Day: April 29, 2023

EU Drafts AI Bill to Address Copyright Concerns

by Blockchain News

Concerns over the usage of copyrighted material have risen to the forefront as the use of artificial intelligence (AI) in the production of content becomes more commonplace. In response to these concerns, legislators in the European Union have approved a draft law with the intention of regulating both the firms that produce the technology and the technology itself.

The law, which is a component of the Artificial Intelligence Act of the EU, intends to categorize AI technologies according to the amount of danger they pose. The risk categories range from acceptable to unacceptable, with unacceptable being the highest. The use of high-risk instruments won’t be completely outlawed, but rather they’ll be subject to more stringent disclosure rules. It will soon be necessary for generative AI tools such as ChatGPT and Midjourney, among others, to report any usage of copyrighted resources made in the course of their AI training.

During the subsequent phase of debates among the legislatures and member states, the particulars of the law will be refined to their final form. According to Svenja Hahn, a member of the European Parliament, the bill in its current form strikes a balance between excessive levels of monitoring and excessive levels of regulation. This balance protects people while also encouraging innovation and contributing to economic growth.

The data watchdog for the European Union has voiced worry about the possible difficulties that artificial intelligence (AI) businesses in the United States may have if they do not comply with the General Data Protection Regulations.

Additionally, the European think tank known as Eurofi, which is comprised of organizations from both the public and private sectors, has published a magazine that features an entire section devoted to the applications of AI and machine learning in the financial sector of the EU. All of the mini-essays featured in this section touched on the forthcoming Artificial Intelligence Act in some way. They were on the topic of artificial intelligence (AI) innovation and regulation inside the EU, namely for usage in the financial sector.

One of the authors, Georgina Bulkeley, who is also the director for EMEA financial services solutions at Google Cloud, stressed the significance of AI regulation by stating that the technology is “too vital not to regulate. In addition to this, it is of insufficient significance to not properly regulate.”

In general, the proposed legislation represents a substantial advance toward the goal of regulating the use of AI and works protected by copyright in the EU. As the technology continues to improve and become more widespread in a variety of sectors, it is essential to ensure that it is used in a transparent and ethical manner in order to safeguard both customers and companies.

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Google Cloud and Polygon Labs partner for Ethereum scaling

by Blockchain News

At the Consensus 2023 conference, Polygon Labs and Google Cloud made the announcement of a multi-year partnership with the intention of developing and improving the tools and infrastructure associated with the Ethereum scaling protocol. As part of the cooperation, Google Cloud will make a framework and developer tools available to Polygon in order to facilitate the creation of Web3 products and decentralized apps (DApps) on Polygon.

The deployment of Google Cloud’s architecture and development tools is expected to be beneficial to Polygon’s key protocols, such as Polygon proof-of-stake (PoS), Polygon zkEVM, and Polygon Supernets. Through this partnership, we hope to simplify the process of integrating developers, which will in turn make it simpler to construct, launch, and grow DApps on Polygon.

Additionally, it is anticipated that the partnership with Google Cloud will accelerate the development of Polygon’s zero-knowledge system. In comparison to the currently available infrastructure, it has been revealed that the testing of Polygon zkEVM’s zero-knowledge proofs on Google Cloud has resulted in transactions that are both quicker and less expensive.

An Ethereum Virtual Machine (EVM) scaling solution known as Polygon zkEVM beta was released to the mainnet in March of 2023. This technology is intended to enable decreased transaction costs and higher throughput in the implementation of smart contracts. The Polygon ecosystem intends to do away with the need that Polygon developers install and operate Polygon PoS nodes with the support of the Blockchain Node Engine that is offered by Google Cloud. This will assist with operations that are labor-intensive and need a lot of time, as well as the expensive overheads of purchasing, maintaining, and running specialized blockchain nodes.

In conclusion, the cooperation between Google Cloud and Polygon Labs aims to advance the tools and infrastructure of the Ethereum scaling protocol, as well as to ease developer integration in order to construct, launch, and expand Web3 products and DApps on Polygon. The integration of Google Cloud’s framework and development tools is predicted to be beneficial to Polygon’s fundamental protocols. Additionally, the testing of Polygon zkEVM’s zero-knowledge proofs on Google Cloud is anticipated to result in transactions that are both quicker and less expensive.

