April 15, 2023
Issue No. 50
Welcome to this week's AtherXplorer, covering the latest in gaming, blockchain, and everything in between.
This week’s top picks include:
- AI & Blockchain: Adobe’s AI-Powered Video Editing; Ethereum Shanghai Upgrade Now Live
- Gaming: Final Fantasy XVI: Clash with the Eikons; Com2us USA President on the Current & Future State of Blockchain Games
- Web3 & Metaverse: Roblox Limiteds — Sell Scarce Digital Items; Razer’s Web3 Incubator
- NFTs: Azuki x Line Friends Collaboration; Adidas ALTS Dynamic NFTs
- Legal Landscape: Italy’s ChatGPT Ban Could Trigger a Wave of AI Regulation
AI, Blockchain, and DeFi Developments
Adobe Launches AI-Powered Text-Based Video Editing
Adobe announced updates to its video applications, including an AI-powered text-based video editing feature in Premiere Pro. Adobe premiered the updates ahead of the NAB Show 2023 in Las Vegas. The new Premiere Pro version introduces automated tone-mapping capabilities, as well as dozens of under-the-hood improvements addressing top user requests. Adobe also announced improvements to After Effects, the most popular motion design software for video professionals. The new version includes a context-sensitive Properties Panel and community-requested enhancements. Adobe’s new innovations are designed to address the workflow needs of today’s professional editors and motion designers by automating time-intensive tasks. Adobe is also expanding Frame.io’s video collaboration platform to photography and PDF documents.
Adobe’s latest innovations are poised to help today's creatives meet the growing demand for standout video content across platforms and surfaces. The demand for content has doubled over the past two years, and it is expected to grow by five times over the next two years. Video creators need tools to deliver high-quality content faster than ever before.
Leveraging Adobe Sensei, Adobe’s machine learning and AI framework, Premiere Pro and After Effects streamline video workflows and offer AI-powered editing that saves production teams precious hours and significantly reduces costs. Text-based editing is a groundbreaking shift in post-production workflows. Premiere Pro is the only professional editing software that incorporates text-based editing, which Adobe says revolutionizes the way creators approach their craft by making video editing as simple as copying and pasting text.
Powered by Adobe Sensei, text-based editing automatically analyzes and transcribes clips so editors, producers, and assistants can simply copy and paste sentences into any order they want and instantly see them appear on the timeline. Transcripts can be searched in the transcript window to identify exact words and phrases.
Uniswap Wallet Goes Live on iOS After Apple App Store Challenges
Uniswap Labs has announced that the Uniswap Wallet iOS app is now live for users in the United States and other select countries. The app is available for download through Apple’s App Store. Uniswap Wallet allows users to trade crypto assets on Ethereum’s mainnet, as well as on Polygon, Arbitrum, and Optimism. In addition to trading, the app also enables users to buy crypto, explore different cryptocurrencies, see NFT details (but not trade them), and select “favorite” tokens and wallet addresses.
Last month, Uniswap launched the wallet to 10,000 early-access users through Apple’s testing platform, Apple TestFlight. In March, Uniswap stated that it did not know why Apple had refused to greenlight the app's launch on the Apple Store.
According to Uniswap, Apple has approved the wallet for use in several countries throughout the world. The company has stated that it will continue to launch in other countries as soon as Apple approves. However, it is still unclear whether Apple will approve the Uniswap Wallet app for use in other regions and, if so, when.
Uniswap is the crypto firm behind the DeFi trading platform Uniswap. Uniswap has been making strides in the DeFi space, having recently surpassed Coinbase Pro in trading volume. The Uniswap decentralized exchange has been gaining traction in the NFT space, with some NFTs selling for millions of dollars on the platform.
Ethereum Shanghai Upgrade Goes Live
Ethereum's Shanghai upgrade has finally been implemented, allowing users to withdraw staked ETH, and completing the network's long-awaited transition to proof-of-stake. Since 2020, ETH staking participants have deposited over $34.56 billion worth of ETH with the network for validation of on-chain transactions and were rewarded with newly generated ETH. However, those funds and rewards were not accessible to users until now, with the implementation of the Shanghai upgrade. Ethereum's core developers made multiple concessions to expedite the upgrade's release, including the removal of numerous other improvements to the Ethereum network that were originally meant to be included in the upgrade, such as proto-danksharding and EOF, to ensure that ETH withdrawals were rolled out as quickly as possible.
