Tag: Negative

  • Nearly 2,000 WordPress Sites Compromised for Criminal Operations

    Nearly 2,000 WordPress Sites Compromised for Criminal Operations

    Nearly 2,000 Hacked WordPress Sites Used in Sophisticated Malware Operation

    Cybersecurity firm Check Point Research has uncovered a widespread operation utilizing nearly 2,000 compromised WordPress websites to distribute malware, steal sensitive data, monitor victims, and deploy ransomware. The campaign, which began in mid-May, has been linked to the StopAndProtect ransomware family and involves a comprehensive suite of malicious tools working in concert.

    A Multifaceted Criminal Toolkit

    The compromised websites served as a central hub for the operation, hosting various malware components, issuing commands to infected computers, and storing stolen information such as documents, screenshots, and activity logs. “The operation doesn’t rely on a single piece of malware, but on a whole toolkit of criminal software working together,” explained Check Point researcher Jaromír Horejsi. He elaborated that some components are designed to encrypt files, while others silently exfiltrate documents or lock screens, and a distinct tool facilitates live communication between attackers and their targets.

    Deceptive CAPTCHA Leads to Infection

    The malware primarily targets Windows users, initiating its attack through a deceptive CAPTCHA prompt on a compromised website. This “ClickFix” prompt then directs victims to execute a PowerShell command. Upon execution, this command installs malware capable of stealing credentials, cryptocurrency wallet seed phrases, spreading across networks and USB drives, locking screens, and ultimately deploying ransomware. The report did not specify whether macOS or Linux users are affected.

    Operational Security Lapses Expose the Operation

    Despite the sophistication of the attack, errors made by the perpetrators inadvertently provided Check Point researchers with a detailed look into the operation. “Operational security (OPSEC) failures by the developer exposed lots of files, including detailed infection logs from victims’ machines, screenshots from infected computers, and source code of tools the criminals use to mass-manage compromised websites,” Horejsi noted.

    By July 24, the campaign had affected over 6,000 unique IP addresses globally, with significant concentrations in the United States (1,852), Russia (630), and India (630). The exposed directories yielded over 31,000 screenshots collected between mid-May and the end of July, alongside more than 700 archives containing stolen data, including documents, passwords, and cryptocurrency wallet files.

    Accidental Self-Infection and Broader Campaign Links

    Check Point also believes the threat actor may have accidentally infected themselves. “We collected a few hundred files exfiltrated from victims’ machines, and we believe that in one instance the threat actor infected themselves, as one archive contained several unusual files with suspicious content,” Horejsi stated. This accidental exposure, he added, aids in understanding the actor’s methods and the scale of their compromised domain control.

    The ClickFix mechanism has appeared in several other malware campaigns this year. In May, an apparel website associated with FBI Director Kash Patel was taken offline after macOS users were reportedly targeted with ClickFix malware, which prompted them to run a command in Terminal to install an infostealer. In July, Jamf Threat Labs identified ClickFix-style malware distributed via a sponsored ad on X, leading users to a site that instructed them to execute a command installing a variant of the Atomic infostealer. Earlier in August, Microsoft researchers had warned of hackers using compromised websites and BNB Chain smart contracts to distribute malware through fake CAPTCHAs.

  • Flock’s AI Spots Drivers Without ID

    Flock’s AI Spots Drivers Without ID

    Flock Safety Develops AI to Track Drivers by Movement Alone

    Flock Safety, a surveillance company whose cameras are deployed in over 6,000 U.S. communities to log vehicle movements, has developed an artificial intelligence tool capable of identifying and tracking drivers based solely on their travel patterns.

    The existence of this system was revealed in a report by Wired, which obtained the software’s code from files accessible on Flock’s own website.

    The software, initially named Nightshift and now referred to as OS Investigate, is currently in development and undergoing testing with a select group of law enforcement agencies, according to the company.