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US Crypto Tax Law Study

by Blockchain News

Researchers from Indiana University and the University of Maine recently collaborated on a study that investigated the present condition of tax legislation in the United States regarding cryptocurrencies. The findings of the research are summarized in a series of recommendations that are directed for the Internal Revenue Service (IRS). If these suggestions were carried out, it would be impossible for taxpayers to deduct losses from bitcoin investments against profits from other types of investments.

The purpose of this study paper, which is named “Crypto Losses,” is to shed light on the myriad of different types of losses that may be incurred by firms and people who have invested in cryptocurrencies. In addition to this, it suggests a new tax structure to be applied to such losses.

At this time, the IRS has not issued definitive instructions on cryptocurrencies; nonetheless, bitcoin losses normally adhere to the same taxes regulations as other types of capital assets. In most cases, they may be deducted against profits from the sale of a capital asset, but not against gains from other sources, such as income. However, there are some restrictions regarding the times and ways in which deductions can take place.

For example, the amount of a loss that may be deducted for bitcoin transactions that are classified as a “sale” or “exchange” will be limited. On the other hand, taxpayers are eligible to deduct the full amount of their losses if their cryptocurrency was lost, stolen, or destroyed in any other manner (such as by burning it or through some other destructive method).

According to the findings of the research, the existing tax system does not adequately account for bitcoin losses, and it suggests adopting a different strategy in order to solve this problem. The tax system that is being suggested would make a difference between losses that are incurred as a consequence of transactions and those that are the result of the irreversible loss of assets.

According to the framework that has been presented, the only way for taxpayers to deduct losses related to cryptocurrencies that emerge from transactions is to do so against other types of capital gains. On the other hand, losses incurred as a consequence of the irretrievable destruction of assets would be totally deductable against other types of income.

In general, the findings of the research underscore the need for more clarity in the regulations governing the taxation of cryptocurrencies, as well as a more nuanced approach to the problem of how to handle bitcoin losses. Because of the widespread use of cryptocurrencies, it is imperative that the Internal Revenue Service (IRS) remain current with the rapidly evolving world of digital assets and provide transparent direction to taxpayers about their respective tax responsibilities.

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Google, UK, FTX and Binance in Crypto News

by Blockchain News

In the latest crypto news, Google has expanded its Web3 program by adding 11 blockchain partners to its Google for Startups Cloud Program. The program will provide expertise, grants, and services to emerging Web3 entrepreneurs. The UK government has also allocated $125 million to establish an AI task force aimed at promoting the country’s sovereign capabilities, such as public services, and fostering the adoption of safe and reliable AI foundation models. On the other hand, FTX has agreed to sell its LedgerX futures and options exchange and clearinghouse to M7 Holdings for $50 million, while Binance.US has backed out of its $1 billion Voyager asset purchase due to the “hostile and uncertain regulatory climate in the United States.”

In more detail, Google has partnered with 11 Web3 blockchain firms, such as Alchemy, Polygon, Celo, and Hedera, to expand its Google for Startups Cloud Program. As part of the program, pre-seed Web3 startups can receive up to $2,000 in Google Cloud credits valid for two years, while seeded startups can access $200,000 over two years for Google Cloud and Firebase usage. Additionally, blockchain partners are offering grants of up to $3 million to seeded companies in the program. Nansen, a blockchain analytics company, has also partnered with Google Cloud to provide real-time blockchain data for startups.

Meanwhile, the UK government has launched an AI task force to accelerate the country’s readiness for AI. The task force will focus on promoting sovereign capabilities, such as public services, and fostering the adoption of safe and reliable AI foundation models. The task force aims to launch its first pilots of AI usage and integration targeting public services in the next six months. The UK is committed to becoming a science and technology superpower by 2030 and is pushing for “safe AI” that regulates technology to “keep people safe” without limiting innovation.

In terms of cryptocurrency exchanges, FTX has agreed to sell its LedgerX futures and options exchange and clearinghouse to M7 Holdings for $50 million. The deal is subject to approval from the US Bankruptcy Court for the District of Delaware, which is scheduled to hear the case on May 4. FTX purchased LedgerX in August 2021 to expand its spot trading services, and the sale is part of FTX’s efforts to monetize assets and deliver recoveries to stakeholders.

On the other hand, Binance.US has backed out of its agreement to purchase bankrupt cryptocurrency brokerage Voyager Digital’s assets for $1 billion, citing the “hostile and uncertain regulatory climate in the United States.” The Voyager Official Committee of Unsecured Creditors expressed its disappointment at the news and said it was investigating potential claims against Binance.US. Voyager and the creditors’ committee will now work on distributing cash and crypto to customers directly via the Voyager platform.