The security and accessibility of tens of billions of dollars worth of cryptocurrency were on the line, which made the pressure to release Shanghai understandable. Any flaws in the upgrade's execution could have caused significant issues for the network, not just from upset users, but also from massive intermediaries. However, with the successful implementation of the upgrade, those immediate concerns are now in the rearview mirror. The Ethereum network continued processing transactions during the epoch, and staked ETH withdrawals began processing smoothly immediately after the epoch.
Stakers who directly deposited at least 32 ETH with Ethereum can now withdraw their profits or their entire deposit. The process may take several days due to demand and limited block space. Stakers who deposited ETH through intermediary staking pools or centralized crypto exchanges will have to wait longer. Lido has said that it will introduce staked ETH withdrawal capability for its customers in about a month, and Coinbase has stated that its customers may have to wait several months before their staked ETH is accessible. Each intermediary ETH staking service will have its own timeframe for unrolling withdrawals.
Gaming Updates and Insights
Mobile Gaming Dominates: 92% of Gamers Play on Mobile Devices, According to Report
A report by DFC Intelligence shows that while 3.7 billion people worldwide are gamers, only 300 million of those players game on console or PC, with the remaining 3.4 billion, or 92%, doing so on mobile devices. The data shows a stark divide between different markets, with the so-called “core audience” of consumers heavily weighted towards North America and Europe. Mobile’s strength as a platform lies in its accessibility and penetration, as mobile phones are relatively affordable, while an increase in internet penetration worldwide has made them the preferred platform for the majority of gamers worldwide.
While console and PC gaming enjoy a sizable, and growing, market share, this growth is far outpaced by the continued strength of mobile gaming, and this gap is likely to continue as market penetration increases. The report highlights that getting mobile-only consumers to upgrade to a larger screen is a major opportunity, but it will not be easy, and most companies in the game space are smart to narrow their focus to core consumers. Nevertheless, there is definitely an opportunity to expand the video game hardware business.
According to the report, over the next decade, there is likely to be a significant change in the hardware used to play games as more devices look to reach a broader audience. This could be through the growth of cloud game handheld platforms that are starting to flood the market, but it is more likely to be through a hybrid ecosystem that allows for multiple styles of gameplay. The report suggests that gaming companies should explore ways to create a hybrid ecosystem that combines mobile devices with more powerful hardware platforms to appeal to a wider range of consumers.
Final Fantasy XVI: Clash with the Eikons!
The State of Play presentation, which occurred on April 14th and was hosted by Naoki Yoshida, producer of FINAL FANTASY XVI, provided information on the story, showcased beautiful world environments, and demonstrated fast-paced hack-and-slash gameplay! FINAL FANTASY XVI is an action role-playing game that combines real-time action and RPG features. The player embarks on an adventure as Clive Rosfield, exploring the world of Valisthea to defeat Eikons (massive primal giants) and enemies while building relationships with companions who will aid him in his journey.
Ability points in FFXVI are obtained by defeating enemies and can be used to unlock more abilities or upgrade existing ones. The abilities have unique characteristics depending on the Eikon from which they are derived. For example, we can see from the clip how Clive uses Shiva's Frost Ability to freeze the enemy in place and immediately follows up with Ifrit's fire ability to close the gap and finish off his opponent. Players can look forward to creating stylish combos while figuring out the best sequence of moves to defeat enemies as quickly as possible.
To make combat more interesting, some of the companions that players meet will accompany Clive on his adventure and fight alongside him! Players are not required to control these companions as they are fully AI-driven and will constantly adapt and respond according to the player's actions. However, Clive's loyal pet hound Torgal brings in another mechanic. Similar to how players can give commands to Atreus in God of War, Torgal can also be given direct commands to assist Clive and create new combo chains.
For Difficulty, FFXVI introduces a slightly different system. The game includes "timely accessories" to provide support to players who may not be skilled at action games, making the game enjoyable for players of all levels. For players who want to compete in a harder difficulty and unlock higher scores, they simply need to ensure that such accessories are unequipped before the battle. Players can equip Clive with different combinations of accessories to find the one that matches their playstyle.
