FTX EU opens withdrawal, Elon Musk calls for AI halt, and Binance news: Hodler’s Digest, March 26–April 1

Top Stories This Week

FTX EU launches withdrawal website to pay back European users

The European arm of FTX has launched a website to allow customers in Europe to submit withdrawal requests. It comes nearly five months after the global trading platform collapsed and went bankrupt in early November. Meanwhile, in the United States, lawyers for former CEO Sam Bankman-Fried have entered a not-guilty plea for five additional charges, including accusations of bribery in China. On bail since being turned over to U.S. custody from the Bahamas, Bankman-Fried is now prohibited from using any smartphone with internet access as part of a new court agreement.

Tesla CEO Elon Musk and Apple co-founder Steve Wozniak were signatories on an open letter signed by more than 2,600 tech industry leaders and researchers calling for a temporary halt on any further artificial intelligence (AI) development. The petition shared concerns that AI with human-competitive intelligence can pose serious hazards to society and mankind. It urged all AI firms to “immediately cease” developing AI systems that are more potent than GPT-4 for at least six months. Although supported by many, the petition has divided the larger tech community over the halt of developments.

Binance and CZ sued by CFTC over US regulatory violations

A lawsuit has been filed by the U.S. Commodity Futures Trading Commission against Binance and its CEO, Changpeng “CZ” Zhao. Claims against the crypto exchange include failing to register with regulators, noncompliant trading, obscuring the location of its executive offices, and performing transactions for persons in the United States since 2019, despite a policy of blocking or restricting customers in the country. Binance’s CEO has rejected the allegations, arguing that the crypto exchange “does not trade for profit or ‘manipulate’ the market under any circumstances,” but primarily to cover expenses in fiat or other cryptocurrencies using its crypto revenue.

US and South Korea requested extradition of Terra co-founder Do Kwon

Authorities from both the United States and South Korea have made efforts to have Terra co-founder Do Kwon extradited following his arrest in Montenegro. According to Montenegrin Justice Minister Marko Kovač, decisions regarding Kwon’s custody will go to Montenegro’s high court and will rely on a number of factors, including the severity, location and time of his alleged criminal offenses. During his custody in Montenegro, Kwon may face harsh conditions in the country’s penal system since jail conditions haven’t changed from those described in a 2020 human rights report by the U.S. State Department.

‘Withdrawals are coming!’ — Ethereum devs confirm epoch for Shapella fork

Ethereum core developers shared more details on the highly anticipated Shapella hard fork, which will allow validators to withdraw staked Ether from Beacon Chain. Shapella will take effect at epoch 194,048, which is scheduled for 10:27 pm UTC on April 12. Withdrawals will be enabled by Ethereum Improvement Proposal (EIP) 4895 by “pushing” staked Ether from the Beacon Chain to the execution layer. There are 17.81 million Ether staked on the Beacon Chain, with several mechanisms set to ensure a flood of Ether doesn’t disrupt the market.

Winners and Losers

Most Memorable Quotations

“When I think about AI, it shocks me that we’re talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government’s got it completely upside-down.”

Mike Novogratz, CEO of Galaxy Digital

“I believe that NFTs can contribute to preserving Indonesia’s cultural heritage while enhancing virtual tourism.”

Muhammad Neil El Himam, deputy chairman at the Ministry of Tourism and Creative Economy of Indonesia

“Advanced AI could represent a profound change in the history of life on Earth, and should be planned for and managed with commensurate care and resources.”

Future of Life Institute

“As recent global financial events continue to unfold, many may also re-evaluate their dependence on traditional financial institutions […] and turn to alternative assets such as Bitcoin.”

Lasanka Perera, CEO of Independent Reserve Singapore

“[DeFi] KYC is about transparency and accountability. I don’t think it’s an issue for a majority of people. I’m sure 99% of people don’t have things to hide.”

Dyma Budorin, CEO of Hacken

“Don’t ever let fear stop progress, and be wary of anyone trying to capture control in some central authority.”

Brian Armstrong, CEO of Coinbase

Prediction of the Week 

Bitcoin price hits $28.5K on PCE data as macro ‘accumulation zone’ ends

Bitcoin recovered recent losses following encouraging macroeconomic data from the United States, with the February Personal Consumption Expenditures (PCE) Index modestly beating expectations in some areas — a sign of progress against inflation.

Moving to higher timeframes, optimism was no less in evidence among traders. Caleb Franzen, senior market analyst at Cubic Analytics, wrote on Twitter:

“Bitcoin’s 24-month Williams%R Oscillator is set to close above the ‘oversold’ threshold for March, which has marked an end to prior bear markets. Bullish long-term probabilities are improving, so long as we stay above the lower-bound.”

FUD of the Week 

Italy blocks ChatGPT, investigates suspected violations

Italy’s watchdog in charge of protecting data has announced that it’s temporarily blocking the artificial intelligence chatbot ChatGPT and is opening an investigation over suspected breaches of data privacy rules, including a recent data breach that the AI platform suffered on March 20. The Italian agency highlighted several issues for the decision, such as the lack of information for users on OpenAI data collection and the absence of an age verification feature within the application to avoid minors. The agency further noted that the information provided by the AI chatbot is not always accurate and that inaccurate handling of personal data may occur.

Mysterious entity may be collecting BTC users’ IP addresses — Bitcoin developer

An unknown person or group may be collecting IP addresses of Bitcoin users and linking them to their BTC addresses, compromising their privacy, according to pseudonymous Bitcoin app developer 0xB10C. The entity has been active since March 2018, and its IP addresses have shown up on several public posts from Bitcoin node operators over the past several years. In an interview with Cointelegraph, 0xB10C stated that the vulnerability doesn’t just affect users who run their own nodes. Even users who rely on a third-party server through a wallet like Electrum or Mycelium can still be victims.

Jake Paul-endorsed SafeMoon gets hacked after introducing a bug in upgrade

SafeMoon, a project previously endorsed by celebrities and social influencers, such as Jake Paul and Soulja Boy, announced its liquidity pool (LP) had been compromised. Blockchain investigator PeckShield narrowed the problem to a recent public burn function introduced in the latest upgrade that allegedly allows users to burn tokens from other addresses. The attacker used the vulnerability to remove SafeMoon tokens, causing an artificial spike in the token’s price.

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