Didi Chuxing: The last of its kind

Also in today's edition: Startups gold rush, Microsoft loses JEDI, WeChat cancels LGBTQ+

Good morning! Just when I thought I was out, they pulled me back in. Donald Trump is back in the news — he plans to sue Mark Zuckerberg, Sundar Pichai, and Jack Dorsey for ousting him from their platforms, according to Axios.

On to the day’s stories:

  1. We have a new minister for IT. We wonder what Twitter thinks of him.

  2. Holding you to ransom.

  3. Crypto takes a break.

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Indian Crypto Market Cools 

The Indian crypto bull run appears to be slowing down. WazirX, India's largest exchange by volume, reported a 60% drop in trades.

Others such as CoinDCX and Coinswitch Kuber are also experiencing lower volumes, indicating that regular traders may have exited, while long-term investors are holding on to their positions, hoping for an uptick.

Helping hand: At its peak, India's crypto market had seen a retail investor frenzy after the Supreme Court overturned the Reserve Bank of India’s ban on banks dealing with crypto firms last year. It rekindled flagging enthusiasm for crypto trading and volumes on WazirX alone had crossed $6 billion in May.

Lull’s good: This isn't all bad news though - many exchanges are using the downtime to build capacity and improve the stability of their systems. Many couldn’t handle volume spikes, leading to frequent maintenance shutdowns.


Ransomware Is Everywhere 

Even though the ransomware attack on Kaseya may have caused “minimal damage” to US businesses, US President Joe Biden isn’t taking it lightly — elevating ransomware threats to “national security and economic security priority.” Last weekend’s REvil attack impacted up to 1,500 businesses, according to Kaseya, the vendor whose software was hacked.

Russia and Republicans: Cozy Bear, a hacking group tied to the Russian government, allegedly breached the computer systems of the Republican National Committee during the Kaseya attack. The group is suspected to have hit the Democratic National Committee back in 2016 and done the SolarWinds hack in 2020. 

Not the same old: This time it feels a bit different. Experts consider REvil’s attack  more sophisticated, with “a zero-day exploit” and a level of planning closer to a state-sponsored hack — accessing a “company with a small but a key role in the internet ecosystem.”

Timing: The attack comes within weeks of the US-Russia summit, where Biden had taken up with Russian President Vladimir Putin cyber attacks originating from that country.


Change Of Guard 

Three high-profile ministers were among those who resigned on Wednesday to make way for new faces as Prime Minister Narendra Modi effected a major cabinet reshuffle. Each of the ministers, Ravi Shankar Prasad (IT), Harsh Vardhan (health) and Prakash Javdekar (environment), has been in the news for different reasons.

No blue tick: Prasad leaves the ministry when India is in the thick of framing laws to regulate big technology companies and platforms in entertainment, social media, fintech and commerce. He had taken up cudgels against Facebook-owned WhatsApp and Twitter, asking the former to open up encryption for the government and baiting the latter for several of its policies. Prasad was instrumental in trying to shape a global alliance against Big Tech and was a fervent supporter of homegrown social media platforms like Koo (also among its most-followed users). He leaves behind the unfinished business of creating a data protection framework. Relatively unknown Ashwini Vaishnaw replaces him.

Second wave: Harsh Vardhan leaves as health minister after the government’s handling of the second Covid-19 wave came under fire from citizens and experts, domestic and global, alike. The government’s vaccination programme is also being seen as a bungle by many. Although the responsibility was collective, scores of people died for want of medical oxygen and treatment on Vardhan’s watch. Mansukh Mandavia will take over from him. 

No green light: Prakash Javdekar was a favourite target of environmental activists for being soft on big industry. They allege that on many instances his ministry allowed industry to get away with violations. Bhupender Yadav will occupy his chair.

The Signal

The exit of the three ministers apart, the cabinet reshuffle clearly indicates political calculations. Anupriya Patel, for instance, holds sway in several constituencies of eastern Uttar Pradesh, which is headed to the polls next year. Sadananda Gowda’s exit and Rajeev Chandrashekhar and Shobha Karandlaje’s entry point to a give and take within the Karnataka BJP. Sarbananda Sonowal has been accommodated at the Centre for ceding the Assam chief ministership to Himanta Biswa Sarma.


Olympics Under Emergency 

In what clearly represents the year that is 2021, the Tokyo Olympics will be held under a state of emergency, which the Japanese government declared until August 22. That's a first. The number of spectators at these events is also likely to be reviewed owing to the fourth wave of the Coronavirus infections, Kyodo News reported.

Foreign spectators are already excluded and the 50% venue capacity limit for domestic fans faces the possibility of dropping to zero.


Chinese Firms’ US Gold Rush May Stop 

While attention is focused on ride-hailing company Didi Chuxing’s share crash, China is working to plug the loophole exploited by Didi and Alibaba (2014) to list overseas. That may dash the plans of 34 China- or Hong Kong-registered companies due to list in the US this year, Bloomberg reports.

The loophole: "Variable interest entities” or VIEs first came to light in the early 2000s as a vehicle for companies operating in restricted sectors to get foreign investment and list abroad. Once a local company in a restricted sector wants to raise money, it signs an agreement with a foreign shell company, which effectively provides investment in exchange for revenue.

$831 billion: That's how much Chinese tech giants have lost in market capitalisation since February 2021, as per Bloomberg. And well, the Didi founders lost $1.5 billion in wealth as their company’s shares nosedived after Beijing's crackdown.


What Else Made The Signal? 

Money incoming: Startups in India raised $12.1 billion until June 2021, zooming past last year’s total funding by $1 billion already, according to data from Venture Intelligence.

WeChat L̶G̶B̶T̶Q̶: China’s social media giant WeChat deleted the accounts of dozens of LGBTQ university students without any warning. The government reasoned that they had broken rules on the internet. Not a good time for the gay community. 

Cutting costs: The Japanese government is redirecting costs at the ministerial level towards environment and digital spending. For every yen saved, ministries will get 3 yen to spend on green initiatives. 

Did a whoopsie: Founder of crypto exchange Binance Holdings, Changpeng Zhao, said that its rapid growth is partly to blame for its troubles. This confession comes after the company stopped deposits from a European payment network.

Let’s stop: The Pentagon has pulled the plug on a $10 billion technology contract with Microsoft after a contentious legal battle about alleged interference from the Trump administration. It will now farm it out to multiple companies.

Surveillance alert: The EU has given the green signal to a law that will allow digital companies to comb through client information to trace and report child sexual abuse on their platforms for the next three years. This opens up a can of worms for the privacy debate. 

Go, go, go: Right around the corner to its fifth anniversary, Pokémon Go made $1.3 billion in global revenue in 2020, surpassed $5 billion in lifetime revenue and hit total downloads of 632 million.

Fun Signals

Street sunscreen: Worried about the heat making the road cave under you? Don’t worry. Ohio-based Pavement Technology has developed a cure: a spray-on pavement “sunscreen.” The mixture uses compounds found in sunscreens, white paints and pharmaceuticals that will naturally lower the temperature of the road and keep it cool. 

Secret café opens up: A secret Nintendo-themed café in Japan has opened its doors to the public. Before the pandemic, it was a members-only diner in Tokyo that kept its location a mystery. You can now make a reservation and go dine in a place filled with video game memorabilia. 

Free sandwiches: Who says there’s no such thing as a free meal? Fast-food franchise Subway will give out 1 million free subs on July 13 across 10,000 stores in the US as it prepares for a major menu rehaul.

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