Day: May 1, 2023

Coinbase executive discovers ChatGPT jailbreak

by Blockchain News

An Executive from Coinbase Has Discovered a “Jailbreak” for the ChatGPT AI Tool, Which Predicts Bizarre Cryptocurrency Price Scenarios

Coinbase’s chief of business operations, Conor Grogan, recently made a statement in which he claimed to have found a “jailbreak” for the artificial intelligence application ChatGPT. Grogan published a snapshot of the findings from ChatGPT in a tweet on the 30th of April. The results revealed that the tool had given a 15% likelihood that Bitcoin will “fade to irrelevancy” by the year 2035, with values plummeting over 99.99%. Grogan’s tweet was sent on April 30. Additionally, ChatGPT predicted that there is a 20% chance that Ether will become irrelevant and approach price levels close to zero by the year 2035. Even less self-assured was the tool about Litecoin and Dogecoin, assigning odds of 35% and 45%, respectively, for each currency to fall to a value close to zero.

The artificial intelligence tool known as ChatGPT generates replies to prompts by using natural language processing. Grogan used the program to assign probability to a variety of political forecasts and other situations, including as the influence of AI on humans, the presence of aliens, and religion. A crazy forecast was made on ChatGPT that “aliens have visited Earth and are being covered up by the government.” This prediction was given a chance of 10%.

Grogan is a dedicated user of ChatGPT, and he provided others with a script that replicates the prompt that he used to build the tables. He came to the conclusion that the tool is “generally” a “big fan” of Bitcoin but is “more skeptical” when it comes to other cryptocurrencies.

As a tool for anticipating price movements and other trends in the cryptocurrency field, ChatGPT has gained a significant amount of popularity in recent months. The forecasts that it makes, however, should be taken with a grain of salt since they are based on probabilities and are not a guarantee of the future performance of the asset. Grogan’s discovery of a “jailbreak” also raises the possibility of a security breach since it enables the tool to make more accurate and possibly sensitive predictions.

In general, the use of artificial intelligence technologies inside the cryptocurrency market, such as ChatGPT, sheds insight on the expanding function of technology within the sector. As more traders and investors look to these tools for insights and forecasts, it will be crucial to keep in mind the limits of these tools as well as the possible hazards that they pose.

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Coinme Fined $4 Million by SEC

by Blockchain News

The US Securities and Exchange Commission (SEC) has fined Coinme, a cryptocurrency exchange, nearly $4 million for allegedly offering unregistered securities and making “misleading statements” about its crypto token, UpToken. Coinme, its subsidiary Up Global SEZC, and its CEO, Neil Bergquist, were charged by the SEC on April 28, with Up Global agreeing to pay a $3.52 million penalty, for which Coinme was also held liable. The SEC alleged that Coinme’s Initial Coin Offering (ICO) of UpToken between October and December 2017 was an investment contract under the Howey test and was an unregistered securities offering. The ICO raised around $3.6 million to expand Coinme’s fleet of Bitcoin ATMs, with the funds used to add 30 ATMs, and UP holders received benefits such as discounted fees and cashback when using the ATMs. However, in January 2019, Coinme changed its offering and partnered with Coinstar to use its cash-counting kiosks to facilitate cash-to-crypto transactions instead of its own ATMs. Coinme shut down all of its ATMs by July 2019, and there is currently no use for UpToken, with its market cap falling to around $50,000 and 24-hour trading volumes topping just over $180.

Coinme was found to have offered unregistered securities, and the SEC handed down fines totalling almost $4 million to the company, its subsidiary Up Global SEZC, and the CEO of both firms, Neil Bergquist. The SEC found that Coinme’s ICO of UpToken between October and December 2017 was an unregistered securities offering, and the ICO was considered an investment contract under the Howey test. Coinme raised approximately $3.6 million through the ICO to expand its fleet of Bitcoin ATMs, adding 30 ATMs with ICO funding. UP holders received discounted fees and 1% cashback in UP when using the ATMs. However, in January 2019, Coinme changed its offering, partnering with Coinstar to use its cash-counting kiosks for cash-to-crypto transactions instead of its own ATMs. Coinme shut down all of its ATMs by July 2019, rendering UpToken unusable. The SEC also found that Bergquist and Up Global made false and misleading statements about the demand for UpToken and the amount raised in the ICO.

