Updates this week:

• EU Parliament sings MiCA into law

• AI lawyer in hot water over using ChatGPT for research

• Money Laundering concerns in Binance

• Chinese Government releases white paper on Web3 innovation

• UNESCO trying to figure out AI in court

EU Parliament signs MiCA into law

This is a big one!! The EU Parliament has officially signed Markets in Crypto Assets (MiCA) bill has been formally signed into law by the EU Parliament. This is the most comprehensive regulatory framework for crypto and digital assets to date, there is a lot to break down here, but one especially interesting part that a lot of countries have been struggling with is tokens and the MiCA has come up with a really interesting structure to manage tokens.

1. Classification of Token in 3 categories
   
   a. Asset-Referenced Tokens (ARTs): These crypto-assets maintain a stable value by referencing the value of several fiat currencies, commodities, other crypto-assets, or a combination thereof.
   
   b. E-Money Tokens (EMTs): EMTs maintain a stable value by referencing a single fiat currency that is legal tender. Unlike ARTs, which use non-cash assets or currency baskets, EMTs closely align with the concept of electronic money.
   
   c. Crypto-assets not Considered ARTs or EMTs: This category encompasses various crypto assets, including utility tokens. Unlike security-type tokens, they do not fall under the securities laws governing financial instruments in many countries.
   
   2. Token Backing:
   
   All tokens must be backed by a legal person or entity within the EU. This ensures accountability, as the person or entity becomes legally responsible for the token. Alternatively, a licensed exchange can fulfil this role.
   
   3. NFTs:
   
   The scope of NFTs are still a little fuzzy, on the face of it, it looks like NFTs are not covered but there is a curious clause which states 'large series and collections' may not be exempt.
   

   The creation of regulatory clarity especially in relation to tokens is sure to make EU an attractive destination for a lot of companies. Only time will tell how this will practically play out and if other countries will follow a similar approach.

NY Lawyer gets into trouble for using AI

A New York lawyer is facing legal consequences after his firm utilized an Al tool, ChatGPT, for legal research. The court discovered that the lawyer's filing referenced nonexistent legal cases, raising concerns about the accuracy of Al-generated content. The lawyer submitted a brief citing previous court cases to support his client's claim against an airline for personal injury. However, the airline's lawyers could not find several referenced cases, which were later revealed to be "bogus."

The Al research was conducted by a colleague of the lawyer, who expressed regret for relying on ChatGPT without verifying its authenticity. The lawyer has vowed to abstain from using Al for legal research in the future without thorough verification. The court has scheduled a hearing on June 8th to address possible disciplinary actions against both lawyers.

Money Laundering concerns in Binance

An investigation conducted by Reuters has uncovered concerns related to money laundering at the popular cryptocurrency exchange Binance. The investigation reveals how Binance's lax approach to user identity verification and transaction monitoring has allowed illicit activities, including money laundering, to occur on its platform.

According to the report, Binance's lack of robust compliance measures has made it attractive to criminals seeking to launder money through cryptocurrency transactions. The investigation details instances where Binance failed to adequately address suspicious transactions and identified cases involving stolen funds, scams, and other fraudulent activities.

The findings raise serious questions about the effectiveness of Binance's internal controls and their ability to prevent illicit financial activities. As one of the world's largest cryptocurrency exchanges, Binance's role in facilitating potentially illegal transactions raises concerns about the broader regulatory oversight of the cryptocurrency industry.

Chinese Govt. releases white paper on Web3 innovation

Beijing has released a white paper outlining its vision for Web3 innovation, marking a significant step towards embracing decentralized technologies. The white paper, published by the city's government, highlights the potential of Web3 technologies such as blockchain, decentralized finance (DeFi), and digital identity solutions.

The document emphasizes Beijing's commitment to fostering a favourable environment for Web3 innovation, promoting collaboration between industry, academia, and government institutions. It outlines plans to establish blockchain-based infrastructure, support research and development efforts, and facilitate the integration of Web3 technologies across various sectors, including finance, healthcare, supply chain, and governance.