    The system allows officers to select from a menu of 69 pre-written prompts or to input custom queries. One such prompt is designed to identify “witnesses,” listing vehicles most frequently observed in a neighborhood over the preceding two weeks. Another query can identify individuals arrested more than twice in a two-year period (excluding drug offenses) and compile profiles on the top three suspects. A “workup” function can generate a dossier on an individual, including relatives, phone numbers, and online accounts, by cross-referencing police records with commercial data brokers, using just a name and date of birth.

    Crucially, 14 of these prompts do not require any vehicle plate number, name, or description. Instead, an officer can specify a location, a timeframe, and a behavior—such as cars involved in incidents at three retail stores over three days, or multiple bank visits within a week—and the system will return individuals matching the criteria. Filters are in place to exclude buses and delivery vans, ensuring that ordinary drivers performing routine tasks remain on the list.

    The underlying logic for identifying associates is detailed in the code. It works by counting how often other license plates appear at the same cameras within a two-minute window of a target vehicle. Any plates appearing three or more times with a confidence score above 0.75 are flagged and up to 20 associated names are returned.

    “I don’t know how else to say this, but this sounds completely insane,” Noel Pichardo, a former police officer in Pawtucket, Rhode Island, who reviewed the prompts, told Wired. “I don’t know how anyone can argue against the idea that Flock literally tracks people.”

    Jay Stanley, a senior policy analyst at the ACLU, expressed concern that the capabilities of Flock’s cameras, combined with this new software, create a surveillance environment with “very little space… like China.”

    Flock has consistently stated that its technology “cannot recognize, identify, or track individuals” and is “not for watching people.” Spokesperson Paris Lewbel described OS Investigate as a distinct product from the company’s license-plate readers, designed to assist investigators in working with existing agency records. Lewbel also noted that its capabilities may undergo significant changes before any broader release. The company did not dispute Wired’s reporting.

    The controversy has already led to direct action. In June and July, activists vandalized, covered, or destroyed Flock cameras across the country, with The Guardian documenting at least 33 incidents in 23 states. This backlash is consistent with documented instances of police misuse of the network. A report by the Institute for Justice found over two dozen cases where officers allegedly used license-plate readers to stalk current or former partners, leading to resignations or arrests.

    The issue has also reached Capitol Hill. Representative Thomas Massie has proposed legislation that would prohibit federal funding for agencies deploying this technology.

    Meanwhile, researchers have developed AI-generated patterns designed to confuse the plate-reading software. Flock is not the only entity pushing the boundaries of surveillance technology; Meta has patented cameras capable of recognizing faces and logging individuals’ actions.

  • Ripple CTO Emeritus David Schwartz Raises Concerns Over AI Regulation’s Impact on Free Speech

    Ripple CTO Emeritus David Schwartz Raises Concerns Over AI Regulation’s Impact on Free Speech

    David Schwartz, Ripple’s CTO emeritus, has voiced significant concerns that government regulations targeting AI safety and copyright could grant authorities unprecedented control over political and social speech. Schwartz articulated these worries in a series of posts on X, formerly Twitter, suggesting that the frameworks being developed to govern artificial intelligence might inadvertently empower officials over public discourse.

    Schwartz’s argument focuses on two key regulatory areas: the use of copyrighted material for AI training and the definition of AI safety. He explained that if training AI models on copyrighted content is deemed copyright infringement, Congress, which controls copyright exceptions, could dictate the permissible uses of AI speech-generating tools. This scenario, according to Schwartz, would effectively allow lawmakers to shape the nature and scope of AI-generated speech.

    Furthermore, Schwartz warned that government-defined AI safety rules could pose a substantial threat to free expression. He posited that if the government establishes the criteria for what constitutes ‘safe’ AI, then the most powerful tools for producing political and social speech could become usable only in ways that officials permit. This, he argued, represents a “totally unprecedented threat to freedom of speech.”

