A component of me stays just a bit skeptical in regards to the national-security perils of TikTok whilst the consensus builds that the wildly popular short-video app is an existential threat because its parent company is Chinese.
The fear in DC and beyond, after all, is China’s vast surveillance state that has the ultimate word on the operations of each Chinese company.
Within the case of TikTok, it’s sucking up swaths of information from all those tweens who signed as much as post TikToking dance videos.
Not exactly high-level spy craft, IMHO.
So with the identical degree of skepticism, I’m approaching the most recent China-inspired scare amongst some elements of our ruling class (this time, members of Congress, including Sen. Tommy Tuberville and Rep. Jim Banks).
It centers on concerns that increasingly popular discount brokerages owned and operated by Chinese parents are also possibly spying on us.
I’m talking about Webull and Moomoo.
Odd names, to make sure, but they have gotten increasingly thorny competitors to American discount brokers (Schwab, Robinhood, ETrade) for US retail traders.
They’re also emerging as an increasingly legitimate national-security concern should you hearken to Tuberville and Banks because, like TikTok, they too collect data from their customers which can be possibly fed into the Chinese spy apparatus.
And while you break it down, you possibly can see how the Webull/Moomoo threat appears more pernicious than TikTok’s, involving amorphous stuff like search history and “biometric identifiers” — identification characteristics gleaned from voice recognition and earlobe size.
As most individuals know, each time you trade a stock or buy any sort of investment, you would like some kind of broker to finish the transaction.
Brokers ask for numerous hard info, far more than TikTok can ascertain.
It includes Social Security numbers, age, mailing addresses, etc., pretty sensitive stuff, which within the improper hands may lead to identity theft and far more.
Chinese apps have been accused of sharing US data with the CCP.ZUMAPRESS.com
I do know I said I’m somewhat dubious about TikTok’s relevance to Chinese spies because I’m not totally convinced there may be spycraft value in ripping off the identity of some random kid.
That said, I put nothing past the Chinese surveillance state, whether it’s sending spy balloons over US military bases, using TikTok data or the rest at its disposal to realize an edge.
And should you know anything about China Inc., the Chinese Communist Party really is in command of every Chinese company.
My full appreciation of the CCP’s dominance occurred a couple of decade ago covering the IPO of Alibaba, a large e-commerce outfit within the mold of Amazon but headquartered in China.
Within the deal docs, there was a not-so-subtle risk factor about how the Chinese government “exercises significant control over China’s economic growth . . . providing preferential treatment to particular industries and firms.”
Later, its founder, Chinese entrepreneur Jack Ma, disappeared for months after mildly criticizing the CCP because, well, that’s what they do in a surveillance state.
In other words, giving Chinese spies access to Social Security numbers and reams of private information on Americans — if that’s what’s happening — with regard to Webull and Moomoo is a recipe for disaster, definitely more of a national security concern than anything gleaned from the TikTok app.
And this can add to agita: front-line regulation of all registered broker deals is divvied up between two feckless entities, the Financial Industry Regulatory Authority (FINRA) and, after all, the Securities and Exchange Commission run by Gary Gensler.
Losing sight of mission
They’re often known as Wall Street’s top cops.
Each cops, nevertheless, look like taking prolonged coffee breaks lately as financial pump-and-dump schemes run wild on social media.
Gensler particularly is concentrated on weird non-core stuff like find out how to force corporations to work out their carbon footprints.
Robinhood has seen increased competition from Chinese apps.REUTERS
Tuberville, Banks & Co. too are suspicious that neither are doing their jobs on this matter. In a recent letter to each agencies, they demanded information by May 31 about how the agencies are inspecting these brokerage operations and guaranteeing sensitive customer data isn’t being siphoned by Chinese spies.
It’s particularly worrisome, they are saying, at Webull, which has confirmed that its technology team is in Hunan, China, and quite a few its registered reps have addresses on the mainland — all out of the reach of US inspectors.
Again, I would like more evidence that Webull and Moomoo are really as much as no good.
I asked Moomoo for comment, and the firm assured me in a press release that “customer data is housed in encrypted form using cloud-based storage solutions provided by AWS [Amazon Web Services]. Specifically such data is stored in AWS US East Region.”
The corporate added: “Moomoo, like several other US company that’s subject to US law and regulations, will comply with lawful demands for records from government and regulatory authorities. Moomoo and its parent company Futu have never received a requirement for US user data from the Chinese government.”
Webull, alternatively, didn’t return repeated calls and emails searching for comment.
Ditto for FINRA and the SEC.
Each agencies also look like stiffing Tuberville and Banks, who’ve yet to get the data requested about how the agencies can assure US customers of those firms that their data is secure, as this column goes to press.
None of which is confidence-inspiring.