UNESCO trying to figure out AI in court

UNESCO (United Nations Educational, Scientific and Cultural Organization) recently held discussions on how to address the challenges posed by artificial intelligence (AI) in court cases. The discussions aimed to explore strategies and guidelines for ensuring fairness, transparency, and accountability when AI technologies are used in legal proceedings.

The discussions revolved around key topics such as data protection, human oversight, algorithmic transparency, and the role of AI in decision-making processes. Participants explored potential solutions and best practices to strike a balance between leveraging the benefits of AI and upholding fundamental principles of justice.

UNESCO's efforts in addressing the challenges of AI in court cases reflect the growing recognition of the importance of ethics and human rights in the development and deployment of AI technologies. The organization aims to provide guidance and support to governments, legal professionals, and other stakeholders in navigating the complexities associated with AI in the justice system.

The discussions serve as a crucial step towards fostering a responsible and inclusive approach to integrating AI in court proceedings, ultimately ensuring the protection of rights and maintaining public trust in the justice system.

Weekly Explainer

Zero Knowledge Proofs

Zero-knowledge proofs are cryptographic techniques that allow someone to prove knowledge of a fact without revealing the actual information.

For Example-

Imagine a person wants to prove they know the password to a locked door without disclosing the password itself. In a zero-knowledge proof, they could demonstrate their knowledge by opening the door without revealing the specific combination or code used. This ensures privacy and security.

Zero-knowledge proofs rely on complex mathematical algorithms to ensure the validity of the proof while maintaining privacy. It is used in various applications, like verifying transactions in cryptocurrencies, proving ownership of digital assets, or confirming identities without revealing personal information.

To learn more about such concepts, visit

Article in Spotlight

In the world of NFTs, volatility reigns supreme, even the most promising projects can crumble instantly, yes, I'm at you @GutterCatGang and @doodles, but from this chaos, Pudgy Penguins (PP) emerges as a breath of fresh air. Join us as we break down their success.

Recently PP raised $ 9 million led by @1kxnetwork, that's a lot for the market we are in, so why would they? The answer is all related to IP, but first a little history.

1. The Triumph of Resilience

PP captured the hearts of countless enthusiasts with their irresistibly cute penguins (seriously, just look at them!).

However, their initial rise was marred by turmoil, with accusations levied against the original founders, including @Colethereum.

Everything reached a boiling point when a renowned PP hodler, @9x9x9eth, took to CT. The original owners stood accused of draining the treasury, and the furious community rightfully demanded change.

This became a rallying cry, spurring the community to explore options for rescuing their beloved penguins. Finally, in Apr 22, @LucaNetz, paid a cool 750 ETH (~ $250 Million at that time) for it. From then PP has witnessed an extraordinary revival.

2. Luca wasted no time harnessing the most valuable asset of PP

— their IP. The new team swiftly sought ways to onboard new users, fueled by an audacious vision.

They licensed 16 SKUs inspired by Pudgy Penguin NFTs from the original collection and transformed them into delightful plush toys. These toys shattered records on Amazon, with mind-boggling sales on their very first day.

3. Next Steps and Takeaways

It doesn’t end here though, they aspire to collaborate with animation studios, gaming companies, and other toy manufacturers, constantly seeking innovative ways to leverage their IP. Entrepreneurs and NFT enthusiasts take note— this is it, this is the play, it was here all along. The power of community and IP go hand in hand and PP is the perfect example of it.

Crypto Chronicles- Stories from the wild world of digital assets

In a stunning turn of events on Twitter, someone boldly shared their Ethereum wallet address and asked for money. Despite initial skepticism, within just 24 hours, this individual managed to raise an astounding one million dollars. Surprisingly, instead of expressing gratitude, the person continued to request more funds with a brazen message: "YouGetNothing."

This extraordinary occurrence showcases the captivating and unpredictable nature of cryptocurrencies. It challenges our understanding of logic, reason, and even the laws of the universe.

Thank you for reading!

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Disclaimer: None of this constitutes legal advice, if you have a specific query please feel free to reach out to us.