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February 3, 2024 The Daily Hodl

Ripple, Coinbase, a16z invest $78M in pro-crypto PAC ahead of US elections

December 18, 2023 Coin Telegraph

US regulators consider regulating political deep fakes ahead of 2024 election

August 11, 2023 Coin Telegraph

The Federal Election Commission in the U.S. unanimously voted to advance a petition to regulate political ads that use artificial intelligence.

The United States Federal Election Commission has pushed a petition forward in a unanimous vote on Aug. 10, which would potentially regulate deep fakes in political ads that were generated by artificial intelligence (AI).

The petition targets ads that use AI to portray political opponents acting or saying things that they did not, ahead of the 2024 elections.

Robert Weissman, the president of the advocacy organization behind the petition, Public Citizen, called deep fakes a “significant threat to democracy.”

“The FEC must use its authority to ban deep fakes or risk being complicit with an AI-driven wave of fraudulent misinformation and the destruction of basic norms of truth and falsity.”

Already, instances have been seen of candidates using fake, AI-generated images as a part of their campaigns. Flordia governor Ron DeSantis, who is up for the Republican nomination, spread three images of the former U.S. president Donald Trump embracing Dr. Anthony Fauci.

In the FEC meeting, Public Citizen asked for clarification on an already existing law that aims to prevent “fraudulent misrepresentation” in political campaigns and if AI deep fakes are included.

Lisa Gilbert, the executive vice president of Public Citizen said:

“The need to regulate deep fakes and other deceptive uses of AI in election ads becomes more urgent with each passing day.”

The FEC decided to push the petition forward, with the next step being a 60-day public comment period, which Gilbert called an “encouraging sign” of AI’s threat to democracy being “taken seriously” by regulators.

Craig Holman, Ph.D., a lobbyist for government affairs with Public Citizen, commented on the public comment period saying:

“A public comment period will provide a critical forum for policy advocates, experts, and voters to express their concerns about a potential deluge of deep fake ads in the upcoming election cycle.”

This latest move follows the initial petition filing from Public Citizen back in July. The petition stressed the same sentiment highlighting that deep fakes could go so far as “swing election results.”

Following the publication of the first petition, members from both chambers of the U.S. Congress responded with letters of support.

Cointelegraph reached out to Public Citizen for further comment on their efforts on the issue.

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US and China AI-tech standoff shows signs of spreading to other countries

August 10, 2023 Coin Telegraph

China

The ongoing spat between the United States and China over emerging tech like AI continues as U.S. President Joe Biden restricts investments.

The emergence of high-level artificial intelligence (AI) technology has caused the United States and China to safeguard their resources in a race to develop the most powerful systems.

A tense relationship is developing between the two world powers, as the Biden Administration announced it would limit Chinese tech investments in semiconductors, quantum computing and AI.

This move subsequently sparked concerns from regulators in other countries, with lawmakers in the United Kingdom and the European Union considering their next move in response to the U.S. action.

The U.S. guards AI and other tech

On Aug. 9, The White House released two executive notes about AI developments in full or in part. The first outlined a new opportunity for hackers to compete for monetary compensation by using AI to help secure U.S. infrastructure from cybersecurity vulnerabilities.

However, the second defined China, Hong Kong and Macau as a “country of concern.” It stated the U.S. would regulate investments in such countries and sectors that “covered national security technologies and products.”

This included semiconductors, which are often used in the development of AI, microelectronics and quantum information technologies. It deemed these sectors “critical for the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.”

The document read:

“Rapid advancement in semiconductors and microelectronics, quantum information technologies, and artificial intelligence capabilities by these countries significantly enhances their ability to conduct activities that threaten the national security of the United States.“

Currently, only the countries mentioned above were included in the note, though in a remark to Reuters, a Biden administration official said other countries could be added in the future.

The U.S. has already been cracking down on outward investments in Chinese technologies, along with Chinese access to services and products coming from the United States.

In October 2022, U.S. regulators placed bans on the export of semiconductor chips to China, which are needed to create high-powered AI systems, and have since expressed the desire to further restrict their availability.

China responds to tech spat with the U.S.

China immediately responded to the announcement from the Biden administration in a statement via the official channel of the Chinese Embassy in the United States.

The Chinese Ministry of Foreign Affairs spokesperson said it “strongly deplores and firmly opposes” the “single-minded” decisions of the U.S. on its investments in China. It said such a move politicizes business engagement and “overstretches” security concepts.