In conclusion, the crypto world has seen significant developments this week, from Google expanding its Web3 program to the UK government allocating funding for an AI task force. FTX is set to sell LedgerX, and Binance.US backs out of the Voyager asset purchase. The industry remains dynamic and unpredictable, with companies and governments adapting to the ever-changing regulatory environment.

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US Bank Failures Shock Regulators

by Blockchain News

Regulators in the United States have been prompted to re-evaluate their supervision after the high-profile failures of Signature Bank, Silicon Valley Bank (SVB), and Silvergate Bank. The New York Department of Financial Services (NYDFS) and the US Federal Reserve Board have both published their internal reviews on the handling of the failures, which occurred in March.

SVB was closed by California regulators on March 10, and Signature Bank was moved against by the NYDFS on March 12. Silvergate Bank had announced its voluntary liquidation on March 8, setting off runs on the banks. The string of bank failures sent shockwaves through the financial industry, with U.S. President Joe Biden even feeling the need to tweet a response.

The Fed review of SVB’s failure found that the bank’s management failed to manage its risks, and supervisors “did not fully appreciate the extent of the vulnerabilities” of the bank as it “grew in size and complexity.” The report noted that “SVB’s foundational problems were widespread and well-known.”

The NYDFS review of Signature Bank’s failure highlighted areas where the regulator’s supervision could have been more effective. The report noted that the bank’s risk management and compliance programs were not adequate, and that the bank had a “lack of clarity” on its risk appetite.

The failures of these banks have prompted US regulators to re-evaluate their supervision of financial institutions. The NYDFS and the Fed have both acknowledged the need for improvements in their supervision and have pledged to take action to strengthen their oversight.

The failures have also raised concerns about the risks associated with banks that are friendly towards cryptocurrency. Both SVB and Silvergate Bank were known for their crypto-friendly policies, and some have speculated that their failures may be linked to their exposure to the volatile cryptocurrency market.

Overall, the failures of Signature Bank, SVB, and Silvergate Bank have highlighted the need for stronger regulatory oversight of financial institutions. While the NYDFS and the Fed have acknowledged the need for improvements in their supervision, it remains to be seen whether these improvements will be enough to prevent future bank failures.

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US House Committees To Hold Joint Hearings On Digital Asset Regulations

by Blockchain News

The US House Financial Services and Agriculture Committees, along with the Digital Assets, Financial Technology and Inclusion Subcommittee, and the Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold joint hearings in May to establish regulatory clarity for the digital asset ecosystem. Representative Patrick McHenry, the House Financial Services Committee chairman, has announced that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by crypto-friendly Senator Cynthia Lummis and Senator Kirsten Gillibrand.

The move was revealed in a joint announcement on April 27 from McHenry and Representative Glenn Thompson, chairman of the House Agriculture Committee; Representative French Hill, chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee; and Dusty Johnson, chairman of the Commodity Markets, Digital Assets, and Rural Development Subcommittee. The joint statement reads: “Our Committees are embarking on an unprecedented joint effort to pass and sign into law clear rules of the road for the digital asset ecosystem. We must strike the appropriate balance to protect consumers without stifling responsible innovation.”

McHenry spoke as part of a panel alongside crypto-friendly Senator Cynthia Lummis during the Consensus 2023 event on April 28, adding more context to the upcoming hearings. “We’re going to hold joint hearings when we return in May. This is going to be the first time we have had a holistic view for a House committee hearing around the regulation, our market structure around digital assets, and a holistic view of it.”

He also stressed that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by Lummis and Senator Kirsten Gillibrand. The Responsible Financial Innovation Act, also known as the Lummis-Gillibrand bill, was initially introduced in the US Senate in June 2022, and addresses Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) jurisdiction, stablecoin regulation and crypto taxation, among other issues.

The wide-sweeping bill has faced delays, likely due to its complexity for non-crypto-versed Senators. Lummis and Gillibrand have since revised the bill and are expected to release the next draft soon. Commenting on the revised bill, Lummis suggested that this iteration will likely have an additional focus on “national security interests” such as cyber security. “Some of the people that I speak to that remain very skeptical about digital assets are concerned that cybercrime is not adequately addressed in our bill. So I think you’ll see a stronger cybercrime aspect to our bill. I think you’ll see some provisions that require certain registration […] so that companies are properly regulated and vetted.”

