Oct 23, 2020 at 17:42 UTCUpdated Oct 23, 2020 at 18:08 UTC.When I first suggested Systemically Important Social Media Institutions were the social media parallel to Systemically Important Financial Institutions, I did not expect the theory to be picked up by financial regulators.
In the "Twitter Investigation Report," the department recommended creating a "Systemically important" designation for large social media companies, like the designation for critically important bank and non-bank financial institutions.
If you're wondering why the New York's financial services regulator was directed to conduct an investigation into the hack of a California-based social media platform, recall that NYDFS licenses Coinbase, Gemini and Square - all companies affected by the Twitter hack that resulted in losses of approximately $22,000 worth of bitcoin by their customers.
Considering the complex web that binds social media companies with financial companies, the economy, markets and politics, it ultimately wasn't all that surprising to see a state regulator thrown into the mix.
As the Twitter report highlights, more Americans are getting their news from social media.
Creating a "Systemically important" designation for these companies; i.e., labeling social media companies that cross a certain threshold so as to subject them to further regulatory oversight.
Just look at the Principles for Financial Market Infrastructures - a series of global standards that apply to systemically important financial market infrastructures that took over a decade to implement.
The Twitter hack and NYDFS Twitter report highlighted an obvious need for a tailored approach to cybersecurity and social media.
Governments around the world have proven they can respond aggressively to social media: Thailand signed an order last week allowing authorities to ban media deemed threatening to national security in response to pro-democracy protests, and Iran implemented a five-day nation-wide shutdown of the internet last year.
The Twitter hack and NYDFS Twitter report highlighted an obvious need for a tailored approach to cybersecurity and SISMIs, but also unearthed a larger issue - SISMIs are not only too big to fail, they may also be too big to effectively regulate on both a domestic level and international level.
What It Means if Companies Like Twitter Are 'Systemically Important' to Financial Regulators
pubblicato su Oct 23, 2020
by Coindesk | pubblicato su Coinage
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