“This is blatant economic coercion and tech bullying, an act that seriously violates the principles of market economy and fair competition…”

The statement continued, calling the move “de-globalization” and an effort to phase China out of the scene.

China said it will follow the developments closely and will work in favor of its rights.

In response to previous U.S. measures around restricting AI technologies, China announced it would be tightening its controls on the export of AI chip-making materials.

In an Aug. 10 report from the Financial Times, sources close to the matter said that China’s internet giants, including Baidu, ByteDance, Tencent and Alibaba, have all made billion-dollar orders of Nvidia A800 processors in fears of even tighter controls from the United States.

The EU and U.K. consider the recent restrictions

Biden’s action against China immediately sparked responses from regulators overseas.

On Aug. 10, a spokesperson from the office of U.K. Prime Minister Rishi Sunak said the new orders clarify the U.S. position and the U.K. will consider the measures as it continues to “assess potential national security risks attached to some investments.“

Sunak and Biden signed an agreement to strengthen their alliance in June, which included deepening ties in areas such as advanced technologies like AI.

The European Commission made a statement on the same day, saying it would also analyze the U.S. decision.

European regulators have been actively monitoring developments in the AI sector and have been among the first to propose laws around the development and rollout of the tech.

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US Senate wants companies to report investments in Chinese technologies

July 26, 2023 Coin Telegraph

The Senate overwhelmingly supported legislation requiring U.S. companies to report any outbound investments into Chinese technologies.

On July 25, the United States Senate backed bipartisan legislation mandating U.S. companies to report any investments in Chinese technologies.

In an overwhelming vote of 91 to 6, the Senate supported the amendment to the National Defense Authorization Act (NDAA), which is anticipated to be implemented later in 2023.

The amendment will require U.S. companies to notify federal agencies of outbound investments in Chinese technologies, including semiconductors used in artificial intelligence (AI).

Democratic Senator Bob Casey and Republican Senator John Cornyn penned the amendment, which is a version of the Outbound Investment Transparency Act that targets risks of U.S. foreign investments in countries like China.

Casey commented on his support of the amendment by saying:

“We need this type of outbound investment notification to understand just how much... critical technology we are transferring to our adversaries via these capital flows.“

He concluded by saying that with such information, the U.S. can position itself to “take control” of its economic future.

The bill’s current version is expected to pass through the Senate by the end of the week before being reconciled with another bill passed in the House of Representatives earlier and finally going to the desk of President Joe Biden.

These new measures come as the U.S. and China continue a tit-for-tat relationship surrounding emerging technologies.

On June 28, U.S. officials announced that they are considering restricting the computing power in semiconductor chips to lessen the flow of AI chips available in the Chinese market.

A few days after that announcement, on July 3, the Chinese government announced its own plans to impose export controls on metals used to manufacture semiconductors.

The latest move came from the U.S. on July 5, as it reportedly considers adding controls to the amount of access Chinese companies will have to U.S.-based cloud computing services. This would include products from cloud service providers such as Amazon Web Services and Microsoft.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

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Bipartisan bill to regulate DeFi, crypto security risks introduced into US Senate

July 19, 2023 Coin Telegraph

ATM

The bill was introduced in the evening and has not been published yet, but it is already causing a stir. Crypto Twitter calls it a “nonstarter.”

United States Sen. Jack Reed sponsored a bipartisan bill introduced into the Senate on July 18 that would tighten Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations and sanctions requirements for decentralized finance (DeFi). According to a news release on Reed’s website, the bill is titled the Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act.

The bill would subject DeFi operations to the same requirements as “other financial companies, including centralized crypto trading platforms, casinos, and even pawn shops.” The bill would make “anyone who controls that project” liable for the use of the DeFi service by sanctioned persons. Furthermore:

“If nobody controls a DeFi service, then — as a backstop — anyone who invests more than $25 million in developing the project will be responsible for these obligations.”

The bill would also “modernize” Treasury Department AML powers by extending them beyond the traditional financial system. According to the statement:

“As new technologies like cryptocurrency increasingly enable new ways to conduct financial transactions, it is critical to extend Treasury’s authority to crack down on illicit financial activity that may occur outside the banking sector.”

The bill also set new requirements for operators of crypto kiosks (or ATMs) to prevent their use in money laundering. Kiosk operators would be required to verify the identities of both counterparties in a transaction.

The bill has not been published at the time of writing. A member of Reed’s staff contacted by Cointelegraph could not say when the bill would be published. A text purporting to be the draft bill has been posted on GitHub.

