Wednesday, April 1, 2020

Security concerns force U.S. agency to push for sale of Grindr, the gay-sex geosocial application that has been owned by a business with ties to Chinese government


Ali (Akbar) Alexander on Grinder

The coronavirus, understandably, has dominated news about U.S.-China relations for several months. But another story, one of true international intrigue, likely has flown under the public radar. The "other story" is spicy because it involves gay sex -- the kind that can put high-level government and corporate officials in compromised positions, as possible targets of blackmail, especially if they are married and closeted.

At the heart of the matter is GRINDR, a  geosocial networkiing app geared toward "gay, bisexual, and bi-curious men."  We have written about GRINDR before because right-wing provocateur Ali (Akbar) Alexander is notorious for having both a criminal history and a GRINDR account.

What takes the new GRINDR story to an international level? The company has been owned for several years by a company in -- wait for it -- China. A recent report at Reuters and Yahoo! News indicates the U.S. government is concerned about possible damaging information the Chinese government has gleaned from GRINDER -- and is encouraging the owner to sell it. From the Reuters/Yahoo! report:

Chinese gaming company Beijing Kunlun Tech Co Ltd  said . . . that it has agreed to sell GRINDR LLC, a popular gay dating app it acquired in 2016, for about $608.5 million.

The deal comes after a U.S. government panel asked Kunlun to divest itself of Grindr. The panel, the Committee on Foreign Investment in the United States (CFIUS), has not disclosed its concerns about Kunlun's ownership of GRINDR.

However, the United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.

Kunlun said it agreed to sell its 98.59% stake in GRINDR to San Vicente Acquisition LLC.

That GRINDR would sell for more than $600 million says something about the app's global reach. It also raises this question: What's up with the proposed buyer?
San Vincente Acquisition comprises a group of entrepreneurs and investors in the technology, media and telecommunications industries, a source close to the deal told Reuters.

One of the investors in the group that is nearing a deal to acquire GRINDR is Chinese-born U.S. citizen James Lu, a former executive at Chinese search engine giant Baidu , three of the sources said. The identity of the other investors in the consortium could not immediately be learned.

CFIUS needs to approve the latest deal, according to one of the sources.
A U.S. government agency needs to approve the deal? Gee, does this involve some highly sensitive information? Have careless -- and horny -- U.S. officials unwittingly shared their darkest personal information with the Chinese government? Here are more details about parties in the proposed deal:
Based in West Hollywood, California, GRINDR has over 4.5 million daily active users, and describes itself as the world's largest social networking app for gay, bisexual, transgender and queer people.

Kunlun is one of China's largest mobile gaming companies. It acquired a majority stake in GRINDR in 2016 for $93 million and bought out the remainder of the company in 2018. It did so without submitting the transactions for CFIUS review.

CFIUS' subsequent intervention in the GRINDR deal underscored its focus on the safety of personal data, after it blocked the acquisitions of U.S. money transfer company MoneyGram International Inc and mobile marketing firm AppLovin by Chinese bidders.
Chinese ownership of GRINDR has raised Constitutional issues in the United States:
Kunlun's control of GRINDR has fueled concerns among privacy advocates in the United States. Democratic U.S. Senators Edward Markey and Richard Blumenthal sent a letter to GRINDR in 2018 demanding answers about how the app would protect users’ privacy under its Chinese owner.

Reuters reported last year that Kunlun had given some Beijing-based engineers access to the personal information of millions of Americans, including private messages and HIV status.
How many prominent Alabamians have been on GRINDR, with their most personal information now in the hands of the Chinese government? It's hard to say, but the number likely is substantial. Sources have told Legal Schnauzer that a well-known conservative lawyer in Birmingham -- a figure in the Don Siegelman case, with ties to the Bob Riley administration -- has been on GRINDR.

A lawyer source tipped us to this story, given our reporting on U.S. Circuit Judge Bill Pryor and his ties to 1990s gay pornography via the Web site badpuppy.com. Wrote the source in an email:

Thought you might be interested in the fascinating notion that a Chinese company bought, owned, and operated GRINDR for several years, before contemplating a sale of the company now. What a great way to get dirt on all kinds of powerful Americans. To be sure, the Chinese government has all the dirt that can be gleaned from GRINDR and so it only makes since to sell an asset that they don't need anymore.

Of course, it makes me wonder the extent to which the Chinese government has leverage on U.S. appellate judge Bill Pryor AND other powerful U.S. officials.

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