Last but not least, the video also showcases real-time action Eikon battles! These battles take the player out of the traditional RPG combat loop and set the player in a completely different instance to deliver a refreshing gameplay and cinematic experience. For now, the game is already looking like a top contender for Game of the Year 2023, and the wait is almost over as the game releases on PS5 on June 22nd!
Com2us USA President Talks About the Current State and Future of Blockchain Games
Com2uS, the mobile game developer, remains bullish about blockchain gaming despite a string of controversies and investor cooling in the space, according to President Kyu Lee. In an interview with PocketGamer.biz, Lee said Com2us released most of the 10 blockchain games it had proposed last year and had learned lessons from them. These included the fact that "people who come in to ‘play to earn’ are really just coming in for the token, they’re not converting to gamers," he said.
Lee added that Com2us had reinstituted its web2 to web3 approach, focusing on the gamers rather than the blockchain. While its games had blockchain elements, they only emerged deep into play and uptake had been small, he said. Nonetheless, Com2us was continuing to release new games every month with blockchain features, Lee added.
Summoners War: Chronicles, Com2us' latest flagship release, included blockchain elements, but players were not engaging with the play-to-earn aspects, Lee said. The game had been a global success generating more than $10m in revenue and achieving more than a million downloads daily. Lee said mobile games could now compete with PC games and Com2us would be releasing all its future mobile games on PC too.
In addition, Com2us would continue to tweak and tinker with web3 implementation, Lee said. "There’s going to be more experimenting," he said. "The free-to-play industry also happened like this, with many iterations. We’re still trying to find the right way to build a sustainable and healthy economy."
Web3 & Metaverse News
Gaming Hardware Giant Razer Launches Web3 Incubator
Gaming peripheral company Razer has launched zVentures Web3 Incubator (ZW3I) in a bid to support Web3 gaming projects and help bring them to a mainstream audience. The company will select developers with a good track record in creating successful games for its incubator program. Razer's Director of Blockchain Lawrence Lin says the incubator will focus on marketing support, will incubate up to 36 projects, and will not exclude mobile games despite the company's focus on PC gaming. According to Lin, first-generation Web3 games failed to reach mainstream audiences because they prioritized blockchain technology over creating an engaging and entertaining gameplay experience. Lin says the foundation of any successful game, whether Web2 or Web3, is immersive and engaging gameplay.
Razer's push into Web3 matters because the company has significant brand recognition among mainstream gamers, which gives it the potential to shape the future of Web3 gaming by exposing titles and developers to Razer's audience of roughly 200 million gamers. Lawrence Lin said in a statement that "the gaming experience is the most important aspect of any successful game launch. With blockchain technologies and support from companies with strong gaming knowledge, we are certain that Web3 will revolutionize this experience for all."
Many in the Web3 gaming industry believe that the next generation of Web3 games will be better able to reach traditional gamers by emphasizing compelling gameplay and satisfying social experiences over token rewards. Razer aims to help with this. Some developers have argued that early crypto games put too much focus on financials and not enough on appealing graphics or rich gameplay. The company believes that more work needs to be done to explore and better understand gamers' motivations and behaviors in order to move forward.
Razer's zVentures Web3 Incubator (ZW3I) will most likely help accelerate the development of Web3 games that prioritize gameplay over financials. The company's investments could help shift the focus of the Web3 gaming industry away from the "play-to-earn" and "GameFi" models that have drawn skepticism from some players, and towards more traditional gaming experiences that prioritize fun and social interaction. By incubating 36 projects, Razer can help a diverse range of developers bring their visions to life and help create a more engaging and immersive Web3 gaming experience.
Razer's launch of zVentures Web3 Incubator (ZW3I) follows the company's push into blockchain and cryptocurrency. Last year, Razer announced plans to launch its own Razer Card, a prepaid card that rewards users with Razer Silver, the company's rewards program. Razer also launched a cryptocurrency mining platform in 2018, which allowed gamers to mine cryptocurrency using their idle graphics processing unit (GPU) power. The company's focus on Web3 gaming is the latest in a series of moves that show its commitment to blockchain technology and its potential to revolutionize the gaming industry.