Case in point:

The definition of "control" is so broadly worded that it's meaningless. No thresholds, no specifics, just "control," as determined by the Secretary of the Treasury. Completely and utterly unworkable.https://t.co/rVk26MJwfA
— Meat (,) (@MeatEsq) July 19, 2023

Crypto Twitter has wasted no time in condemning the bill. One commenter called it “an existential threat to DeFi” and a “nonstarter.” Another said that “imposing control responsibility for a $25mm investment is going to chill VC investment into DeFi b/c passive tokenholding does NOT equal control.”

Sens. Mike Rounds, Mark Warner and Mitt Romney are cosponsors of the bill. Reed and Warner were cosponsors of a bill introduced by Sen. Elizabeth Warren — the Digital Asset Sanctions Compliance Enhancement Act — in March 2022.

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Biden to discuss dangers of AI in San Francisco meeting with experts

June 20, 2023 Coin Telegraph

The U.S. president will meet with AI experts to discuss safety, policy and opportunities while he’s in San Francisco.

United States President Joe Biden will discuss artificial intelligence (AI) with a group of Silicon Valley experts on June 20 between campaign fundraising stops in California.

The president will meet with at least eight experts, including renowned researchers and experts in AI safety. According to the White House, the topic of discussion will be the Biden administration’s “commitment to seizing the opportunities and managing the risks of Artificial Intelligence.”

Per a report from The Associated Press, the attendee list includes Jim Steyer, founder of Common Sense Media; Tristan Harris, co-founder of the Center for Humane Technology; Fei-Fei Li, co-director of Stanford’s Human-Centered AI institute; Joy Buolamwini, founder of the Algorithmic Justice League; and Sal Khan, founder of the Khan Institute.

This group is noteworthy for its individual members’ efforts in education, policy, safety and harm mitigation. Previous meetings with White House officials have included CEOs from some of the largest companies in the global AI sector — including meetings with representatives from Google, Microsoft and Anthropic.

Biden will meet with the experts at 4:00 pm Pacific Standard Time on June 20, during a series of discussions the president is participating in at the Fairmont Hotel in San Francisco. The event will be streamed on the official White House YouTube channel.

The U.S. Senate recently met with OpenAI CEO Sam Altman, IBM chief privacy and trust officer Christina Montgomery and New York University’s Gary Marcus in a hearing to discuss AI policy.

During his testimony, Altman expressed his belief that the U.S. government should establish a federal regulatory body to provide oversight, licensing and accountability for the burgeoning AI sector. While Marcus agreed with the notion, IBM’s Montgomery dissented, stating that it was her company’s view that Congress should take a more surgical approach to AI governance.

The discussions surrounding AI come at a time when the U.S. government has yet to set a comprehensive strategy for legislating AI development and production.

While Europe, China and the United Kingdom have either passed or are currently weighing bills featuring overarching legislation packages for the AI sector, the U.S. still lags behind in both comprehensive cryptocurrency and AI regulations.

Untangling the two sectors is becoming increasingly difficult, as AI now underpins many cryptocurrency, blockchain and Web3 industries.

U.S. Senator Lummis revamps efforts for crypto regulations amid SEC lawsuits

June 11, 2023 Coin Telegraph

Coin Telegraph

The regulatory framework will allow individuals and companies to own and trade digital assets in America.

With the rapid evolution and increasing adoption of cryptocurrencies, the need for regulatory clarity has become paramount. U.S. Senator Cynthia Lummis has said that her efforts to push for a positive regulatory framework are still in motion.

Senator Lummis garnered praise from the crypto community on Twitter as she shared her commitment to developing a regulatory framework that would facilitate digital asset ownership and trading within the United States. Her tweet serves as a reminder of the anticipated bill that was supposed to be released in April.

In collaboration with Senator Kirsten Gillibrand, Senator Lummis has been engaged in a bipartisan initiative to propose extensive regulations for cryptocurrencies. The upcoming legislative effort is anticipated to make significant progress in Congress this year, providing a crucial framework for the rapidly evolving digital asset industry.

We successfully prevented @POTUS' 30% digital asset mining tax from being included in the debt ceiling deal but the fight is far from over.

I am working on a regulatory framework that will allow individuals and companies to own and trade digital assets in America.

Stay tuned...
— Senator Cynthia Lummis (@SenLummis) June 10, 2023

In her tweet, she highlighted the opposition's success in preventing the inclusion of a 30% digital asset mining tax in the recent debt ceiling deal. Senator Lummis emphasized that the battle to establish a transparent regulatory framework for the crypto industry is far from concluded.

