A part of me stays just somewhat skeptical about TikTok’s national security threats, even when the consensus is that the wildly popular short video app is an existential threat because its parent company is Chinese.
Of concern in Washington and beyond, after all, is China’s vast surveillance state, which has the last word on the operations of each Chinese company.
Within the case of TikTok, it sucks huge amounts of knowledge from all teens who’ve signed as much as post TikToking dance videos.
Not a tall spy ship, IMHO.
So, with the identical degree of skepticism, I approach the recent China-inspired panic amongst some elements of our ruling class (this time members of Congress, including Senator Tommy Tuberville and Congressman Jim Banks).
It focuses on concerns that increasingly popular brokerage houses owned and operated by Chinese parents are also spying on us.
I’m talking about Webull and Moomoo.
Strange names, true, but they have gotten increasingly thorny competitors for US discount brokers (Schwab, Robinhood, ETrade) for US retail traders.
Also they are emerging as an increasingly legitimate national security concern in case you take heed to Tuberville and Banks because, like TikTok, they too collect data from their customers that is probably going fed into a Chinese spy apparatus.
And while you break it down, you’ll be able to see how the Webull/Moomoo threat appears to be more damaging than TikTok, covering amorphous things like search history and “biometric identifiers” – identification characteristics gathered from voice recognition and earlobe size.
As most individuals know, every time you trade stocks or buy any investment, you would like some type of broker to finish the transaction.
Brokers ask for a variety of hard information, rather a lot greater than TikTok can determine.
It includes social security numbers, age, postal addresses, etc., quite sensitive items that could lead on to identity theft within the fallacious hands, and far more.
I do know I said I actually have some doubts about the relevance of TikTok to Chinese snoopers because I’m not entirely convinced that phishing a random kid’s identity has espionage value.
That said, I’m not leaving anything out of China’s surveillance state, whether it’s sending spy balloons over US military bases, using TikTok data, or whatever else it has at its disposal to achieve a bonus.
And in case you know anything about China Inc., the Chinese Communist Party really controls every Chinese company.
My full appreciation of the CCP’s dominance got here about ten years ago once I covered the initial public offering of Alibaba, a large e-commerce company like Amazon but based in China.
The deal documents revealed a not-so-subtle risk factor about how the Chinese government “exercises significant control over China’s economic growth. . . providing preferential treatment to certain industries and firms.
Later, its founder, Chinese entrepreneur Jack Ma, disappeared for months after mildly criticizing the CCP because, well, that is what they do under surveillance.
In other words, sharing social security numbers and tons of private information on Americans with Chinese spies – if that is what’s happening – with respect to Webull and Moomoo is a recipe for disaster, definitely a greater threat to national security than anything gleaned from the TikTok app.
And this can add to the agitation: front-line regulation of all registered brokerage deals is split between two inept entities, the Financial Industry Regulatory Authority (FINRA) and, after all, the Securities and Exchange Commission headed by Gary Gensler.
Losing sight of the mission
They’re referred to as the most effective cops on Wall Street.
Nonetheless, each cops appear to be taking prolonged coffee breaks in recent times as financial pump-and-dump schemes run rampant on social media.
Specifically, Gensler focuses on weird non-core stuff like getting firms to work out their carbon footprint.
Tuberville, Banks & Co. also they are suspicious that none of them are doing their job on the case. In a recent letter to each agencies, they requested information by May 31 about how the agencies are controlling these brokerage operations and ensuring certain sensitive customer data isn’t being siphoned off by Chinese spies.
They are saying that is of particular concern to Webull, which has confirmed that its tech team is positioned in Hunan, China, with lots of its registered representatives having mainland addresses – all beyond the reach of US inspectors.
Again, I need more proof that Webull and Moomoo are really as much as no good.
I asked Moomoo for comment and the corporate assured me in an announcement that “customer data is stored encrypted using cloud storage solutions provided by AWS [Amazon Web Services]. Specifically, such data is stored within the AWS US East Region.”
The corporate added: “Moomoo, like every other US company subject to US laws and regulations, will comply with lawful requests for documentation from the federal government and regulators. Moomoo and its parent company Futu have never received a request for US user data from the Chinese government.”
Webull, alternatively, didn’t reply to repeated calls and emails in search of comment.
The identical applies to FINRA and the SEC.
Each agencies also look like stiffening Tuberville and Banks, who’ve yet to receive the requested information on how the agencies can reassure US customers of those firms that their data is secure as this column goes to press.
None of them are trustworthy.