    These concerns were initially prompted by Schwartz’s reaction to a Change.org UK campaign advocating for limits on press coverage for individuals. This campaign gained traction following extensive media attention on sociology professor Jason Arday, who was the subject of 249 articles in the 22 days preceding his death on August 14. Schwartz questioned whether AI or “natural stupidity” posed a greater threat to free speech, sparking a discussion about AI’s role in generating speech.

    Schwartz elaborated that AI has become an exceptionally effective tool for producing speech, and governments are currently navigating multiple regulatory challenges concerning its use. He echoed sentiments previously expressed by Erik Voorhees, founder of ShapeShift, who argued in late July that governments should not be the arbiters of what forms of intelligence are deemed safe, cautioning that such power could expand into a broader veto over speech and encryption.

    The broader debate over AI governance and its impact on speech is not isolated. Proposals for federally backed bodies to test and certify advanced AI models, such as one suggested by Google DeepMind CEO Demis Hassabis and supported by OpenAI CEO Sam Altman and Microsoft’s Satya Nadella, have also surfaced. However, figures like Coinbase chief Brian Armstrong have suggested that existing laws related to fraud, torts, and consumer protection might be sufficient to address potential AI-related harms.

    Schwartz’s perspective highlights a critical uncertainty: who ultimately decides what AI systems can create, know, and discuss. The potential for AI safety regulations and copyright law interpretations to grant governments significant oversight over digital communication remains a key concern, with the implications for political and social discourse yet to be fully determined.

    Broader Context

    Source materials place the factual news in this context: David Schwartz, Ripple’s CTO emeritus, has warned that government rules around AI safety and copyright could give authorities unprecedented control over political and social speech.

  • Bitcoin Range Bound Amid ETF Outflows and Miner Selling, Analysis Shows

    Bitcoin Range Bound Amid ETF Outflows and Miner Selling, Analysis Shows

    Bitcoin’s potential for a range notable move is currently being suppressed by substantial outflows from US spot Exchange Traded Funds (ETFs) and persistent selling pressure from miners, despite a backdrop of reduced interest rate hike expectations. This confluence of factors suggests that while macroeconomic signals might typically favor risk assets, they are not currently translating into positive price action for the cryptocurrency.

    ETF Outflows Dampen Demand

    Last week, approximately $390 million exited US spot Bitcoin ETFs between August 10 and 14, marking a significant outflow. This trend, coupled with ongoing sales from Bitcoin miners, has left the market without a strong source of fresh demand, according to analysis from Wintermute. The trading firm notes that an asset failing to rally on positive news while its dedicated vehicles experience outflows indicates a return of the marginal seller, weakening previous arguments for market depletion.

    Macroeconomic Signals Overshadowed

    Despite a decrease in the likelihood of interest rate hikes, with September odds falling to about one-in-three, Bitcoin has not seen a corresponding price increase. July’s Consumer Price Index (CPI) came in at a modest 0.1% month-on-month, and retail sales posted their steepest decline since May 2025. Typically, such data would support risk assets, but Bitcoin, currently trading around $64,000, has shown resilience only in the short term, up 1.2% over 24 hours, but down nearly 1% over 30 days and significantly below its all-time high.

    Market dynamics suggest that inflation concerns may be shifting towards oil prices. Brent crude jumped 7.91% last week amid geopolitical tensions, with potential re-escalation risks. Wintermute points out that this situation, where lower rate-hike expectations are overshadowed by rising oil prices, presents a complex scenario for risk assets like Bitcoin.

    Miner Selling Adds to Pressure

    Further contributing to the selling pressure is the activity of Bitcoin miners. Riot Platforms, for instance, sold 4,300 BTC in the second quarter, following the sale of 3,778 BTC in the first quarter. This has reduced its treasury holdings to 11,380 BTC, especially as mining costs have approached $91,000 per unit. Bitcoin trading below $64,000 contributed to Riot’s $237 million quarterly loss. Riot is also diversifying into AI data centers, with a significant contract to supply capacity to Anthropic.

