The Eye in the Sky Delivers (and Influences) What You Buy (preprint)

Imagine that you are at home, when suddenly a drone peers into your window, takes a picture of your wardrobe, familiarizes itself with your fashion preferences, or takes a picture of your kitchen table during dinner. The drone immediately transfers the picture to the commercial platform that operates it, such as Amazon or Uber. The platform in turn targets you with personalized advertisements for merchandise or food, in real time, customized to your lifestyle, at the time when you are most susceptible, manipulating you to make a purchase. How should the law react to this? And what if a drone were to collect information on private individuals in public using sophisticated cameras, sensors and facial recognition software? What if the platform that operates drones were to collect and use information on consumers and third parties? Should the law limit such invasions of privacy? The use of drones is growing rapidly and their technological capabilities are growing exponentially. Drones differ from existing surveillance technology. Their low cost and their ability to fly, equipped with high-resolution cameras, recording systems and sensors, enable them to take in information over longer periods of time and much more effectively than the human eye or ear. Such capabilities are liable to give rise to pervasive surveillance of a kind never known before. Making matters worse, invasion of privacy has serious consequences. By using a network of drone fleets at the service of a single commercial platform, such surveillance could allow the platform to effectively aggregate and analyze tremendous amounts of high-quality information on the parties under surveillance, gain valuable insight on consumers and influence their decisions to order merchandise or food. While much of the scholarship on drone surveillance and invasion of privacy focuses on governmental use and the Fourth Amendment, this Article focuses on the use of drones by private entities engaged in commercial deliveries. Drone deliveries are relatively new; only a few companies have recently overcome the regulatory obstacles to receive Federal Aviation Administration approval for U.S. deliveries. COVID-19 has pushed companies to utilize drones for deliveries and has increased demand for it. Since drones are unmanned, they can deliver food and other products without close contact with the recipient. Such delivery can be safer, faster, cheaper and more efficient than traditional emissaries; yet alongside the benefits, the use of delivery drones can lead to invasion of privacy and can result in abuse of personal data for manipulation, raising significant challenges.This Article addresses the challenges drones pose to privacy and proposes solutions. It aims to contribute to the literature in several ways. First, it outlines a roadmap of the different types of invasion of privacy and harm that can be caused by drones. It demonstrates that the physical boundaries of invasion no longer matter in light of advanced technology. In identifying types of invasion and harm, this Article takes the first step towards creating a legal policy for delivery drones. Second, this Article addresses existing law, arguing that currently there is a gap between the capacity of drones to observe and aggregate personal information and privacy protections under U.S. law. Third, it proposes solutions under privacy law, and even a duty of loyalty for platforms that operate drones. Finally, this Article accounts for possible First Amendment objections to the proposed solutions.

Speak Out: Verifying and Unmasking Cryptocurrency User Identity (preprint)

