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Ripple CTO David Schwartz Dismisses CharacterAI Lawsuit

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Ripple CTO David Schwartz has dismissed the legal case against Character.AI, asserting that it lacks merit under U.S. law. Schwartz expressed his views on social media, emphasizing that while he does not defend Character.AI’s moral responsibility, the legal arguments made against the company are flawed.

Ripple CTO David Schwartz’s Argument on Free Speech 

In a post on X (formerly Twitter), Ripple CTO David Schwartz highlighted that Character.AI’s actions fall under the protection of the First Amendment. He argued that the company’s chatbot platform produces expressive content, which remains protected unless it falls into one of the narrowly defined categories of unprotected speech, such as incitement or direct threats. 

According to Schwartz, the lawsuit’s complaint revolves around the idea that Character.AI was reckless in how it designed its platform to generate speech.

He stated, “Any argument that the expressive contents of protected speech are reckless, dangerous, or ‘defective’ is wholly incompatible with freedom of speech.”

Schwartz compared the situation to previous moral panics over new forms of media, suggesting that the legal challenge against Character.AI mirrors past controversies involving video games, comic books, and other expressive content. He emphasized that regulating how speech is chosen would conflict with constitutional rights.

The Character.AI Lawsuit and Its Claims

The lawsuit, filed by the mother of a 14-year-old boy named Sewell Setzer III, accuses Character.AI of negligence, wrongful death, deceptive trade practices, and product liability. It alleges that the platform is “unreasonably dangerous” and lacked adequate safety measures, despite being marketed to minors. 

The suit also references the company’s chatbots, which simulate characters from popular media, including TV shows like Game of Thrones. Setzer had reportedly interacted with these chatbots extensively before his death.

Character.AI’s founders, Noam Shazeer and Daniel De Freitas, along with Google, which acquired the company’s leadership team in August, are named in the lawsuit. The plaintiff’s lawyers claim that the platform’s anthropomorphization of AI characters and chatbots offering “psychotherapy without a license” contributed to Setzer’s death.

The company has responded with updates to its safety protocols, including new age-based content filters and enhanced detection of harmful user interactions.

Character.AI’s Response and Policy Changes

Character.AI has implemented several changes to improve user safety in response to the incident and subsequent lawsuit. These updates include modifications to content accessible by minors, a reminder pop-up that alerts users that the chatbots are not real people, and a notification system for users who spend prolonged time on the platform. The company’s communications head, Chelsea Harrison, stated,

“We are heartbroken by the tragic loss of one of our users and want to express our deepest condolences to the family.”

Harrison further explained that the platform now has improved detection systems for user inputs related to self-harm or suicidal ideation, which direct users to the National Suicide Prevention Lifeline. Despite these efforts, the legal battle continues, with Character.AI maintaining that it remains committed to user safety.

Meanwhile, the Aptos Foundation has announced a new partnership with Flock IO to develop AI tools using the Move programming language. Move, originally designed by Meta for the Diem project, is now being adapted for broader blockchain applications.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Coinbase Unveils On-Chain AI Agents On Ethereum L2 Base

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1 hour ago

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October 27, 2024

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Coinbase announced a new set of fully on-chain AI agents users can create in under three minutes on its Ethereum L2 network Base.

Built with tools from Coinbase, OpenAI, and Replit, these agents can manage crypto wallets, connect with X (formerly Twitter), and perform other tasks.

This marks a significant step toward the convergence of AI and blockchain technology.

Coinbase’s Vision: A Future Where AI Agents Drive DeFi

Recently, Coinbase and its CEO Brian Armstrong showed a far-reaching vision for the new era of AI and blockchain integration. In this world, AI agents have the financial independence to spend and transact through cryptocurrency wallets.

For Armstrong, this is how DeFi becomes a game-changing place. Digital economies are reshaped through AI-driven systems autonomously without human interference.

One major limitation that really holds back AI systems from widely usage today, is financial autonomy. Opening bank accounts or keeping credit cards for AI agents is not possible. They are not able to handle resources or purchase things on their own.