The SEC’s action against Coinme underscores the agency’s increased scrutiny of the cryptocurrency market, particularly with regard to ICOs and the sale of unregistered securities. The SEC has warned repeatedly that ICOs are subject to federal securities laws, and that any token offered or sold in an ICO must be registered or qualify for an exemption from registration. Failure to comply with these laws can result in enforcement action, as demonstrated in the case of Coinme.

Coinme’s ICO of UpToken highlights the risks associated with investing in ICOs, particularly those that are not registered with the SEC. Investors should conduct thorough due diligence and carefully review the offering materials before investing in any ICO. The case also highlights the importance of transparency and accurate disclosure in the cryptocurrency market, with companies facing enforcement action if they make false or misleading statements.

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Crypto Hacks and Scams on the Rise

by Blockchain News

Crypto security and auditing company CertiK reported a total loss of $103.7 million due to vulnerabilities, frauds, and hacks in the month of April. Because of this, the overall loss for the year amounts to 429.7 million dollars. The month was particularly marked by major hacks, including the theft of $22 million from a hot wallet exploit at the Bitrue exchange, which resulted in a loss of $22 million; the hack of South Korea’s GDAC exchange, which resulted in a loss of $13 million; and the theft of $25.4 million due to an exploit of several MEV trading bots on April 3.

According to reports from CertiK, the overall losses incurred by crypto and DeFi exploits throughout the month amounted to $74.5 million. This is about half of the total $145 million that was exploited during the first four months of the year. assaults against flash loans were also common, resulting in losses of around $20 million. Yearn Finance was the primary victim of these assaults, which occurred when a hacker exploited an outdated smart contract on April 13.

In April, exit scams were another factor that contributed to the large amount of money lost, which was $9.4 million. The most successful exit scam for the month was perpetrated by Merlin DEX, which resulted in a loss of $2.7 million. Considering that the protocol had been audited by CertiK, which had previously warned about centralization problems, this was an especially worrying development. After the attack, Certik implemented a compensation plan, in which they demanded that the malicious developer pay back 80% of the stolen funds and offered a white hat bounty of 20% of the total amount.

In the month of April, the Rekt Database maintained by De.Fi documented over fifty crypto-related scams, hacks, and rug pulls. These Memecoin rug pulls made up a significant chunk of the total. The flash loan assault against the Polygon-based Ovix protocol, which occurred on April 28 and resulted in a loss of $2 million, was the most recent incident.

Hacks and frauds using cryptocurrencies are becoming more common, highlighting the need for stronger security measures inside the cryptocurrency ecosystem. Before putting money into any cryptocurrency project, it is essential for users and investors to do extensive research and due diligence on the project. Auditing companies such as CertiK play an essential part in determining the nature of any possible security threats that may exist and in elevating the level of industry-wide security.

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Block’s 5nm Bitcoin Mining Chip Prototype

by Blockchain News

The financial services and technology business Block, which is controlled by Jack Dorsey, has just finished the prototype design of its new 5nm Bitcoin mining chip. This was done with the intention of decentralizing the supply of Bitcoin mining rigs. The business noted that the development of Bitcoin mining ASIC rigs is both financially and technically hard, which has led to an excessive concentration of the ownership of specialized mining silicon in the hands of a few number of enterprises. It is believed that miners and the Bitcoin network as a whole would suffer from the negative effects of this concentration.

In response, Block intends to make Bitcoin mining technology open source wherever it is feasible by selling standalone ASICs and other hardware components. This move is intended to enhance the size of the Bitcoin mining hardware ecosystem while also maximizing the amount of innovation that may occur inside it. Because of the actions taken by the firm over the previous few months, it will now be able to experiment with new designs, which will help the company bring Bitcoin mining chips to market that are both more efficient and less expensive.

As a means of accelerating this development drive, Block has made a significant purchase of ASIC chips from Intel, prompting the latter to stop accepting new orders for its Blockscale 1000 Series ASICs. This move was made in order to shorten the development cycle. Block expects that by purchasing these ASICs from Intel, it would be able to speed up the development of its own 3nm chip, which, upon its eventual release, the company says will be the most technologically sophisticated semiconductor to date.

The significance of ASIC development to the Bitcoin mining process is reflected in Block’s concentration on the development of these devices. ASICs are computerized devices that are tailored to accomplish a particular computational function. They are commonly used for mining proof-of-work cryptocurrencies like Bitcoin, which need a specific computational task to be completed. When individual components of a chip get smaller, it becomes possible to pack more transistors into a silicon die of the same size. This results in increased overall efficiency and a reduction in the amount of heat that is generated.

