology and cybersecurity pages for the latest news and coverage. We’ll see you Wednesday.

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