China, Prince Andrew & blockchain games

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The Chinese government has continued to tighten its grip on the country’s internet sector.

Two big updates:

This week, The Information reported that a Chinese government entity quietly picked up a 1% stake in ByteDance.

Although the move doesn’t come as a surprise - social commerce platform Weibo sold a 1% stake to a subsidiary of China’s internet watchdog in 2020, and Beijing has been deliberating over small shares in private tech firms for at least 4 years - the move signals the gradual alignment of tech and state in China.

Why? As part of the deal, the government has the right to one seat on a three-person board of directors at ByteDance, giving Beijing a direct line of control over the company’s operations.

In response, Republican senator Marco Rubio urged President Joe Biden this week to block TikTok in the U.S.

China has passed a new data protection law, according to Reuters.

The law, which takes effect on November 1, is woven from the same fabric as data protection frameworks we’ve seen elsewhere. It:

The move, though beneficial to consumers on the surface, aligns pretty well with government interests:

Although China’s taking a gradual approach to its tame-the-internet-people masterplan, it’s been executing it swiftly and consistently ever since Jack Ma was pulled out of the public eye earlier this year.

On the one hand - not great. On the other hand, the splintering of the internet started 23 years ago with China’s Great Firewall, and incremental power moves like the two above shouldn’t come as a surprise.

(Ben Thompson from Stratechery wrote a great piece on the splintering of the internet last year. Highly recommend).

Legal experts have agreed Prince Andrew has a good chance of ducking out of court in the Epstein scandal that has engulfed his family.

Recap: Epstein victim Virginia Roberts Giuffre claims she was trafficked to London, New York, and the U.S. Virgin Islands at 17 and was “forced to have sexual intercourse with Prince Andrew against her will.”

Although he’s unlikely to be entitled to diplomatic immunity, the path to holding Prince Andrew to account is fraught with speed bumps - the main one being its impossible to force him to appear in an American Court to defend himself.

If he stays holed up in the UK (the advice probably being given to him right now), American courts will hand down a default judgement in his absence - which take an excruciating amount of time.

According to Mark Stephens, lawyer at the firm Howard Kennedy, it could take as long as 20 (!) years to reach a default judgement.

Stephens added:

The lack of a quick, clear path to accountability is frustrating. But there may be a sliver of justice in that, in court - win or lose, default judgement or no default judgement - all the details his alleged behaviour will come out.

Pakistani startup Airlift raised $85 million in its Series B round on Wednesday.

Airlift operates a quick commerce service across Pakistan - users can order groceries, produce, medicines, and other items from Airlift website and have it delivered to them in 30 minutes.

The round, which is by far the biggest for a Pakistani startup, was led by prolific tech investors:

Other investors in the round include:

Investment in the country is picking up largely because of three things:

Growing mobile connectivity. More than 80% of the population are now mobile users. Of these, almost 100m have access to 3G or 4G.

Deregulation. Pakistani law hasn’t traditionally permitted local companies to be owned by foreign holding companies. International HoldCo’s act as a safety net for investors who don’t feel comfortable investing in markets with weaker legal frameworks.

The Zoom era has sped up the due diligence process for investors, who don’t need to travel to Pakistan before cutting a cheque.