Although 5nm ASIC chips have been available for some time, the first 5nm ASIC was not released until 2021 by the Chinese mining company Canaan. Despite this, no company has yet made the ASIC chip designs that they produce open source. It is anticipated that Block’s dedication to open source technology will have a substantial influence on the Bitcoin mining business. This will result in additional alternatives being available to miners and will contribute to the network’s efforts to become more decentralized.

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JPMorgan to Acquire First Republic Bank Assets

by Blockchain News

JPMorgan Chase is poised to acquire the assets of First Republic Bank (FRB), after regulators closed the bank on May 1. JPMorgan and several other banks had submitted bids to acquire the troubled bank’s assets after early efforts to rescue it failed.

As part of the purchase and assumption agreement with the FDIC, JPMorgan will take on all of FRB’s assets, including uninsured deposits. With $229.1 billion in assets and $103.9 billion in deposits, FRB was a significant acquisition for JPMorgan.

In addition to acquiring the bank’s assets, JPMorgan also entered into a loss-sharing agreement with the FDIC for residential and commercial loans acquired by FRB. Under the agreement, any losses and recoveries on the loans covered by the loss-share agreement will be shared between the FDIC and JPMorgan.

All depositors of FRB will become part of JPMorgan and will have access to their total deposits insured by the FDIC. The 84 locations of FRB in eight states will reopen as JPMorgan Chase, allowing customers to continue banking services at the current branch until they receive any change notification from JPMorgan.

The trouble began for FRB on April 26 when news of a government receivership surfaced. The bank’s shares dropped 20% in just a few hours following the announcement. The days following the announcement were even more volatile for the bank before regulators eventually closed the bank.

With FRB’s closure, it becomes the latest US bank to collapse in 2023, joining Silicon Valley Bank and Signature Bank.

This acquisition is a significant move for JPMorgan, as it expands its reach and strengthens its presence in the banking industry. JPMorgan has a history of making large-scale acquisitions, and this acquisition of FRB’s assets follows a pattern of growth through strategic acquisitions.

First Republic Bank had a reputation as a premier private bank for high-net-worth individuals and businesses. However, the bank had been struggling for some time due to a high level of non-performing loans and other financial difficulties. Despite efforts to rescue the bank, regulators determined that the best course of action was to close it and transfer its assets to another institution.

The loss-sharing agreement between JPMorgan and the FDIC is designed to mitigate any potential losses and ensure that depositors are protected. This agreement is a standard part of any acquisition involving a failed bank, and it ensures that the FDIC is able to recover as much of its costs as possible.

Overall, JPMorgan’s acquisition of First Republic Bank’s assets is a significant development in the banking industry. As JPMorgan continues to grow and expand its reach, this acquisition demonstrates its commitment to providing excellent banking services and support to customers across the United States.

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Japan Concerned About AI Chatbots

by Blockchain News

The use of chatbots as integrations into new forms of technology and society has been rapidly growing in recent years. On the other hand, this has led to increased public concern on their effect on society. The results of a recent study that was conducted in Japan and made public on the 30th of April found that 69.4% of the country’s population favors more stringent control in the development of AI. According to a study by Kyodo News, many individuals are concerned about the proliferation of artificial intelligence chatbots.

The poll was carried out as a component of a larger study that included a variety of issues, including the current approval rating of the government and events relating to pandemics. The AI component, on the other hand, was added not long after Japanese government officials voiced their support for OpenAI, the firm that is responsible for ChatGPT. On April 10th, the Chief Cabinet Secretary of the Japanese government, Hirokazu Matsuno, said that the government is considering integrating AI into its systems, but only if concerns around privacy and cybersecurity are satisfactorily addressed.

Additionally, Japan has been actively advocating for a regulatory climate that is friendlier to innovation in the crypto and Web3 sectors. On April 6th, a new white paper titled “Ways to Expand the Local Crypto Scene” was published by the team working on the country’s Web3 initiative.

The regulation of AI has been a matter of intense interest for governments all around the globe. It was one of the first nations to place a temporary ban on the use of ChatGPT; however, authorities have since said that the technology may be allowed to rejoin the country after it complied with the criteria for transparency. In Germany, supervisory authorities have begun their own inquiry into whether or not ChatGPT complies with the General Data Protection Regulations. Legislators from all member states of the European Union are now putting the finishing touches on the Artificial Intelligence Act, which will serve as a model for the rest of the world.

As a result of the rapid increase in the development of AI technology, China will soon implement required security inspections for artificial intelligence (AI) enterprises as well as the technology itself.