Roblox Limiteds — Creators can Sell Scarce Digital Items
Roblox is now allowing creators to sell digital in-game items that are only available in limited quantities. These user-made limited items, called "Limiteds," are not blockchain-based and are available exclusively for purchase with in-game currency Robux, which is purchased with real money. Creators must apply to sell Limiteds and pay an upfront cost, which is calculated differently from the normal item upfront fee, before listing a limited-availability item. When users resell these limited items, the original creator will receive a 10% cut of every sale. The idea of limited-availability digital gear isn't unique to Roblox. Fortnite adds new in-game outfits to its store that are only available for a limited time. However, there are an unlimited number of those outfits for purchase, and in Roblox's case, creators are the ones making that gear and introducing it to the in-game economy. And since Roblox takes a cut of every sale, the more of these scarce digital goods people buy, the more money the platform makes.
Limiteds are not blockchain-based in any way. They are Roblox-exclusive items that are only available for purchase with in-game currency Robux. The items can be resold by users, and when that happens, the original creator will get a 10% cut of every sale. Checking Roblox's Avatar Shop, users can see that some creators have already posted Limiteds since the program was announced last week. Any new influx of limited Roblox items could be enticing for the many young players on the platform, and they could encourage dangerous overspending if a parent hasn't set monthly spending limits. These aren't the first limited-time items in the store. Roblox has sold Roblox-made limited-time items in the past, and if users sort by "Limited" in the Roblox store, they'll see many listed by resellers for hundreds of thousands or even millions of Robux.
The entire premise of a scarce digital Roblox good feels like it's straying into the realm of NFTs. However, Limiteds are not blockchain-based in any way. They're Roblox-exclusive items that can only be purchased with the in-game Robux currency, which is bought with real money. Roblox also requires that creators apply to sell Limiteds and pay an upfront cost before listing a limited-availability item. This could prevent creators from flooding the market with junk just to try and earn a quick buck.
Roblox is taking a cut of every sale from the reselling of Limiteds. The more of these scarce digital goods people buy, the more money the platform makes. Fortnite adds new in-game outfits to its store that are only available for a limited time, but there are an unlimited number of those outfits for purchase. In Roblox's case, creators are the ones making that gear and introducing it to the in-game economy.
LimeWire Launches Nostalgic Music Downloading Game With Crypto Rewards
LimeWire has launched a simple yet nostalgic music-downloading game. The game simulates the old Windows operating system with the LimeWire software running. Players must enter their email in order to play. The browser-based game involves pretending to “search” for old music and movies to “download.” Players can search for any musician, song, or movie that was popular in the early 2000s, and most results will show up. Then, players must pick which items to “download.” Each download that doesn’t contain a “virus,” regardless of type, will reward the player with 10 points. The LimeWire simulation continues until either the clock runs out or the user stumbles upon a “virus.” It’s worth noting that the files are not real nor are they actually downloaded, so users can’t play or access the content they collected in-game.
All scores are entered onto the leaderboard, and the players with the highest scores are being promised crypto rewards in the form of LimeWire’s upcoming ERC-20 token, LMWR, which is slated for release next month. The top 1,000 players will receive a total of 150,000 LMWR distributed hierarchically among them, as well as “merch packages,” according to the company. The game will be available to play until May 15th.
LimeWire Co-CEO Julian Zehetmayr said in an email to Decrypt that the company's approach in tapping into nostalgia to promote the new LimeWire was a conscious decision to acknowledge and celebrate the company's roots. "By meticulously designing a game that captures the spirit of that era, we've successfully recreated the early 2000s in a captivating and enjoyable way," he added. "The nostalgic connection not only resonates with those who are familiar with LimeWire in its early days but also introduces the younger generation to the rich history of LimeWire as we venture into the Web3 landscape."
In 2023, LimeWire is now a creator membership platform and NFT marketplace, where artists can paywall exclusive content for fans, similar to Patreon. On the new LimeWire, creators can sell every piece of content they upload as an NFT and earn royalties on secondary sales. Since its launch last year, LimeWire's marketplace has seen $1 million in total volume traded, with a waitlist of 3 million users and 20,000 creators.