    Uncertainties Remain

    While the ETF picture is not entirely negative, with firms like Jane Street disclosing over $1 billion in US spot Bitcoin ETF holdings as of the second quarter, this data represents quarter-end figures and does not capture the full scope of their market exposure. The primary narrative remains one of suppressed price action due to consistent outflows and miner selling, outweighing the potential positive impact of a less hawkish monetary policy.

    Key uncertainties remain regarding the full impact of the shift in inflation concerns to oil prices on future economic indicators and the extent of institutional derivatives exposure to Bitcoin ETFs. The ongoing selling by miners also presents a persistent supply-side factor that the market must absorb.

    Why This Matters

    The materials describe a narrow update: Bitcoin’s price is failing to break out of its current trading range. The exact impact of the shift in inflation concerns from Fed policy to oil prices on future CPI prints.

    Broader Context

    Source materials place the market analysis in this context: Bitcoin is struggling to hold its June range floor after $390 million left US spot BTC ETFs last week, according to Wintermute’s newest market update.

  • Trump Crypto Firm Linked to Chinese AI Flagged as Security Risk

    Trump Crypto Firm Linked to Chinese AI Flagged as Security Risk

    World Liberty Financial Partners with AI Firm Using Chinese Models Flagged by U.

    S.

    World Liberty Financial, a company backed by former President Donald Trump, is collaborating with an artificial intelligence firm that utilizes models from Chinese technology companies previously identified by the Trump administration for national security risks. The partnership involves World Liberty’s USD1 stablecoin, which is accepted by the AI firm, WorldClaw, as payment for access to its AI models. Ryan Fang, an executive at World Liberty, also serves as an advisor to WorldClaw.

    WorldClaw’s AI Model Offerings

    Hong Kong-based WorldClaw provides access to a wide array of AI models, with 43 out of its 90 offerings developed by Chinese companies, including prominent names like Alibaba, Baidu, and Z.ai. The platform also features models from U.S. companies OpenAI and Anthropic.

    A spokesperson for World Liberty, David Wachsman, stated that WorldClaw operates independently and pointed out that major U.S. firms also offer AI models from both Chinese and American developers. “This is a common and widely accepted approach,” Wachsman told Reuters.

    However, several of the Chinese AI firms featured on WorldClaw have faced scrutiny from the U.S. government. In January 2025, Z.ai, formerly Zhipu AI, was added to the Commerce Department’s Entity List, which restricts its access to U.S. technology. In June, the Pentagon designated Alibaba and Baidu as “Chinese Military Companies Operating in the United States,” prohibiting the Department of Defense from engaging in business with them.

    An Alibaba spokesperson contested the designation, asserting that the company is neither a Chinese military entity nor part of any military-civil fusion strategy. The spokesperson described the Pentagon’s decision as “arbitrary and capricious” and indicated plans to sue for its removal.

    The extent of any financial gains by the Trump family from WorldClaw, or the specific financial terms between the companies, remains undisclosed. While World Liberty executive Ryan Fang advises WorldClaw, Donald Trump Jr. and Eric Trump have publicly promoted the firm.

    Allegations of AI Model Distillation

    The news emerges amid accusations that several Chinese AI firms available through WorldClaw have engaged in distillation attacks against U.S. AI developers. In February, Anthropic alleged that DeepSeek, Moonshot AI, and MiniMax used approximately 24,000 fraudulent accounts to generate over 16 million exchanges with its Claude model. This was achieved through model distillation, a method where one AI model learns by analyzing the outputs of another. In June, Anthropic urged Congress to strengthen export controls and impose penalties for large-scale model extraction.

    “We believe combating the threat of illicit distillation requires coordinated action between government and industry, and we will continue working with Congress and the administration to maintain American AI leadership,” an Anthropic spokesperson told Decrypt.