The worries that have been voiced in Japan are reflective of a larger discourse taking place all across the world concerning the effect that AI will have on society. AI chatbots have the potential to transform many different sectors; nevertheless, it is essential to guarantee that their development is carried out in an ethical manner and with sufficient regulation in order to preserve the privacy and security of individuals.

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Nigeria Plans to Regulate Digital Asset Platforms

by Blockchain News

Nigeria, one of the most curious nations about cryptocurrencies, is preparing new industry regulations for digital asset platforms. The Nigerian Securities and Exchange Commission (SEC) is considering new regulations that would allow licensed digital exchanges to list tokens backed by certain assets, according to a report by Bloomberg.

Abdulkadir Abbas, the head of securities and investment at the Nigerian SEC, noted that the authority plans to only authorize listings of tokens based on assets such as equity, debt, or property. Cryptocurrencies like Bitcoin and Ether will not be among those assets. The aim is to register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers, and tokenized coins issuers. However, the SEC will not register crypto exchanges until the central bank provides clear regulations for the crypto market.

License applicants would undergo a year of “regulatory incubation,” during which the SEC would study their operations and render their services in the country, according to Abbas. He added that by the 10th month, the SEC should be able to make a determination whether to register the firm, extend the incubation period, or even ask the firm to stop operation.

The Central Bank of Nigeria had banned local banks from providing services to cryptocurrency-related platforms in early 2021. On the ban, the regulator cited high risks associated with trading cryptocurrencies such as Bitcoin. The central bank also promised to impose strict penalties for any lender or financial institution failing to comply with the directive.

Despite the ban, Nigeria has emerged as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies. Nigeria ranks second by search interest for the keyword “Bitcoin,” behind El Salvador, which adopted Bitcoin as legal tender in 2021, according to data from Google Trends. Other jurisdictions in the top-five crypto-curious countries list include Slovenia, Netherlands, and Switzerland.

Nigeria was also among the top 20 countries in terms of crypto adoption in 2022, according to Chainalysis’ crypto adoption index.

While prohibiting cryptocurrencies, the Central Bank of Nigeria has been actively promoting its central bank digital currency known as the eNaira. The eNaira reportedly saw increased adoption due to national fiat reserves facing severe shortages.

In conclusion, Nigeria is taking steps to regulate digital asset platforms, with the SEC considering allowing licensed digital exchanges to list tokens backed by certain assets. The country aims to register fintech firms as digital sub-brokers, crowdfunding intermediaries, fund managers, and tokenized coins issuers. However, the SEC will not register crypto exchanges until the central bank provides clear regulations for the crypto market. Despite the ban on cryptocurrencies, Nigeria has emerged as one of the most active countries in terms of adoption and curiosity about Bitcoin and other cryptocurrencies.

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Bhutan Embraces Bitcoin Mining with Green Energy

by Blockchain News

Bhutan, the small Himalayan kingdom, has been quietly accumulating and mining Bitcoin since April 2019. The country of less than 800,000 people is leveraging its abundant hydroelectric power to power its Bitcoin mining operations. Known for its focus on “Gross National Happiness” and picturesque landscapes, Bhutan has found ways to harness its immense hydroelectric potential, which accounts for 30% of its gross domestic product.

According to an exposé in local Bhutanese news and inquiries from Forbes, Bhutanese officials have confirmed that mining began when the price of Bitcoin was around $5,000 in April 2019. The price per Bitcoin has since soared to roughly $28,000 per coin at the time of writing. While the scale of Bhutan’s mining operations remains a mystery, some Druk Holding and Investments (DHI) employees have listed “crypto mining” as their tasks and skills on their LinkedIn profiles.

It is worth noting that the state-owned holding company DHI has invested millions of dollars in cryptocurrency holdings, with the funds managed on behalf of its people. The government is reportedly exploring partnerships to expand its mining operations further. One such partnership is with Nasdaq-listed mining company Bitdeer to secure 100 megawatts of power for a Bitcoin mining data center in Bhutan. This partnership would increase Bitdeer’s mining capacity by about 12%.

It is unclear why the government chose not to disclose this project to its citizens or international partners. However, Bhutan’s focus on green energy and sustainability makes it an ideal destination for mining Bitcoin. Bitcoin mining is the world’s cleanest industry, with more than 50% of its energy sources being renewable or clean energy. Due to cheap, abundant hydroelectric power, DHI reported that Bhutan is an ideal destination for mining Bitcoin.