The proposed bill aims to achieve several objectives, including providing a clear definition of cryptocurrencies and potentially removing the "security" designation. By establishing a precise classification for tokens, the legislation seeks to create a stable framework for businesses and investors in the crypto industry. This effort will not only address regulatory uncertainties but also stimulate innovation and promote responsible growth within the sector.

Senator Gillibrand has stressed the significance of a meticulous approach. The revised bill will provide explicit guidelines on the procedures necessary to acquire tokens, establishing a comprehensive framework that encompasses various aspects of tokenization.

Additionally, the proposed legislation will supposedly impose a universal ban on algorithmic stablecoins although further deliberations are necessary to determine the entities authorized to issue stablecoins and the requirements associated with maintaining their USD reserves.

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Crypto.com suspends US institutional exchange service

June 9, 2023 Coin Telegraph

Coin Telegraph

The global cryptocurrency exchange cites limited demand for institutional-grade services under current market conditions.

Crypto.com will no longer serve institutional clients in the United States after announcing the suspension of the service from June 21.

The Singapore-based cryptocurrency exchange cited limited demand from institutional customers as a primary reason for the move which has been exacerbated by testing prevailing market conditions.

A statement from Crypto.com noted that the platform’s institutional users were given advance notice of the decision to suspend the service. Crypto.com’s retail mobile application and platform remains fully operational in the U.S.

American retail users still have access to CFTC-regulated cryptocurrency derivatives trading as well as its UpDown Options offering, which allows users to open long or short trading positions on future movements of various cryptocurrencies.

Crypto.com remains open to a potential relaunch of its institutional exchange in the U.S.

While it closes the curtain on its U.S. institutional offering, Crypto.com recently received an official major payment institution (MPI) license for digital payment token (DPT) services by the Monetary Authority of Singapore (MAS), allowing it to offer its services in the country.

June 2023 has proven to be a tumultuous one for cryptocurrency exchanges in America. The Securities and Exchange Commission (SEC) set its sights on Binance.US and Coinbase, starting legal proceedings against both exchanges for a myriad of alleged securities laws violations.

The wider cryptocurrency ecosystem has hit out at the SEC’s actions, as the U.S. regulatory crackdown on the industry seems to tighten some eight months on from the collapse of FTX.

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SEC lawsuit claims Binance.US, Changpeng Zhao put customer funds ‘at significant risk’

June 7, 2023 Coin Telegraph

Binance

One of the latest SEC filings in its lawsuit against Binance claims billions of customer funds are at the “mercy” of Binance CEO Changpeng Zhao.

The United States Securities and Exchange Commission (SEC) has filed another document in its lawsuit against Binance.US, claiming investors’ funds are at risk.

In the filing entered on June 5, the regulators claim that the defendants, including Binance CEO Changpeng “CZ” Zhao, BAM Management, BAM Trading and Binance, “have enriched themselves by billions of U.S. dollars while placing investors’ assets at significant risk.”

It goes on to say that the defendants’ made “purposeful efforts” to bypass U.S. regulatory oversight while providing securities-related services to U.S. users.

“[This] puts the safety of billions of dollars of U.S. investor capital at risk and at Binance’s and Zhao’s mercy.”

A report from CNBC claims that the amount cited by the SEC goes as high as $2.2 billion.

The filing offers an example of billions of U.S. dollars of customer funds from both Binance and Binance.US being “commingled” in an account operated by a “Zhao controlled entity,” which it identified as Merit Peak Limited.

It said funds were then transferred to a third party “apparently in connection” with the purchase and sale of crypto assets.

According to regulators, the arrangement has given and continues to provide Zhao “free reign” over billions in deposited assets on the Binance.US platform, “with no oversight or controls to ensure that the assets are properly secured.”

At the time of writing, Binance.US has said that user funds on the platform “remain safe” amid the SEC’s attempts to freeze assets.

On June 6, the U.S. regulators filed a motion for a restraining order against Binance due to mishandling user funds and operating with unregistered securities. The freezing of assets was one of the requested actions included in the motion.

In its lawsuits against Binance and Coinbase, the regulator labeled at least 67 different cryptocurrencies as securities. This affects more than $100 billion worth of tokens in the market.

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U.S.

The U.S. guards AI and other tech

China responds to tech spat with the U.S.

The EU and U.K. consider the recent restrictions

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