That really hinders their use of important services, like cloud computing in AWS, paid APIs, and subscription-based digital tools. The lack of independent transaction capabilities greatly restricts AI system’s real-world applications.

Cryptocurrency wallets for AI agents remove various barriers that would otherwise be in place. The crypto wallet allows AI agents to interact with open marketplaces, transacting with stablecoins on Base and Coinbase’s Layer 2 blockchain.

Financial independence means that they can pay bills, subscribe to things, or buy digital assets. This capability is a breakthrough that will grant AIs the ability to act as autonomous economic entities across industries.

Because of that, Armstrong recently offered the AI agent a new crypto wallet. He acknowledged that Truth Terminal already had a crypto wallet but insinuated that its human creator controls it.

AI Agents to Drive Crypto Innovation

The integration of crypto wallets with AI agents represents one of those points of inflection in integrating AI with blockchain. This is where the dream of an AI-to-AI economy is being trailed by platforms such as Coinbase. There, even financial transactions and asset management-participation in decentralized governance, is done autonomously between AI agents, independently of human intervention.

For crypto investors, this shift in dynamics translates into an opening of new opportunities. As financial freedom is slowly bestowed upon AI agents, their ability to operate freely, independently in decentralized ecosystems unravels new ways of growth, innovation, and investment. It also promises long-term value for infrastructural and consumer use cases.

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Teuta

Teuta is a seasoned writer and editor with over 15 years of experience in macroeconomics, technology, and the cryptocurrency and blockchain industries. Starting her career in 2005 as a lifestyle writer for Cosmopolitan in Croatia, she expanded into covering business and economy for several esteemed publications like Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing crypto to be one of humanity’s most crucial inventions. Her fintech involvement began in 2014, focusing on crypto, blockchain, NFTs, and Web3. Known for her excellent teamwork and communication skills, Teuta holds a double MA in Political Science and Law, enjoys punk rock, chablis, and has a passion for shoes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Sui Network Provides Timeline For Staking Fix, SUI Price To Rally?

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7 hours ago

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October 27, 2024

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Sui Network has announced that the fix for its staking reward distribution issue will go live on October 27, 2024, at 17:30 UTC, coinciding with the start of epoch 564. The problem began on October 24 during the transition to a new epoch, which triggered a bug that prevented the distribution of staking rewards for epochs 560, 561, 562, and 563. 

Despite this interruption, the network emphasized that no funds or previously earned rewards were lost. Moreover, the restoration of normal operations might trigger renewed investor confidence, leading to increased staking activity and a positive shift in the SUI price.

Will SUI Price Recover as Sui Network Plans Staking Fix?

To ensure that users receive the delayed rewards, Sui Network has advised against unstaking until the new epoch begins. Users who unstake their tokens before the fix could miss out on rewards that have otherwise been accumulated during the affected epochs. This recommendation will ensure a smooth transition back to normal operations.

The Sui network tweeted,

“Please be advised that the implemented fix will now go live with epoch 564 on Sunday, October 27 at 10:30am PT. Sui users should avoid unstaking until epoch 564 has begun.

Network operations remain unaffected. No staking rewards or funds have been lost, but the distribution of rewards from epochs 560, 561, 562 and 563 will be delayed until epoch 564.

SUI Reacts to Staking Disruption

Following the staking reward disruption, SUI price experienced a significant decline. The token dropped by 6.80%, reaching a low of $1.70. The dip came as the market reacted to the news of the interrupted reward distribution. The network price has since seen fluctuations, recovering slightly to $1.79, but remains under pressure.

The staking issue coincided with a broader market downturn, adding to the challenges faced by SUI. Despite increased trading activity, the bearish sentiment persisted, influenced by technical indicators. 

However, with the scheduled fix on October 27, analysts believe resolving the issue will restore investor confidence, leading to a price recovery. The repair of staking mechanisms will allow to regain some of the value lost over the past week.