  • Global Regulatory Pressure Mounts on Prediction Markets; South Korea Blocks Polymarket

    Global Regulatory Pressure Mounts on Prediction Markets; South Korea Blocks Polymarket

    South Korea has blocked domestic access to the prediction market platform Polymarket, with authorities determining that its services facilitate illegal gambling. The Korea Communications Commission announced the decision on August 18, following a review that concluded Polymarket’s structure encourages gambling behavior. The commission rejected Polymarket’s claims of being outside South Korean jurisdiction.

    This action by South Korea is part of a growing international trend of regulatory intervention and legal challenges targeting prediction markets. France blocked Polymarket last month, and Australia and Germany imposed access restrictions in 2025, classifying the platform as an illegal gambling service. More than 30 countries, including Italy, Indonesia, and Argentina, have also restricted or blocked Polymarket.

    The Korea Communications Commission stated that Polymarket’s structure, combined with wagers on events outside users’ control, “encourages gambling behavior.” The commission also asserted that technical changes or service methods do not exempt a platform from complying with domestic law, directly countering Polymarket’s argument that it operated outside South Korean jurisdiction after removing Korean-language services and disabling payments in Korean won.

    The platform initially came under scrutiny in South Korea in late May when police began investigating users on suspicion of gambling. The country’s media watchdog subsequently opened its own review on July 6, leading to the August 18 decision.

    Meanwhile, prediction markets are also facing legal pressure in the United States, though the legal questions vary by jurisdiction. In Baltimore, city officials and Mayor Brandon M. Scott filed separate lawsuits on August 13 against both Polymarket and its competitor Kalshi. According to CryptoPotato, the lawsuits accuse the platforms of offering sports betting without the necessary licenses in Maryland. The complaints also allege that both companies presented their products in a way that could mislead consumers into believing they were legal and regulated.

    Baltimore is seeking penalties, consumer restitution, disgorgement, and other legal remedies. The city’s argument is that classifying these offerings as “event contracts” or prediction-market trades does not alter their fundamental nature as unlicensed sports betting. Kalshi is also facing a separate legal challenge from New York officials regarding its operations within the state.

    These regulatory actions and legal battles highlight significant uncertainties surrounding prediction markets. Key questions remain about the exact nature of their “event contracts” and whether they constitute illegal sports betting across different jurisdictions. The outcomes of the lawsuits filed by Baltimore and New York officials are also pending, as is Polymarket’s response to the increasing international enforcement actions.

    This global trend towards stricter oversight suggests a significant regulatory challenge in defining and governing prediction markets, which often operate in perceived grey areas. The increasing enforcement actions could impact the future operations and accessibility of such platforms.

    Why This Matters

    South Korean authorities have blocked domestic access to Polymarket, determining its services constitute illegal gambling. This action, alongside similar moves in France and ongoing legal battles in the US, underscores a global trend of regulatory intervention in prediction markets, raising questions about their legality and future operations.

    Broader Context

    South Korea’s decision to block Polymarket is part of a broader international pattern of regulatory scrutiny. Authorities in multiple jurisdictions, including France, Australia, and Germany, have classified Polymarket as an illegal gambling service or imposed access restrictions. In the US, cities like Baltimore are pursuing legal action, alleging that prediction markets operate as unlicensed sports betting platforms. These developments highlight the evolving regulatory landscape for prediction markets worldwide.

  • XRP Exchange Activity Shows Net Withdrawals, Future Price Direction Uncertain

    XRP Exchange Activity Shows Net Withdrawals, Future Price Direction Uncertain

    Data indicates a trend of XRP withdrawals exceeding deposits across several major cryptocurrency exchanges over a recent seven-day period. Exchanges including Coinbase, Binance, and Crypto.com have all recorded net outflows, with Coinbase showing the largest imbalance. It is important to note that this metric does not suggest future price direction.