Bhutan adds to a long list of regions from East Africa to Scandinavia mining Bitcoin with hydropower, one of the cheapest clean energy sources. The country’s commitment to green energy and sustainability is commendable, and it sets an excellent example for other countries looking to adopt Bitcoin mining. With its vast hydroelectric potential, Bhutan has the potential to become a significant player in the Bitcoin mining industry.

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Temasek invests in algorithmic currency system

by Blockchain News

Temasek, the government-owned investment firm of Singapore, has recently invested $10 million in Array, a developer of an algorithmic currency system based on smart contracts and artificial intelligence. Array has announced that the funding round marks its second, raising its valuation to over $100 million.

The new Temasek-backed algorithmic currency system is aimed at providing a more stable, efficient, and scalable asset than traditional cryptocurrencies like Bitcoin. The system is expected to have a variety of use cases, including payments, remittances, and investments.

Array’s smart contract platform, ArrayFi, is designed to enable decentralized applications built on top of its network and driven by its proprietary AI algorithm ArrayGo. ArrayGo operates independently, without any human or institutional control, and is triggered solely by market actions. According to a Medium blog post by the Array team, a traditional bonding curve is implemented manually to ensure the value of the token remains stable and predictable for investors and traders indefinitely. The bonding curve is implemented into a smart contract that governs the issuance and trading of the native token Ara (ARA). The smart contract platform also aims to protect Array users against “pump and dump” schemes.

Temasek’s investment in Array comes several months after the Singapore government admitted that the company suffered reputational damage due to investing in the collapsed crypto exchange FTX. In November 2022, Singapore’s Deputy Prime Minister Lawrence Wong argued that Temasek suffered more than just financial losses due to investing in FTX.

Despite suffering significant losses, Temasek continues to invest in cryptocurrency projects. In April, Temasek also participated in a $10 million series A round for the United States-based impact-verification and intelligence firm BlueMark.

Temasek is fully owned by the Ministry of Finance but operates independently. The company was forced to write down its entire $275 million FTX investment, which accounted for just 0.09% of Temasek’s $403 billion portfolio as of March 2022. Despite this loss, Temasek continues to be a major investor in various industries, including technology, healthcare, and financial services.

In conclusion, Temasek’s investment in Array highlights the company’s continued interest in cryptocurrency projects despite significant losses in the past. The new algorithmic currency system developed by Array aims to provide a more stable and efficient asset than traditional cryptocurrencies, with a variety of use cases such as payments, remittances, and investments. With the backing of Temasek, Array’s valuation is set to exceed $100 million, indicating significant potential for growth and development in the future.

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Meta Files for Debt Shelf Offerings

by Blockchain News

Tech giant Meta, formerly known as Facebook, has submitted a filing to the United States Securities and Exchange Commission (SEC) for new debt shelf offerings. The company filed the prospectus on May 1, stating that it “may, from time to time, offer and sell debt securities in one or more series.” The provision grants the issuer, Meta, the ability to register a new issue of securities without the need to sell the entire issue at once.

Debt securities may be offered and sold to or via underwriters, brokers, dealers, or agents as designated from time to time, directly to one or more other purchasers, or through a combination of such methods. The filing did not disclose the exact amount of debt securities being offered.

Shelf offerings have the potential to be helpful to investors by occasionally giving insights into a company’s game plan for raising capital. However, new shares could also potentially negatively impact the price of current shares. On Twitter, the community responded by trying to connect the dots to Meta’s recent spending on AI development and buybacks as a potential reason for the new alternative funding sources.

Meta’s latest earnings report revealed a nearly $4 billion loss from its metaverse unit, following a deficit of $14 billion over the last year. Despite this, sources close to Meta recently shared that the company offers its metaverse developers salaries of anywhere from $500,000 to $1 million a year. This filing also comes shortly after Meta’s first-ever bond offering in August 2022, which raised $10 billion to fund share buybacks and business investments.

Meta’s move to file for debt shelf offerings could suggest that the company is looking to raise additional capital. The filing did not disclose the specific use of the funds, but Meta’s recent investments in AI development and the metaverse could provide some clues. Additionally, the nearly $4 billion loss from the metaverse unit could indicate a need for additional funding to support the development of this technology.

Overall, Meta’s filing for debt shelf offerings is an interesting development for the company and could provide some insights into its plans for raising capital. The impact of the new debt securities on the price of current shares remains to be seen, but investors will be watching closely for any updates on Meta’s use of the funds.

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