The LimeWire Game is a fun and simple game that capitalizes on early 2000s nostalgia and recreates the now-defunct LimeWire torrenting experience, which could feel like a game of Russian roulette for your computer. The game's success is likely due to the nostalgia factor, which has been a common theme in Web3 in recent times, with companies like Board Ape Yacht Club and Gutter Cat Gang thriving on the allure of early internet aesthetics. Whether LimeWire's upcoming token and NFT marketplace will see similar success remains to be seen, but the success of the LimeWire Game bodes well for the company's future in the Web3 landscape.
Inside the NFT Space
Azuki x Line Friends Collaboration
Chiru Labs, the company behind Azuki NFT, and IPX, the parent company of the popular character collection Line Friends, have announced they will collaborate on content, merchandise, retail distribution, real-life activations, and immersive metaverse experiences. The partnership will initially focus on the Beanz NFTs and Line Friends characters. IPX has partnered with companies such as Starbucks, Netflix, McDonald's, and the K-Pop band BTS. To celebrate the partnership, an animation of some of the NFT characters will be displayed on a billboard above the Line Friends store in New York's Times Square during NFT.NYC this week.
Chiru Labs is best known for its anime-inspired NFT collection Azuki, which has netted 470,994 ETH (roughly $887,824,000 as of writing) in trading volume since its launch in January 2022, according to OpenSea. The company also pioneered "Physical Backed Tokens" (PBT) as part of a sale of eight NFT-backed golden skateboards which raised $2.5 million.
"We are excited to collaborate with IPX, which is a global leader in building innovative character IP brands beloved by millions of fans around the world," Zagabond, the pseudonymous founder and CEO of Chiru Labs, said in a press release. "IP is evolving, and we see the web3 community as an integral part of this next wave."
"We plan to complement Chiru Labs’ IP with our multi-faceted character IP business strategy," Logan Cho, the head of the metaverse business at IPX, said in the press release. "We are eager to unveil an expanded IP business that encompasses Web3, offering collaborative opportunities for both NFT holders and character IP enthusiasts alike."
Gojira Labs Introduces Animatronic NFTs, Turning Static NFTs into Playable Game Characters
Gojira Labs has announced a new type of non-fungible token (NFT) called Animatronic NFTs (aNFTs), which are intended to disrupt the market for Web3 games. The new format adds the ability to animate NFT collections like profile pictures. Rather than bringing NFTs to games, Gojira aims to bring games to NFTs. The aNFTs are a new format of digital collectible built for gaming. Gojira will release the first aNFT-compatible game, Sprinft, a multichain, multiplayer running game for holders of supported NFT collections to compete against each other.
The company hopes that its aNFTs will bring utility and entertainment to existing NFT collections, which have large community bases. The arms and legs of the characters become animated, and the character comes to life, with moving eyeballs and more. It’s a new concept for NFTs, though others like Mystic Moose are creating 3D avatars from NFTs. The team will consider 3D. Soares thinks of aNFTs as a new format for digital collectibles that allows static NFTs to become playable, interactive characters. This format, which provides all the artwork components necessary to animate a full-body in-game character, was created to unlock instant playability for PFP NFT collections.
Lots of Web3 enthusiasts have paid a lot of money for NFTs for games, with characters like the Bored Apes, DeGods, CryptoPunks, and more. The players own the rights to the characters they have purchased, and so the big appeal of owning them is that they could be used across games. By animating the 2D static characters so that they can become full-bodied 2D characters, Gojira is adding new utility to the NFTs by enabling them to be used in more games.
The aNFT format provides an exploded view of full-body characters that can then be easily animated. The artwork components are designed to map onto game animation rigs so they can be seamlessly deployed as playable characters. Initially, aNFTs will be compatible with Gojira Labs’ proprietary flexible animation rig, codenamed ‘Gooji.’
The company started discussing the idea of an animatronic NFT that can apply to many different games about seven months ago. To demonstrate the potential of aNFTs, Gojira Labs is also launching a beta version of Sprinft, a multichain, multiplayer running game that will be the first to make use of this new format. The initial release of the game will provide a simulation of the aNFT experience, allowing holders of specific PFP collections to unlock a character to play.