Terror attacks pose a serious threat to public safety and national security. New technologies assist these attacks, magnify them and render them deadlier. The more funding terrorist organizations manage to raise, the greater their capacity to recruit members, organize and commit terror attacks. Since the September 11, 2001 terror attacks, law enforcement agencies have increased their efforts to develop more anti-terrorism and anti-money laundering regulations, which are designed to block the flow of financing of terrorism and cut off its oxygen. However, at present most regulatory measures focus on traditional currencies. The more efforts to restrict the financing of terrorism by traditional fiat currencies succeeds, the greater the likelihood that cryptocurrencies will be used in order to fund illicit behavior. Furthermore, the COVID-19 virus and social distancing guidelines that followed it have increased the use of cryptocurrencies for money laundering, material support to terror and other financial crimes. Cryptocurrencies, electronically generated and stored tokens which can be exchanged via a decentralized payment system, are a game changer, significantly affecting market functions like never before and making it easier to finance terrorism and other types of criminal activity. These decentralized and (usually) anonymous usable currencies facilitate a high volume of transactions, allowing terrorists extensive fundraising, management, transfer and spending of money for illegal activities. The ability of terror organizations and those who finance them to increase their activities and attacks by using cryptocurrencies poses a major threat to national security. As cryptocurrencies gain popularity, the issue of how to regulate them becomes more urgent. The scope and utility of financing of terrorism begs for a coherent legal response. This Article proposes to reform the regulation of cryptocurrencies. It advocates the promotion of mandatory obligations directed at cryptocurrency issuers, wallet providers and exchanges to verify the identity of users on the blockchain. Thus, courts could grant warrants obligating companies issuing cryptocurrencies to unmask the identity of cryptocurrency users when there is probable cause that their activities support terrorism or other money laundering activities. Such reforms would make it possible to allow stifling the financing of terrorism and other types of criminal activity financed through cryptocurrencies, and in so doing would make it possible to curb harmful lethal activities and promote national security. As we are aware of the legal challenges our solution poses, this Article also addresses substantial objections that might be raised regarding the proposed reforms, such as jeopardizing innovation, First Amendment freedom of expression objections, Fourth Amendment protection from surveillance and measures for promoting efficiency in the application of the proposed reforms.

Let it Flow: Information Exchange in Video Conferences versus Face-to-Face Meetings (preprint)

The COVID-19 pandemic has dramatically changed how people interact with one another. Due to social distancing policies, interactions that traditionally occur in-person have largely transitioned into virtual alternatives. This shift raises an intriguing question: are virtual communications a viable alternative for face-to-face meetings?We investigate this experimentally by contrasting face-to-face meetings (FtF) and video conferences (VC) in the context of an information-flow task. In the experiment, the subjects need to solve a riddle based on a set of clues, which help narrow down the set of options but are not enough to solve the riddle correctly. However, each subject can invest money to increase the probability of communicating with another subject before attempting to solve the riddle. Successful communications enable subjects to easily solve the riddle, as each communicating pair holds complementary clues. Thus, if the information is exchanged effectively, subjects’ performance should be high. Varying the medium (FtF or VC) available for communication, we find that while the performance in the task itself does not depend on the medium, subjects do display significant differences in their willingness to invest, ex-ante beliefs, and ex-post reporting on the exchange of information during communication. Particularly, age plays an important role: Younger subjects are more optimistic about the prospect of virtual meetings, but less likely to invest their endowment. We relate our findings to several real-world settings and discuss implications for legal policy.

How Crisis Affects Crypto: Coronavirus as a Test Case (preprint)

Everyone is talking about the Coronavirus (a.k.a. “COVID-19”). What began as a local health situation in China has swiftly become a global epidemic, causing havoc and mayhem all around the world. The damages caused by the virus are overwhelming and will, in all likelihood, have long-term implications for the global economy. Naturally, the traditional financial markets are responding negatively to the news about the virus and share prices are nosediving. However, there are other implications of this crisis, which are perhaps less obvious but equally important. One such implication relates to the cryptocurrency market. In fact, this crisis provides us with the first opportunity to investigate an intriguing question: How does a global crisis, such as the one caused by the Coronavirus, affect cryptocurrencies? On the one hand, cryptocurrencies are supported by a decentralized mechanism, which is independent of governmental functions and available anywhere in the world. Thus, people may respond to the threat of global instability by switching from traditional currencies to cryptocurrencies. On the other hand, cryptocurrencies may be both tightly related to economic activity and, due to lack of sufficient regulation, subject to manipulations by sophisticated investors, so that they cannot escape the fate of traditional markets. Analyzing data on the top 100 cryptocurrencies in the market, we find that the inflow of identified Coronavirus cases is, on average, positively associated with the market cap and trade volume of cryptocurrencies. However, we also find that an opposite trend emerged once Coronavirus cases began to accumulate, eventually leading to a decline in the cryptomarket. Given our findings, we discuss insights on how one can improve the regulation of cryptocurrencies to account also for times of crisis.