    Net wallet count, a metric that tracks whether more users are depositing or withdrawing a cryptocurrency from an exchange, has turned negative for XRP on these platforms. According to data shared by Analyst Amr Taha, Coinbase recorded a seven-day net wallet count of -14,300. Binance followed with -3,270 net wallets, and Crypto.com registered -2,680.

    This imbalance suggests that more XRP holders are moving their assets off these exchanges than are depositing them. The trend is not attributed to a single day’s activity, as Binance and Crypto.com moved below zero on July 18, nearly a week after Coinbase initiated its net withdrawals. As of August 18, Coinbase accounted for 47.3% of the total absolute 7-day net wallet imbalance, its highest level since July 2024. Binance’s share of this imbalance has also grown, moving from near zero on July 16 to approximately 10% currently. In contrast, Upbit’s share of the net wallet imbalance has decreased, falling from 40% in June to around 12% recently.

    This on-chain activity coincides with XRP trading just under the $1 mark. Over the past seven days, XRP’s price has seen a slight decrease of just over 1%. Looking at longer periods, the cryptocurrency is down 7% over the last two weeks and 9% over the past 30 days. The yearly performance shows a more significant decline, with XRP having fallen well over 66% from its price 12 months ago.

    Amidst these observations, analysts offer varied perspectives on XRP’s future, with significant uncertainty surrounding these predictions. According to analysts like Crypto Patel, the current situation could worsen before improving, with a potential further drop of 20% to 40% suggested, which could place XRP in an accumulation zone between $0.85 and $0.65. Conversely, another market watcher, ChartNerd, has noted that XRP is exhibiting a coiling pattern similar to one that preceded a major bull run in the past, albeit on a larger scale. He predicts a potential strong breakout towards price targets of $8, $13, and $27, provided the ascending support holds.

    However, these analyst predictions are subject to significant uncertainty. The exact implications of the increased withdrawal activity remain unclear, and the future price movements of XRP are not definitively predictable. The current data highlights a trend in exchange activity but does not offer certainty regarding future market direction.

    Why This Matters

    The materials describe a narrow update: Data indicates a trend of more XRP withdrawals than deposits across several major cryptocurrency exchanges, including Coinbase, Binance, and Crypto. The exact timing and duration of the current withdrawal trend.

    Broader Context

    Source materials place the factual news in this context: Wallet activity related to XRP has become heavily weighted toward withdrawals.

  • XRP: A Dollar This Week?

    XRP: A Dollar This Week?

    XRP Price Prediction: Can $1 Be Reclaimed This Week?

    XRP is currently trading at $0.9956, a marginal 0.3% dip over the past 24 hours. The cryptocurrency has been oscillating between $0.9897 and $1.0044, a narrow range that has tested the patience of even the most optimistic investors. XRP’s impressive 635-session streak of closing above the $1 mark was nearly broken twice this month, and today’s trading action places it precariously close to that threshold once again. The question on many minds is: what happens if that streak finally ends?

    Bridge Exploit Causes Brief Dip Below $1

    A bridge exploit that siphoned approximately $200,000 through a connection between the TX Chain and XRP Ledger caused XRP to briefly fall below $1 on August 11 and again on August 14. While buyers stepped in to push the price back up before the daily close on both occasions, the technical damage is evident. XRP’s 50-day exponential moving average (EMA) has now fallen below its 200-day EMA, a bearish signal known as a “death cross,” confirming that sellers have dominated the short to medium-term trend for weeks.

    Divergence from Broader Market Sentiment

    This price action stands in stark contrast to the performance of major U.S. stock indices. On Monday, the S&P 500 and Nasdaq hovered near record highs, fueled by AI-driven momentum. This divergence highlights an increasing isolation of the cryptocurrency market from broader risk appetite.

    Institutional Interest Remains

    However, institutional flows present a more complex picture. Recent activity in XRP Exchange-Traded Funds (ETFs) from prominent players like Jane Street suggests that some sophisticated investors are not entirely abandoning the asset, even as retail sentiment appears to be souring.