Adidas Releases Chapter 1 of Its ALTS Dynamic NFT Collection
Global sneaker and lifestyle brand Adidas has expanded its non-fungible token (NFT) ecosystem with the release of the ALTS by Adidas collection. The new stage in Adidas' Web3 journey involves a dynamic NFT with eight different "ALT[er] egos" that correspond to different rarity traits and interactive storylines. Holders of NFTs from the first two phases of the Into The Metaverse collection can now burn their NFTs to receive a new NFT from the Ethereum-based ALTS by Adidas collection, paying only for gas fees.
Adidas first released its Into The Metaverse collection in December 2021, promising holders of the NFTs "exclusive access to collaborative merchandise and virtual land experiences throughout 2022." Its first Web3 exploration, a collaboration with NFT influencer gmoney, PUNKS Comic, and Bored Ape Yacht Club, allowed holders to burn their NFTs to receive a new ERC-1155 token from the next phase of the project and claim physical clothing items.
The new collection will offer various utilities for holders, including a stake in the ALTS by Adidas ecosystem, some commercial intellectual property (IP) rights to their character, access to exclusive virtual wearables, entry to holder-only community gatherings, and token-gated Discord channels, among others. Furthermore, Adidas has announced that ALTS will be an integral part of its future collaborations with partners and influencers, hinting at possible use cases for the collection beyond the current features.
The ALTS collection has been developed in collaboration with blockchain innovator Dapper Labs, the creator of the popular NBA Top Shot NFT platform. The platform's experience with developing dynamic NFTs and creating value from digital assets with its Flow blockchain will likely be crucial to the success of the ALTS by Adidas collection.
Legal Landscape, Policies, and Regulation
Stablecoins Need to Be Regulated Like Commercial Bank Money, Bank of England's Andrew Bailey Says
In a recent speech at the Institute of International Finance, the Bank of England (BoE) Governor Andrew Bailey stated that stablecoins, digital currencies pegged to the value of other assets like fiat currencies, "purport" to be money but do not have an assured value. Bailey argued that stablecoins would need to be regulated like commercial bank money and have the characteristics of, and be regulated as, inside money. This would mean that stablecoins would need to function as money and have the same regulatory requirements as other money issued by private entities like commercial banks.
Bailey's comments come as the UK government is consulting on new rules for crypto broadly, and the country is looking to regulate stablecoins as payment under the new Financial Services and Markets Bill being debated in Parliament. The Bank of England is also planning to monitor stablecoins that can influence the broader financial system. The collapse of Terra's algorithmic stablecoin terraUSD (UST) last year wiped out billions of dollars from the crypto market and prompted regulators to question the stability of stablecoins.
Bailey also warned investors to be cautious of cryptocurrency, calling it a "bet, a highly speculative investment or a collectible" that had "no intrinsic value." He urged investors to be aware of the risks of unbacked crypto, which could "blow up in fairly small pockets of that world" but had the ability to spread in ways that were initially unpredictable.
When it comes to digital money, regulators cannot rule out a central bank digital currency, according to Bailey. The UK is now exploring the issuance of a digital pound that could "anchor the value of all forms of money, including new digital ones and to ensure the maximum opportunity for innovation in payments services," according to the central banker.
Bailey's comments reflect a growing trend towards digital currencies and stablecoins, which are becoming more popular as a means of payment and investment. However, regulators have been cautious about these digital assets, warning of the risks they pose to financial stability and the need for appropriate regulation.
First of Many? How Italy’s ChatGPT Ban Could Trigger a Wave of AI Regulation
Italy has become the first Western country to ban an artificial intelligence (AI)-powered chatbot, ChatGPT, citing concerns about a data breach that exposed user conversations and payment information, the lack of transparency, and the legal basis for collecting and using personal data to train the chatbot. The Italian Data Protection Authority (IDPA) ordered OpenAI, the United States-based company behind ChatGPT, to stop processing Italian users’ data until it complies with the General Data Protection Regulation (GDPR), the European Union’s user privacy law. Italy’s move was widely criticized, with its Deputy Prime Minister Matteo Salvini saying it was “disproportionate” and hypocritical, as dozens of AI-based services like Bing’s chat are still operating in the country. Salvini said the ban could harm national business and innovation, arguing that every technological revolution brings “great changes, risks, and opportunities.”
