Revealing the fraudster backing India’s '105th unicorn'

This week’s On the Rise looks at questions around Sram & Mram, Hepmil’s revenue revival, the launch of Elon Musk’s xAI, and Ripple’s win over SEC. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In today's newsletter, we look at: - [Sram & Mram’s legal and financial woes]( - Hepmil Media Group’s revival on the back of TikTok content - Elon Musk launches an OpenAI challenger - Ripple wins battle against SEC Hello {NAME} Narratives are incredibly important: They can make or break perceptions of things, places, and people. The first time this really became evident to me was when I watched Catch Me If You Can, the Steven Spielberg-directed film starring Leonardo DiCaprio and Tom Hanks that was adapted from Frank Abagnale’s semi-autobiographical novel. In the film, a young Abagnale poses as a pilot, a doctor, and an attorney, among other occupations, while cashing bad checks. He ends up working for the FBI - the same agency that was trying to track him down for years. Although the film took some creative liberties, it was very close to the story Abagnale had originally detailed in his book. So imagine my surprise when I found out that the veracity of the factual details in the book was [called into question]( after multiple journalists conducted their due diligence. Anyway, this proved to me that if you have a good story, you can gain people's trust and be perceived as credible. In this week’s Big Story, my colleague Scott zeroes in on Sram & Mram, a UK-based business group that announced plans last year to invest billions of dollars in various sectors, according to reputable media outlets. However, a [December 2022 investigation]( conducted by Tech in Asia raised questions about Sram & Mram’s ability to fund these investments. More recently, Scott talked to the company’s chairman, Sailesh Lachu Hiranandani, who has seemingly backtracked on earlier reports on its financing activities. Sram & Mram, which claims to have US$800 million in “turnover,” was also found to be involved in at least two fraud lawsuits in the US. More on this in the article. Our second Big Story is Lokesh's profile of Hepmil Media Group, a Singapore-based social media firm. The once profitable firm is primarily engaged in creating social media content and operates a vast content creator network. Riding on the popularity of TikTok and Instagram Reels, Hempil saw its revenue double in 2022 and is targeting 40% growth this year. Speaking of popularity, Twitter’s favorite billionaire techie has just launched his OpenAI rival firm. In this week’s AI Odyssey, I look into Elon Musk’s xAI, which aims to create “artificial general intelligence.” And in Token Issue, Deepti talks about the legal battle between Ripple and the US Securities and Exchange Commission. By the way, the team behind On the Rise will be taking a short break next week. But fret not, we’ll be back in your inbox on August 1. -- Shadine  --------------------------------------------------------------- THE BIG STORIES 1️⃣ [The convicted fraudster backing 5ire, ‘India’s 105th unicorn’]( Sram & Mram and its founder face questions about its "billion-dollar" investments, US legal woes, and his past convictions in Hong Kong and New Zealand. 2️⃣ [SG social media firm taps into TikTok for revenue growth recovery]( Hepmil Media Group’s revenue was stagnating, and it was on the verge of selling the business. It found growth again with the help of TikTok creators.  --------------------------------------------------------------- AI ODYSSEY Promising AI projects we’re noticing Musk’s new venture takes on OpenAI in superintelligence race AI’s roots lie in science fiction, and many of its surrounding narratives have been largely negative. For instance, HAL in the Stanley Kubrick classic 2001: A Space Odyssey and Ava in Alex Garland’s Ex Machina are depicted as devious, dangerous, and even fatal to humans. AI’s ethics have been explored in fiction for decades, but the threat of [superintelligence]( - AI that can outwit humans - is closer than ever. Researchers suggest that humans [won’t be able to control these programs](. Fears like AI accessing nuclear codes or interfering and taking control of other expansive digital systems to serve its own interests are among the worst-case scenarios. In this vein, self-proclaimed AI safety advocate Elon Musk launched [xAI]( which aims to create [artificial general intelligence]( or AI that can solve problems like a human. The Tesla CEO explained in a Twitter Spaces conversation that he helped co-found OpenAI to act as a [“counterweight”]( to Google’s AI research. That came about after Musk [disagreed with Google co-founder Larry Page’s outlook]( on AI safety. But Musk left OpenAI in 2018, explaining years later that he didn’t agree with the firm’s [liberal bias]( and its [decision to transition]( from being a nonprofit to for-profit company. Most importantly, he said the company [wasn’t doing enough for AI safety](. Since then, OpenAI has [unveiled Superalignment]( its effort to build an [automated alignment research]( within four years. This AI system will assist humans in evaluating and developing AI that aligns with human intent and values. This solution, however, has been met with pushback. Meta’s chief AI scientist [Yann LeCun]( believes that the AI alignment problem cannot be solved, especially in such a short timeframe. “One doesn't just ‘solve’ the safety problem for turbojets, cars, rockets or human societies, either. Engineering-for-reliability is always a process of continuous and iterative refinement,” he [tweeted](. “[We] must address that ‘alignment’ is socially constructed. Aligned with whom? Organization-driven alignment may lead to the alignment of a small minority and not society more broadly,” Twitter user [Landsheapes added](. In contrast to OpenAI’s approach, Musk’s xAI aims to build a system that is “maximally curious, which will make it “pro-humanity,” as “humanity is more interesting than non-humanity,” Musk explained in a [Twitter Spaces conversation](. He argues that by doing what OpenAI does - programming morality and blocking offensive content - would actually [make it easier for the system to reverse itself]( creating the antithesis of a “moral” AI. This is particularly pressing for Musk, as [he believes]( that superintelligence is only five to six years away from being