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Crypto Finds a Use For AI, Finally

A CFTC-SEC divide, a Genesis-FTX feud, a CZ-Teng succession, and a MAS pry

June 5, 2023

Ah Monday... Everyone’s favourite day of the week. Whilst you were all living it large this weekend, Blockhead was busy keeping up with the ever-tireless world of crypto. Here’s what you missed, and what to look forward to in the week ahead. As ever, if you’re here from a friend, subscribe now.


AI or Web3? Which next-gen phenomenon will win the tech revolution? Well, it turns out the two aren't exactly mutually exclusive anymore.

Research shows that AI crypto assets experienced an impressive surge of 10.7% just one month after ChatGPT launched, skyrocketing to an astonishing 35.5% the following month.

Savvy investors, especially retail investors, use AI to strategize their crypto positions. Even institutional investors are playing a secondary role to retail investors in the AI crypto frenzy.

The AI Phenomenon Shaking Crypto Markets
From Wall Street to Crypto Street, the ChatGPT effect is redefining investor sentiment while igniting an AI revolution, explains cryptoeconomics professor Aman Saggu, in a guest post for Blockhead.

Search volumes for AI-related keywords have become crucial pricing indicators exclusively for retail investors venturing into the AI crypto asset space. When searches surge, crypto asset returns perform likewise.

Beyond this, crypto firms are using AI to strengthen their security. Crypto analytics firm Elliptic is using AI to catch hackers by tracking blockchain transactions and detecting risks.

Integrating ChatGPT allows us to scale up our intelligence, giving our customers a view on the risk they can’t get anywhere else,” says Jackson Hull, CTO at Elliptic.

So why back one horse when you can ride both?

Elsewhere:

  • Republican lawmakers have introduced a draft bill that proposes dividing regulatory authority between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Co-authored by Representatives Patrick McHenry and Glenn Thompson, the bill suggests that the CFTC would oversee crypto commodities in the spot market, while the SEC would regulate digital-asset securities. Its aim is to prevent the SEC from blocking alternative trading systems from listing crypto securities. The bill includes an exemption for DeFio assets certified by the SEC from being classified as securities.
  • FTX is disputing a claim by Genesis that it is not entitled to claims totalling “$0.00”. FTX debtors have objected to Genesis’ estimation that they are entitled t which Genesis stated in an estimation procedures motion filed on June 1. FTX debtors argue that they were not involved in the mediation process and were not given prior notice of the claim. The bankrupt crypto exchange had sought $4 billion from Genesis under bankruptcy laws. FTX debtors have filed a motion to lift the automatic suspension of legal proceedings against Genesis. The court will review the motion on June 15.
  • Last week, Binance appointed Richard Teng to head its regional markets outside the United States. The former Singaporean civil servant joined Binance as CEO of Singapore in August 2021. Now, it seems Teng could be the Binance heir to CZ. Teng's promotion to head of all regional markets outside the US demonstrates Binance's commitment to working with regulators and aligns with the exchange's focus on navigating the increasing regulatory landscape. CZ is known for his outspoken nature and active presence on social media, whilst Teng takes focuses on corporate messaging and regulatory milestones. The speculation about Teng being the heir comes as the Commodity Futures Trading Commission (CFTC) sues the exchange and CZ for alleged violations of derivatives regulations.
  • NewHuo, a company listed on the Hong Kong stock exchange and under the control of Lilin, the previous founder of Huobi has withdrawn its request for a cryptocurrency exchange license in both Hong Kong and Singapore.
  • The Monetary Authority of Singapore, MAS, has released an updated notification mandating enhanced customer due diligence for digital token payment and cryptocurrency firms. Its update includes the identification and reporting of "high-risk customers" being served, as well as the collection and provision of more comprehensive information. Entities must complete and submit forms to MAS within 60 days from the effective date of the notice. The forms require information such as the total value and number of payment transactions, the number of payment accounts issued, and the number of customers.
Blockcast 26: US Debt Ceiling; Markus Thielen Discusses “Crypto Titans”
Markus Thielen joins us in the studio to talk about his new book “Crypto Titans”, and we also discuss the US debt ceiling, and Hong Kong’s new crypto regulations.

Wed, 7 June: Web3 Blockchain Bootcamp, by Metacam
Thu, 8 June: Web2 & Web3 Developer Meetup (Q2 2023), by Talent@Web3
Thu, 8 June: Singapore Web3 Blockchain Community meetup, by Singapore Web3 Blockchain Community
Fri, 9 June: Celebration of Immersive Art, by Max Volume
Sat, 10 June: [Hybrid] You'll Never Rust Alone - Rust Study Group, by Vincent d.

We'll also be at Crypto Expo Asia, held at Singapore's Marina Bay Sands, on Wednesday and Thursday (7 - 8 June). More information below.

Crypto Expo Asia Announces Latest Headline Speakers, Partners - Coinhako, EMURGO, Matrixport and More
Tickets to the conference is selling out ahead of its 7 to 8 June launch at Marina Bay Sands Singapore.

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