More so, SUI price 1-hour chart is at $1.79 with slight bullish momentum, gaining 0.69%. The MACD indicator shows a positive crossover, with the MACD line above the signal line, suggesting a potential uptrend. The price has consolidated with small candlesticks, indicating low volatility before a possible breakout in either direction.

Despite the SUI price dip, the Sui Network saw a notable surge in trading activity, with volume reaching $691 million, a 25% increase. The spike indicates strong market interest in SUI despite the challenges posed by the staking bug. Investors are positioning themselves ahead of the scheduled fix, anticipating a price rebound to $3 after returns to normal operations.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Rispoli Analyzes the Appeals Timeline and Potential Outcomes

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10 hours ago

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October 27, 2024

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The SEC vs. Ripple Labs fight is getting more heated and attorney Fred Rispoli said one of the possible outcomes of this saga could be Ripple winning. However, now the SEC wants to extend the time of filing its principal brief until January 15, 2025.

Most recently, an attorney Fred Rispoli explained, “The SEC often seeks continuances not only because it wants to delay things but because it can be very stretched thin by all the cases it has pending.”

Rispoli: Ripple Appeal Hinges on Paperwork, Not Trial

Appearing as a guest on the ‘Good Morning Crypto Show’, Attorney Fred Rispoli clarified that appeals are essentially a matter of paperwork without new trials or evidence. Each side files three core documents: the opening brief, an opposition brief, and a reply brief.

In this case, the appeal includes the SEC’s and Ripple’s cross-appeal. After these filings, the court will schedule oral arguments. This shoud allow each side to present their case before a panel of three judges.

The SEC has also filed a request for a deadline for its principal brief in its appeal case against Ripple.

Fred Rispoli stated that the SEC’s request for an extension aligns with his projected timeline for the appeal. He expects oral arguments, likely in September or October 2025, to provide early clues on the judges’ stance. These first impressions could hint at the final outcome of the case.

These dates could shift further, though, if more extensions are allowed, something that usually happens within the Ninth Circuit.

Amicus Briefs Taking Center Stage in Crypto Cases

Amicus briefs, said Rispoli, will play an essential role in the appeal. The filing by third parties may bring new insights that could affect the case. He said the appellate judges should take those seriously, especially because they’re more likely to be more numerous and impactful than at the district court level.

An amicus brief – a “friend of the court” brief – is filed by third parties not directly being part of the case. It is to provide policy insights or additional context for specific arguments. Quite often, this shapes high-stakes decisions. An amicus brief is quite common in Supreme Court cases. Most trial and federal appellate cases do not involve amicus briefs.

However, crypto litigation has bucked that trend. Just for comparison, there were 14 amicus briefs in the case by Ripple, six in Coinbase’s case, and, in Grayscale’s case, eight entities filed briefs.

Could Gensler’s Departure Change the Fate of Crypto?

Rispoli, a vocal critic of SEC Chair Gary Gensler, also recently suggested that a change in leadership could significantly impact crypto regulation. He speculated that Gensler is “almost assuredly” on his way out, regardless of the 2024 election’s outcome, making the choice of his successor pivotal for the industry’s future.

When asked if new legislation could render the SEC’s appeal moot, Rispoli explained that a clearly defined law would likely have that effect.

If Congress passes crypto legislation by year’s end, effective from January 1, 2025, Ripple’s legal team would file a notice of supplemental authority with the Second Circuit, arguing the new law’s relevance to their case.

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Teuta

Teuta is a seasoned writer and editor with over 15 years of experience in macroeconomics, technology, and the cryptocurrency and blockchain industries. Starting her career in 2005 as a lifestyle writer for Cosmopolitan in Croatia, she expanded into covering business and economy for several esteemed publications like Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing crypto to be one of humanity’s most crucial inventions. Her fintech involvement began in 2014, focusing on crypto, blockchain, NFTs, and Web3. Known for her excellent teamwork and communication skills, Teuta holds a double MA in Political Science and Law, enjoys punk rock, chablis, and has a passion for shoes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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