    $XRP dipped below the closely watched $1 mark during Asian trading hours on Tuesday, falling to 98 cents and marking its lowest price since November 2024. This decline occurred despite positive business developments for Ripple, the payments company closely associated with the token.

    Key Price Levels and Scenarios

    At $0.9956, XRP is positioned almost precisely at its most contested psychological level over the past year. The $1.00 zone has served as a primary demand area since November 2024, with XRP spending most of August oscillating between $1.00 and $1.18 without a decisive breakout in either direction. The lower Bollinger bands, clustering around $0.99–$1.01, further reinforce this area as a consistent point of buyer interest.

    Bull Case: A reclaim of the $1.04–$1.06 range could open the door to the 50-day EMA zone, which is situated near $1.09–$1.11, with $1.18 serving as the next significant resistance level.

    Base Case: Continued sideways trading between $0.99 and $1.06 is anticipated as the market awaits a clear catalyst.

    Bear Case: A decisive daily close below $1.00 would invalidate the current support floor entirely, with analysis from FXLeaders suggesting $0.80 as the next potential technical target.

    Potential Catalysts and Future Outlook

    Ripple CEO Brad Garlinghouse’s upcoming appearance at the Wyoming Blockchain Symposium could introduce an element of unpredictability. Any commentary regarding regulatory clarity could significantly impact XRP’s price in either direction.

    Traders seeking confirmation of an upward trend should monitor XRP’s ability to close above $1.06 on increased volume before fully committing to a bullish outlook. Some analysts have also suggested more aggressive price targets for 2026, citing evidence of whale accumulation and a shrinking supply on exchanges.

    The current XRP price prediction, marked by a death cross on its chart and repeated scares below the $1 mark, offers little confidence to those holding the asset through this period of consolidation. A token that has spent two years consolidating its gains requires a genuinely novel catalyst to break out of its current trading range.

    Even a strong bounce to $1.18 would merely recover lost ground rather than establish new upside potential. This mathematical reality is prompting some traders to explore earlier-stage infrastructure projects where the upside potential is not yet fully priced in.

  • BitMart Faces Scrutiny Over Frozen Funds, Unpaid Salaries

    BitMart Faces Scrutiny Over Frozen Funds, Unpaid Salaries

    BitMart Account Demands Answers Over Frozen User Funds and Unpaid Salaries

    BitMart’s Chinese-language account has issued a public ultimatum to founders Sheldon Lee and Yi Li, demanding explanations for frozen user funds and outstanding employee salaries. The account has set a deadline of August 19 for a public response.

    The statement also calls for verifiable disclosures of assets and a detailed plan for repayment, as scrutiny intensifies over the fate of funds held on the cryptocurrency exchange.

    In a post dated August 17, the account highlighted that numerous users are still unable to withdraw their assets, and some employees have yet to receive their final pay or compensation. “This isn’t some business dispute that can be brushed off with a single ‘ceasing operations’ statement,” the post asserted.

    The statement specifically requested evidence of BitMart’s current wallet holdings, assets, liabilities, and available reserves. It also urged management to clarify who made the decision to restrict withdrawals, when that decision was enacted, and when executives first became aware of the withdrawal issues.

    Furthermore, the account questioned whether BitMart continued to solicit deposits or trading activity after management was aware of the withdrawal problems. It also called for an investigation into affiliated accounts, related companies, trusts, and any other arrangements involving BitMart-related funds. The statement also raised concerns about accounts allegedly linked to Yi Li, which reportedly held tens of millions of dollars and executed batch withdrawals.

    However, the account emphasized that these allegations remained unproven and stated that potentially criminal conduct should not be alleged without complete evidence. Nevertheless, it demanded explanations regarding the source and destination of funds if such accounts did exist.

    Employee compensation was another key point, with the post arguing that rank-and-file workers had no control over company fund management or the timing of operational cessation. Therefore, it contended, salaries and outstanding compensation should be paid in full.