The joint hearings in May will aim to provide regulatory clarity on the digital asset ecosystem and strike the appropriate balance to protect consumers without stifling responsible innovation. The hearings will focus on addressing the market structure around digital assets in the United States, which includes capital raising and transitioning products from a securities regime to a commodities regime.

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Twitter Enables Monetization for Creators

by Blockchain News

Tesla CEO Elon Musk has made significant changes to Twitter since taking it over, including mass layoffs and the introduction of Twitter Blue subscriptions. Now, Twitter has enabled monetization for creators through a new subscription service, allowing them to charge followers a monthly fee for access to exclusive content.

The feature is targeted at improving follower engagement and creating new revenue streams on the social media platform. Known as “Subscriptions”, Twitter users can charge followers a monthly price from one of the price points made available by Twitter. Once paid, subscribers can access the creator’s exclusive content, which is not viewable to the public.

To incentivize creators, Twitter will allow them to keep 97% of the revenue up to $50,000 in lifetime earnings, after which the revenue split drops to 80%. Twitter has partnered with payments processor Stripe to payout creators on the platform.

However, the revenue share will only begin once creators earn the minimum threshold of $50. Additionally, subscription services are non-refundable, even if a creator’s Twitter account gets suspended for any reason. In such scenarios, users are required to manually unsubscribe to avoid auto-monthly payments to inactive Twitter accounts.

The introduction of content creator subscriptions has been welcomed by members of Crypto Twitter, who have built credibility and a massive following on Twitter over the years.

Musk’s ongoing initiatives to redesign Twitter include using artificial intelligence (AI) to detect and deter misinformation on the platform. Despite previously warning the world against AI development due to societal concerns, Musk has reportedly purchased nearly 10,000 graphics processing units to build the upcoming AI tools.

The move towards monetization for creators is part of Musk’s efforts to turn Twitter into a profitable business. The company has taken several drastic measures since Musk’s takeover, including mass layoffs and the introduction of Twitter Blue subscriptions. Musk saw the introduction of subscriptions as a much-needed revenue stream for the company, despite resistance from previously-verified individuals who did not want to pay a monthly fee for a blue checkmark on their account.

Overall, the new monetization feature is a step towards greater user-centricity on Twitter, allowing creators to earn revenue from their content and potentially make a career out of it. With the increasing popularity of social media platforms as a source of news and information, Twitter’s move to enable monetization for creators could help to promote citizen journalism and provide more diverse perspectives on global events.

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Mastercard Launches Web3 Solution for Crypto Verification

by Blockchain News

Mastercard has launched a new Web3 solution aimed at improving the verification standards in the digital asset space. The solution, called “Mastercard Crypto Credential,” provides a unique identifier to users, enabling them to verify that an address they want to send funds to has been vetted by Mastercard and has been operating in compliance with the firm’s standards. The solution will support compliance through the exchange of metadata and help reduce the opportunities for bad actors.

As part of the solution, Mastercard has partnered with several crypto wallet providers, including Bit2Me, Lirium, Mercado Bitcoin, and Uphold. The firm has also partnered with several blockchains, including Aptos, Avalanche, Polygon, and Solana. To ensure compliance, Mastercard will tap into CipherTrace’s suite of services, including CipherTrace Traveler, to help verify addresses and support Travel Rule compliance for cross-border transactions.

The solution is designed to reduce the opportunities for bad actors and the risk of funds being lost for good. Even if bad actors slip through the cracks and obtain a unique identifier, Mastercard can quickly revoke their verification if they have engaged in nefarious activity. The firm’s long list of partners behind the solution is a testament to its commitment to enhancing the crypto sector’s standards.

Mastercard has been steadily increasing its exposure to the crypto sector over the past few years. This latest announcement comes just a few weeks after the firm launched a non-fungible token (NFT) gated musician accelerator program in collaboration with Polygon. The program offers free access to materials, unique artificial intelligence tools, and other experiences to holders of Mastercard’s Music Pass NFT.

Visa, Mastercard’s competitor, has also made a move in the crypto space by announcing a new stablecoin payments-focused project. Cuy Sheffield, the firm’s head of crypto, announced the project on Twitter and shared a job listing for the role, which notes that the company is “building the next generation of products to facilitate commerce in everyone’s digital and mobile lives.” The company is on the lookout for someone with strong experience in Web3 and blockchain tech.