a reality. As such, he aims to develop a system dedicated to finding the truth, a variation of [eliciting latent knowledge]( (ELK). In ELK, the AI is trained to view the whole picture and then report the truth instead of creating responses simply based on what humans would want to hear. Reactions to Musk’s idea were mixed. “I believe that aiming to shape minds that have the core features of humans is heuristically good, [because] humans are the only proof of concept we have of how to build something relatively intelligent which would probably not kill everyone even if it could,” AI risks expert [Siméon Campos]( wrote [in a tweet](. He adds that humans have curiosity, an exploration mechanism that’s not directed by goals and basically gives intrinsic rewards for learning new stuff rather than producing outcomes. However, Twitter user Alexander Odenziel [retorted]( “Maximizing curiosity builds a drive in the AI - it's the single biggest step towards making AI a dangerous agent instead of just a (un)helpful tool ... Being curious about humans is no guarantee that it will love us.” -- Shadine  --------------------------------------------------------------- TOKEN ISSUE Judgment on XRP creates Ripple effect on crypto assets The crypto world has been abuzz with the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) over the classification of XRP, the firm’s native cryptocurrency. At the heart of the matter lies a fundamental question: Is XRP a security or a cryptocurrency? The SEC claims XRP is a security like stocks and bonds, and wants strict regulations in place. Ripple, on the other hand, argues that XRP is just like Bitcoin or Ethereum – a cryptocurrency with more flexible rules. This legal showdown started in December 2020, when the SEC sued Ripple Labs for allegedly offering unregistered securities by selling XRP to investors without following the rules. If the court sides with the SEC, it could shake up the entire crypto industry. But hold on, there's a twist! US district court judge Analisa Torres recently dropped a pre-trial summary judgment and it was a "split decision," meaning there's good and bad news for both parties. The good news for Ripple and the crypto community is the judge ruled that XRP itself isn't a security. Ripple can breathe a sigh of relief as this supports its argument that XRP is a digital token, not a security offering. The court applied the [Howey test]( a fancy way to determine if something is an investment contract. It found that XRP does not meet the criteria to be classified as a security. The judge also said Ripple's XRP sales on crypto exchanges aren't securities offerings. As such, trading XRP on exchanges is like buying and selling regular cryptocurrencies – no extra regulations needed. To top it off, the court emphasized the difference between XRP as a digital token and the investment contracts to which it might be tied. This distinction is vital for the crypto industry, making it clear that not all tokens should be treated like securities. But it's not all sunshine and rainbows for Ripple. The judge also ruled that Ripple violated securities laws when it sold a massive US$729 million worth of XRP to banks, hedge funds, and VCs. Now, Ripple and the SEC are getting ready to rumble in court to settle the rest of their beef. The SEC warned that Ripple executives who helped with the unregistered XRP sales will be under the microscope. The market's reaction was a mixed bag. XRP's [price shot up]( and other crypto assets that had SEC troubles also got a boost. Still, some uncertainty remains. While the judge's ruling clarified XRP's status, it didn't say anything about XRP being traded in the secondary market. Consequently, the legality of those transactions is a question mark. However, let's not forget that this ruling has broader implications. If XRP is deemed not a security, other cryptocurrencies like Sol might enjoy the same status. This short-term green light has prompted exchanges like [Gemini, Kraken, and Coinbase to relist XRP]( in a show of support for the token. Crypto Twitter, as always, had a lot to say about the ruling. [Preston Byrne]( believes it's not the final word, and Ripple's big institutional sales are still causing trouble. [Luke Martin]( pointed out that the impact of this Ripple news goes beyond XRP, given that the SEC seems to have a target list that includes Binance. Coinbase and other altcoins. [Caitlin Long]( predicts that this ruling might finally push Congress to take action, considering how the SEC is dealing with the chaos. And finally, [Palley]( offers a word of caution, “This summary judgment isn't a binding precedent for other courts, and it could be appealed.” -- Deepti  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [Habyt’s where the heart is]( Singapore’s Hmlet has rebranded to Habyt, which is also the name of the German company that it had merged with last year. 2️⃣ [A gameducational experience]( SoLeLands, an Indonesia-based educational games firm, has raised an undisclosed amount of funding from East Ventures and SMDV. 3️⃣ [Doctor on demand]( Singapore healthtech firm Speedoc has partnered with Parkway Shenton, which specializes in primary care services. Under the deal, Speedoc can offer Parkway Shenton customers a broader range of services, doctor, and nurse house calls. 4️⃣ [Growing the Antler footprint]( The startup investor and builder has expanded to Malaysia through a partnership with local sovereign wealth fund Khazanah. This marks Antler’s fourth market in Southeast Asia, following its entry into Singapore, Indonesia, and Vietnam. 5️⃣ [Sowing the seeds of funding for Indonesian agritech]( Eratani has raised an additional US$2 million in its seed round to further support Indonesia’s agri-supply chain.  --------------------------------------------------------------- FYI 1️⃣ [5ire faces refunds, in-fighting, and angry investors as mainnet launch looms]( The blockchain firm, which famously hit unicorn status in 2022, seems poised to miss a key goal as upset investors and internal squabbles raise questions. 2️⃣ [Edtech firm Refocus suspends Philippine operations amid numerous complaints]( It has reportedly terminated contracts with 102 employees in the country while facing accusations about illicit marketing tactics.  ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. 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