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Judge Blocks First State Law That Would Have Banned Prediction Markets

1 month ago
An anonymous reader quotes a report from Ars Technica: Minnesota, the first US state to prohibit prediction markets, was prevented from enforcing the law by a federal court ruling just days before the ban was scheduled to take effect. But while Minnesota was stopped from enforcing a total ban, the state may ultimately be allowed to prohibit some types of prediction-market wagers. The Trump administration and the two largest prediction markets -- Kalshi and Polymarket -- sued Minnesota after the state enacted the law in May. The cases were consolidated, and a ruling (PDF) issued yesterday imposed a preliminary injunction blocking the law that was scheduled to take effect on August 1. Minnesota lawmakers saw prediction markets as indistinguishable from gambling, but the US Commodity Futures Trading Commission (CFTC) argues it has exclusive authority to regulate the platforms under federal law. One of the primary legal questions is whether event contracts are "swaps," which are regulated by the CFTC. Swaps are defined broadly in US law to include contracts in which payment "is dependent on the occurrence, nonoccurrence, or the extent of the occurrence of an event or contingency associated with a potential financial, economic, or commercial consequence." US District Judge Katherine Menendez in the District of Minnesota, a Biden appointee, said Minnesota's total ban on prediction markets is likely to violate US law because many trades on Kalshi and Polymarket are swaps. Menendez wrote: "Specifically, it appears that whether the Minnesota statute is expressly preempted turns on whether the state law attempts to regulate trades in event contracts that qualify as "swaps" within the meaning of the CEA [Commodity Exchange Act]. And there are several examples of event contracts hosted by Kalshi and Polymarket US that fit that definition because they concern the occurrence of events with clear potential economic, financial, or commercial consequences that are neither remote or unattenuated. Kalshi and Polymarket US are designated contract markets, so the CFTC has exclusive jurisdiction to regulate transactions involving those 'swaps.'" Menendez said the CFTC, Kalshi, and Polymarket met their burden of showing they are likely to succeed on the merits, so she issued "a preliminary injunction barring enforcement of Minnesota's prediction market statute until a final decision on the merits is reached." But she said Minnesota may be able to prohibit some types of event contracts offered on Kalshi and Polymarket because not all of them appear to meet the definition of swaps. For example, Menendez doesn't think prediction-market bets on the outcome of Love Island USA meet the legal definition of swaps. Minnesota could continue litigating the case in district court or ask a federal appeals court to overturn the preliminary injunction.

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DEF CON Bans Meta-Style 'Pervert Glasses'

1 month ago
DEF CON has banned "Meta-style glasses with recording capabilities," with no exceptions being made even for those with prescription versions. "Be sure to pack non-violating eyewear if you need them," DEF CON said. The Register reports: [The conference's official photo policy] has not been updated since 2023, predating the recent growth of camera-equipped eyewear developed by Meta with EssilorLuxottica under its Ray-Ban and Oakley brands. It states that public photography is permitted but with several caveats that essentially prohibit capturing the image of anyone, except on-stage speakers, unless the photographer obtains consent from the subject(s). "Love to see a 'no pervert glasses' policy at DEF CON," said EFF director of cybersecurity Eva Galperin.

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GrapheneOS Defends Data-Wiping Function That Blocked US Border Search

1 month ago
GrapheneOS is defending its duress-password feature after an environmental activist used it to wipe his Pixel phone during a U.S. Customs search and was later indicted for allegedly destroying property under government control. The nonprofit says the operating system is "completely legal," cannot recover the erased data, and should not be weakened with encryption backdoors. Meanwhile, the activist faces up to five years in prison if found guilty. PCMag reports: In a post on Saturday, the Canadian nonprofit behind the operating system, the GrapheneOS Foundation, explained that the software offers a range of features to prevent data extraction. For example, one safeguard is the "auto-reboot timer" that'll reboot a locked device after a set period of time to put the data at rest, leaving all files inside encrypted. The group's post subtly suggests that GrapheneOS phones can withstand law enforcement searches without requiring users to resort to a duress password. "People should carefully consider how to use it in an actual duress situation where there can be physical or legal consequences for wiping the device," the nonprofit wrote. "GrapheneOS doesn't require it to protect data from being extracted from the device, but it takes recovering it completely off the table even with the PIN/password for each profile on the device." On X, the nonprofit has also said it can do nothing to help US law enforcement recover data from Tunick's phone. "Data cannot be recovered after the key derivation material is reliably wiped. It's not possible and there's nothing we can do to assist with it," the group wrote. "Similarly, it's not possible to assist with bypassing encryption because the hardware and software has been designed to prevent it."

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