In conclusion, Mastercard’s new Web3 solution, “Mastercard Crypto Credential,” is designed to enhance user verification standards and reduce the opportunities for bad actors in the digital asset space. The solution’s unique identifier will provide users with an added layer of security, allowing them to instantly verify that an address they want to send funds to has been vetted by Mastercard and has been operating in compliance with the firm’s standards. The firm’s long list of partners and its commitment to enhancing the crypto sector’s standards highlights its dedication to innovation and staying ahead of the curve.

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ChatGPT Ban Lifted in Italy

by Blockchain News

OpenAI’s interactive AI chatbot, ChatGPT, has had its temporary ban in Italy lifted after being accused of violating GDPR. On March 31, the Italian data protection agency, Garante, issued the ban after suspecting that ChatGPT had violated the European Union’s General Data Protection Regulations. The ban was lifted on April 29, after the company complied with the regulator’s transparency demands and implemented age-gating measures.

ChatGPT was required to reveal its data processing practices and comply with other legal requirements to comply with the Italian regulator’s demands. The ban was issued in response to a data breach that occurred on March 20. The company’s compliance with local authorities is viewed positively, and the willingness to comply with transparency demands has been widely welcomed by ChatGPT’s global user base.

The ban on ChatGPT initially raised concerns about potential AI regulations. However, the swift compliance of OpenAI with local authorities indicates a positive move towards the regulation of AI. European Union legislators are working on a new bill to monitor AI developments. If this bill is signed into law, generative AI tools like ChatGPT and Midjourney will be subject to disclosure of the use of copyrighted materials in AI training.

ChatGPT is a popular interactive AI chatbot developed by OpenAI, capable of conversing with users on a wide range of topics. The chatbot uses deep learning techniques to analyze user input and generate responses. It has gained widespread popularity and is used by individuals and businesses globally.

The ban on ChatGPT in Italy highlights the importance of complying with data protection regulations. GDPR is a set of regulations designed to protect the privacy and personal data of individuals within the European Union. Companies that operate within the EU or process the personal data of EU residents are required to comply with GDPR. Failure to comply with GDPR can result in significant fines and legal penalties.

OpenAI’s swift compliance with the Italian regulator’s demands demonstrates the company’s commitment to data protection and privacy. It also highlights the need for companies to be transparent about their data processing practices and to implement measures to protect user privacy. The lifting of the ban on ChatGPT is a positive development for the AI industry and demonstrates the importance of compliance with data protection regulations.

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Tencent Cloud Launches Deepfake Generator

by Blockchain News

Deepfake Generator, a New Service Offered by Tencent Cloud, Gives Users the Ability to Generate Fake Videos of Other People

A new digital person production platform has been introduced by Tencent Cloud, the cloud services provider of the Chinese tech giant Tencent. This platform makes use of deepfake technology in order to generate fake films of humans. Users are able to make convincing films using the platform, which is powered by Tencent’s in-house artificial intelligence (AI) capabilities. The movies can be generated using a three-minute video clip and 100 words of audio content.

Scammers are using deepfake videos an increasing amount to imitate renowned personalities in order to deceive investors. These films have gotten more popular. Even Elon Musk, CEO of Tesla, has fallen victim to deepfakes, prompting him to issue a warning about the growing number of impersonators who use his picture to promote cryptocurrency schemes.

According to Jiemian, a local media site, the deepfake generator on Tencent Cloud can analyze and train itself on three-minute films and 100 speech samples, generating a convincing deepfake video within twenty-four hours. The price of the service is about equivalent to $145 or 1,000 yuan. According to a report from a major media site known as The Register, Tencent has purportedly acknowledged the breakthrough and underlined the fact that the service is capable of developing deepfakes in both Chinese and English.

The development of digital people may be done in one of five different forms, including 3D realistic, 3D semi-realistic, 3D cartoon, and 2D real person and cartoon respectively. Tencent plans to leverage the service in order to offer live-streamed infomercials aimed at the Chinese audience. In addition, the company sees a number of additional possible uses for the service, such as representing attorneys, physicians, and other professions.

Tencent isn’t the only Chinese tech company working on their own version of generative AI tools to compete with market leader ChatGPT. Huawei and Baidu are also working on their own versions of these tools. Concerns have been raised, however, concerning the ethical implications of deepfake technology and its ability to be exploited for fraudulent or harmful reasons. This is because of the technology’s potential for abuse. As a consequence of this, it is essential for businesses such as Tencent to make certain that their deepfake generating platform is used in an ethical manner and with the right precautions taken.

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