Photo: Wikimedia Commons

The news this week that troubled data “consultant” Cambridge Analytica has been working in the crypto space again raises important issues around blockchain ownership and the role that big data has to play in this.

After some excellent reporting from the New York Times that, through the examination of company documents and interviews with former staff, seems to reveal that Cambridge Analytica was privately preparing to launch its own crypto-currency while also working, just as privately, as a fundraising consultant for crypto start-ups.

Cambridge Analytica has dominated global headlines in recent weeks after being accused of improperly accessing millions of Facebook accounts and creating “psychographic profiles” – of voters or consumers or both – which the British company then passes on for profit.

Cambridge Analytica worked for Donald Trump’s 2016 election campaign and has been repeatedly linked to the UK’s leave-the-EU “Brexit” campaign, also in 2016. And now the NYT reports that in 2017 it started working on its own crypto coin offering.

Cambridge Analytica hoped the coin would raise $30 million to fund a data initiative that would exchange personal data for the company’s own crypto tokens. The data would then be sold, to advertisers and political campaigns presumably, and the premise behind that seems to be an acknowledgement that if someone is going to get all of our data anyway, we might as well just sell it ourselves.

Cambridge Analytica hasn’t specifically commented on this but Reuters reported that a company spokesman said the firm “was looking at using blockchain… to help people secure their online data.”

So, just to be clear, is that securing data that they made unsecure in the first place?

According to the NYT, Cambridge Analytica has also acted as a consultant that sold itself as a data match-matching service, between crypto start-ups about to launch ICO fundraisers and potential investors. Company marketing material said it was “helping blockchain companies in using predictive modeling to target investors for token sales.”

The NYT quotes blockchain consultant Jill Carlson who attended some Cambridge Analytica pitch meetings and who “remembers they spoke about an array of potential campaigns. The most unusual idea involved sending virtual currencies to people in far-flung regions of Mexico. The payments would give people incentive to fill out surveys and get data that could then be used to help design campaigns for Mexican political candidates.”

“The way that Cambridge Analytica was talking about it,” Carlson told the NYT, “they were viewing it as a means of being able to basically inflict government control and private corporate control over individuals, which just takes the whole initial premise of this technology and turns it on its head in this very dystopian way.”

Gangster seen at Dragon Coin launch in Macau

There are also now links between Cambridge Analytica’s blockchain consultancy and a crypto-based Macau casino junket start-up. Dragon Coin launched in 2017 and hoped to raise a whopping $500 million to, it claimed, finance a floating casino in Macau. It offered its buyers digital coins that could be exchanged for gambling chips in its casino. The project offered a unique opportunity, said the business owners, to allow anyone to become ‘a shareholder in a junket.

The VIP “junkets” – that control high-roller rooms in Macau casinos and with it a fat slice of the southern Chinese gambling enclaves $30 billion gaming industry – have never really managed to shake off their organized crime triad-gang roots.

So when at the glitzy launch of Dragon Coin, ‘Broken Tooth’ Wan Kuok-koi was spotted amongst the dignitaries on the stage, there was something of a problem.

In the mid-1990s a violent and deadly machine-gun wielding turf war raged, first in Macau’s casinos and then on its streets, from which Broken Tooth emerged the winner. Until he was jailed, that is, for a host of crimes that included loan-sharking, operating an illegal gambling operation, running a criminal gang and the attempted murder of a senior police officer.

Broken Tooth was jailed for 14 years and came out of prison in 2012 and little was heard of him till two months ago when he was reportedly touting for security work on Belt and Road projects. But he did appear on stage at the Dragon Coin launch. Dragon said Broken Tooth was “not financing Dragon in any way,” although this statement has since been disputed.

What is certain, to anyone that has followed this story in any detail, is that the violence in Macau pushed Beijing authorities to issue a stern warning to the junket operators just before the PRC took back Macau from Portugal in 1999. As such, many of the Macau junket operators moved to pastures new and this included the “murky world” of Asian-facing online gambling. That’s a vast global “grey market” industry that remains loosely regulated and its operational mechanics are basically unseen. It is also often linked with organized crime. Sounds a lot like crypto, doesn’t it?

As more businesses, and even governments, start putting more of our data onto supposedly permanent blockchain databases, we need to be very clear about privacy and security.

If our news carries many more sentences with the words “Cambridge Analytica”, ‘blockchain” and “Macau gangsters,” this cannot be viewed as progress.

Please contact us with feedback, news or stories. thechain@atimes.com

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