Tiktok boss confirms Chinese developers have access to US data

The US Congress questioned CEO Shou Zi Chew for five hours. Also: Block is accused of lax standards and chatbot startup Character.AI is already worth a billion dollars after 16 months.

Good morning! While you slept, work continued elsewhere in the digital scene.

The top topics:

The short film platform Tiktok could be banned in the US. CEO Shou Zi Chew should avert this danger at a hearing before the US Congress on Thursday. But some of his comments seem to have confirmed concerns in Washington. The Tiktok boss admitted that Chinese developers currently have access to US user data. The risk mitigation plan, known as “Project Texas,” didn’t seem to address lawmakers’ concerns either.

In addition to fears that US data on the parent company Bytedance could end up with the Chinese Communist Party, it also discussed the app’s potential to harm children through its addictive features and potentially dangerous posts. Chew was unable to placate his listeners during the more than five-hour hearing. “I have not been comforted by anything you have said so far, and I think, quite frankly, your testimony has raised more questions for me than it has answered,” said Rep. Lisa Blunt Rochester, at one point in the hearing. It’s not clear what the exact implications of Thursday’s hearing might be and how realistic the implementation of a Tiktok ban in the US would be. The focus of some MPs seemed to be on a comprehensive law on digital data protection, which then also US companies like Meta, Google, Twitter and Snap would affect. [Mehr bei Welt, Handelsblatt, CNBC und The Guardian]

On Founder Scene: There are 32 unicorns in Germany. Since yesterday, the newest member of this elite club is the daily money startup Raisin, which has now also been valued at at least $1 billion. But who are the sponsors who supported these German unicorns? So indirectly helped to turn “normal” startups into a billion-dollar company? Our colleagues Alex Hofmann and Maybrit Martschin analyzed it for you. [Mehr bei Gründerszene+]

And here are the other headlines of the night:

Block (formerly Square) had to accept sensitive losses on the stock exchange on Thursday. The shares of Paypal-Competitors plunged nearly 20 percent after the shortseller Hindenburg Research pointed out alleged irregularities on the payment platform. According to the short seller, the firm of Twitter-Co-founder Jack Dorsey glossed over the number of monthly active users of the Cash app. It is also said to take a lax approach when it comes to uncovering fraudulent activity on the platform. The report spoke of a “‘wild west’ approach to compliance”. [Mehr bei The Information und Wall Street Journal]

Investments: The chatbot startup Character.AI has in a new, from Andreessen Horowitz led round of financing raised 150 million US dollars. After only 16 months, the company is now valued at one billion dollars. That of former Google-Founded by employees, the Silicon Valley company is one of the few startups that OpenAIthe creator of ChatGPT, want to compete. [Mehr bei CNBC, New York Times und Wall Street Journal]

Redundancies: The crisis in the tech industry has also reached the consulting world. The world’s largest consulting firm Accenture wants to cut 19,000 jobs within the next 18 months. This corresponds to around 2.5 percent of the total workforce. The company specializes in IT and technology consulting and is therefore also feeling the effects of the weaker business in the industry. [Mehr bei Techcrunch, Handelsblatt und Bloomberg]

Cryptocurrencies: The CEO of Terraform Labs, Do Kwon, is charged by New York prosecutors with eight counts of fraud. The charges follow Kwon’s arrest in Montenegro on Thursday. The South Korean is said to have traveled from Costa Rica with forged travel documents. Kwon is the creator of the Terra Stablecoin, which should be tied to the value of a US dollar. However, the stablecoin crashed to almost zero last year after customers tried to redeem the token. The latter fueled the crisis in the crypto market and ultimately forced several crypto companies to file for bankruptcy. [Mehr bei Wall Street Journal, Techcrunch und The Information]

Cryptocurrencies: Also the founder of cryptocurrency Tron, Justin Sun, faces fraud charges. In addition to Sun, the US Securities and Exchange Commission has also accused eight celebrities, including actress Lindsay Lohan and rapper Soulja Boy. They are said to have promoted the crypto assets without disclosing that they were paid to do so. The SEC is currently very active in combating fraud and wrongdoing in the crypto industry. [Mehr bei The Information]

Our reading tip on Gründerszene: In the competitive business with solar systems, providers resort to questionable tricks. The startup Enpal now attracted attention with a fake comparison portal. [Mehr bei Gründerszene]

Don’t want to miss anything? Then subscribe to our Gründerszene newsletter! It appears every morning at 8:30 a.m. and brings you all the important news straight to your inbox.

Happy Friday!

Your Gründerszene editors