While Italy’s outright ChatGPT ban was widely criticized on social media channels, some experts argued that the ban might be justified. Addressing broader AI privacy challenges, such as data handling and transparency, could “be more effective than focusing on a single AI system.” The move, he argued, puts Italy and its citizens “at a deficit in the AI arms race,” which is something “that the U.S. is currently struggling with as well.”
Vincent Peters, a Starlink alumnus and founder of nonfungible tokens project Inheritance Art, said that the ban was justified, pointing out that GDPR is a “comprehensive set of regulations in place to help protect consumer data and personally identifiable information.” Peters, who led Starlink’s GDPR compliance effort as it rolled out across the continent, commented that European countries who adhere to the privacy law take it seriously, meaning that OpenAI must be able to articulate or demonstrate how personal information is and isn’t being used. Nevertheless, he agreed with Salvini, stating: “Just as ChatGPT should not be singled out, it should also not be excluded from having to address the privacy issues that almost every online service needs to address.”
Nicu Sebe, head of AI at artificial intelligence firm Humans.ai and a machine learning professor at the University of Trento in Italy, told Cointelegraph that there’s always a race between the development of technology and its correlated ethical and privacy aspects. Sebe said the race isn’t always synchronized, and in this case, technology is in the lead, although he believes the ethics and privacy aspects will soon catch up. For now, the ban was “understandable” so that “OpenAI can adjust to the local regulations regarding data management and privacy.”
Other governments are developing their own rules for AI as the world approaches artificial general intelligence, a term used to describe an AI that can perform any intellectual task. The United Kingdom has announced plans for regulating AI, while the EU is seemingly taking a cautious stance through the Artificial Intelligence Act, which heavily restricts the use of AI in several critical areas like medical devices and autonomous vehicles.
Hong Kong Regulator Says DeFi Projects Could Face Regulatory Requirements
Decentralized finance (DeFi) projects could be subject to licensing requirements and regulation, a Hong Kong regulator said on Wednesday. Keith Choy, interim head of intermediaries at Hong Kong’s Securities and Futures Commission (SFC), said that as long as DeFi activity falls within the scope of the Securities and Futures Ordinance (SFO) it will be subject to the same regulatory requirements as traditional financial activity. Choy made the comments during a speech at the Web3 Festival in Hong Kong.
The U.S. and France also published reports on DeFi regulation recently. The SFC had previously highlighted DeFi as an area in need of regulation but had not laid out its stance. "Providing automated trading services is a regulated activity under the SFO," Choy said. "If a decentralized platform allows trading in virtual assets, which constitutes securities or futures as defined under the SFO, the platform and operators are required to have a Type 7 license," he added. Offering a collective investment scheme to the public in Hong Kong is subject to authorization requirements, Choy noted.
DeFi presents regulators with issues of financial stability and limited transparency due to a lack of data and unregulated firms and activities, Choy said, while also highlighting market integrity issues such as price oracle manipulation, front-running transactions and investor protection concerns. The SFC issued a statement in December 2022 warning investors of the risks associated with virtual asset platforms.
Hong Kong's new licensing regime for virtual asset trading platforms takes effect in June 2023, though there is a grandfathering period.
Zambia to Wrap Crypto Regulation Tests by June: Report
Felix Mutati, Zambia's Science and Technology Minister, announced plans to conclude simulations that copy the real-world use of cryptocurrencies by June. The minister stated that the outcomes from these simulations will help policymakers to create regulations for the sector. The simulations aim to discover a balance between innovation in digital payments and the safety of citizens because of the volatility of cryptocurrencies.
Zambia has adopted a cautious approach to cryptocurrency, and in February, the country's central bank cautioned that anyone interested in dealing with them should have a comprehensive understanding of the risks that come with the use of such payment and investment instruments. Bloomberg reported that the Bank of Zambia's warning was issued in response to a surge in cryptocurrency scams in the country.
The tests conducted by Zambia are part of a larger trend in Africa, with many countries on the continent exploring the potential of digital currencies.
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