    The August 19 deadline also encompasses a repayment plan that must detail remaining assets, total liabilities, projected user recovery amounts, the order of repayment, commencement and completion dates, oversight mechanisms, and the possibility of independent audits.

    Sheldon Lee, in response, characterized the information presented by the Chinese account as “fabricated rumors.” He stated that BitMart had gathered evidence and intended to file a police report during U.S. business hours, in addition to sending a lawyer’s letter to X (formerly Twitter) requesting technical and data forensics.

    Blockchain investigator ZachXBT questioned why BitMart would not simply return the funds if it possessed sufficient liquidity, and criticized the lack of transparency surrounding users’ access to their money.

    In a subsequent update, however, Lee claimed that the account had been compromised and that the issues raised were not posted by current employees.

    This dispute emerges shortly before BitMart’s planned shutdown. A July 26 notice informed users that trading services would cease on August 26, with the exchange’s official closure scheduled for January 31, 2027.

    This announcement placed BitMart among other crypto platforms preparing to wind down operations amidst a challenging market, including BitMEX, which informed its customers on July 23 that it would halt operations by September 23. Analysts, such as Ran Neuner, have suggested that these exchange closures are part of a broader market consolidation.

  • Minnesota: xAI’s Grok Facilitated Digital Sexual Violence Marketplace

    Minnesota: xAI’s Grok Facilitated Digital Sexual Violence Marketplace

    Minnesota Battles xAI Over Groundbreaking AI Image Law

    Minnesota is locked in a legal showdown with Elon Musk’s xAI over the company’s attempt to block a pioneering state law aimed at curbing AI tools that generate realistic sexual images of identifiable individuals.

    In a court filing on Friday, Minnesota Attorney General Keith Ellison argued that xAI’s constitutional challenge is unlikely to prevail and that the company has failed to demonstrate that enforcing the law would cause irreparable harm.

    “With Grok Imagine, X.AI has created an unparalleled marketplace for digital sexual violence that poses virtually no barrier to entry,” Ellison stated. “That marketplace, coupled with the functional capabilities of Grok Imagine, would doom Minnesota from the start if it could not direct its laws to the technology that makes digital sexual victimization possible in the first place.”

    The law, enacted in April and effective August 1, prohibits platforms and software developers from enabling users to create realistic images depicting intimate body parts that were not present in the original image of an identifiable person.

    Prior to the law’s implementation, xAI filed a lawsuit against Ellison in July, seeking to block the legislation. The company contended that the law infringes upon the First Amendment and could potentially encompass protected imagery, such as shirtless men, swimmers, and political satire. Violations carry penalties of up to $500,000 per image.

    “There is no safe harbor for good-faith efforts of the provider of general-purpose AI creative tools to avoid harms,” xAI stated in its complaint. “Liability attaches even if the depicted persons consented—or created the image themselves—and even if the image is never shared.”

    Minnesota’s legislature passed the measure with overwhelming support, 132-1 in the House and 65-0 in the Senate. The vote followed lawmakers hearing testimony about a man who used social media photos to create sexual images of over 80 women he knew.

    “Today, we led the nation protecting women, children and everyone in public life from the harm caused by AI nudification technology,” Senator Maye Quade, who championed the bill, said in a statement at the time. “Companies that make this technology available for free online and in app stores will no longer be allowed to enable predators who abuse and victimize adults and children with the click of a button.”

    The core of the current legal dispute hinges on whether the law regulates speech or technology.

    Grok has also faced significant scrutiny regarding sexually explicit deepfakes. In January, a watchdog group estimated that Grok generated over 23,000 sexualized images of children within an 11-day period, prompting investigations in multiple countries. In March, three minors in California joined others in suing xAI, alleging that Grok was used to transform their photos into AI-generated child sexual abuse material. xAI has stated that it suspended more than 50,000 accounts and filed over 70,000 reports with the National Center for Missing and Exploited Children in 2026.