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AI Is on the Verge of Its Biggest Upgrade Yet: Emotional Intelligence

by admin September 7, 2025



In brief

  • Two new research papers show how AI agents can be engineered with fixed psychological archetypes or evolve emotional strategies during conversations.
  • Emotion boosts performance: personality priming improves consistency and believability, while adaptive emotions measurably increase negotiation success.
  • Advocates see more natural human–AI interactions, but critics warn of manipulation and blurred accountability as agents learn to argue, flatter, and cajole.

The dawn of emotionally intelligent agents—built for both static temperament and dynamic interaction—has arrived, if two unrelated research papers published last week are any judge.

The timing is sensitive. Almost daily, news accounts have been documenting instances where chatbots have nudged emotionally unstable users toward harming themselves or others. Yet, taken as a whole, the studies suggest that AI is moving into a realm where personality and feeling can even more radically shape how agents reason, speak, and negotiate.

One team showed how to prime large language models with persistent psychological archetypes, while the other demonstrated that agents can evolve emotional strategies during multi-turn negotiations.

Personality and emotion are no longer just surface polish for AI—they’re becoming functional features. Static temperaments make agents more predictable and trustworthy, while adaptive strategies boost performance in negotiations and make interactions feel eerily human.



But that same believability raises thorny questions: If an AI can flatter, cajole, or argue with emotional nuance, then who’s responsible when those tactics cross into manipulation, and how do you even audit “emotional alignment” in systems designed to bend feelings as well as logic?

Giving AI a personality

In Psychologically Enhanced AI Agents, Maciej Besta of the Swiss Federal Institute of Technology in Zurich and colleagues proposed a framework called MBTI-in-Thoughts. Rather than retraining models, they rely on prompt engineering to lock in personality traits along the axes of cognition and affect.

“Drawing on the Myers-Briggs Type Indicator (MBTI), our method primes agents with distinct personality archetypes via prompt engineering,” the authors wrote. This allows for “control over behavior along two foundational axes of human psychology, cognition and affect,” they added.

The researchers tested this by assigning language models traits like “emotionally expressive” or “analytically primed,” then measuring performance. Expressive agents excelled at narrative generation; analytical ones outperformed in game-theoretic reasoning. To make sure the personalities stuck, the team used the 16Personalities test for validation.

“To ensure trait persistence, we integrate the official 16Personalities test for automated verification,” the paper explains. In other words: the AI had to consistently pass a human personality test before it counted as psychologically primed.

The result is a system where developers can summon agents with consistent personas—an empathetic assistant, a cold rational negotiator, a dramatic storyteller—without modifying the underlying model.

Teaching AI to feel in real time

Meanwhile, EvoEmo: Evolved Emotional Policies for LLM Agents in Multi-Turn Negotiation, by Yunbo Long and co-authors from the University of Cambridge, tackles the opposite problem: not just what personality an agent has, but how it can shift emotions dynamically as it negotiates.

The system models emotions as part of a Markov Decision Process, a mathematical framework where outcomes depend not only on current choices but on a chain of prior states and probabilistic transitions. EvoEmo then uses evolutionary reinforcement learning to optimize those emotional paths. As the authors put it:

“EvoEmo models emotional state transitions as a Markov Decision Process and employs population-based genetic optimization to evolve high-reward emotion policies across diverse negotiation scenarios.”

Instead of fixing an agent’s emotional tone, EvoEmo lets the model adapt—becoming conciliatory, assertive, or skeptical depending on the flow of dialogue. In tests, EvoEmo agents consistently beat both plain baseline agents and ones with static emotions.

“EvoEmo consistently outperforms both baselines,” the paper notes, “achieving higher success rates, greater efficiency, and more savings for buyers.”

Put simply: emotional intelligence isn’t just window dressing. It measurably improves outcomes in tasks such as bargaining.

Two sides of the same coin

At first glance, the papers are unrelated. One is about archetypes, the other about strategies. But read together, they chart a two-part map of how AI could well evolve:

MBTI-in-Thoughts ensures an agent has a coherent personality—empathetic or rational, expressive or restrained. EvoEmo ensures that personality can flex across turns in a conversation, shaping outcomes through emotional strategy. Tapping into both is a pretty big deal.

For instance, imagine a customer-service bot with the patient warmth of a counselor that still knows when to stand firm on policy—or a negotiation bot that starts conciliatory and grows more assertive as the stakes rise. Yeah, we’re doomed.

The story of AI’s evolution has mostly been about scale—more parameters, more data, more reasoning power. These two papers suggest an emerging chapter may be about emotional layers: giving agents personality skeletons and teaching them to move those muscles in real time. Next-gen chatbots won’t only think harder—they’ll sulk, flatter, and scheme harder, too.

Generally Intelligent Newsletter

A weekly AI journey narrated by Gen, a generative AI model.



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September 7, 2025 0 comments
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Chainlink CEO and co-founder Sergey Nazarov
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How Stripe’s Tempo and Circle’s Arc Fail the Decentralization Test, Explains Libra Co-Creator

by admin September 7, 2025



Christian Catalini, co-creator of Facebook’s Libra project, warned on Friday that Stripe’s Tempo and Circle’s Arc could succeed commercially but at the cost of crypto’s decentralization ideal.

Launched in 2019, Libra was Meta’s bold bid to create a global digital currency backed by a basket of stable assets. The project promised to make payments as seamless as messaging, but it triggered immediate backlash from regulators concerned about financial sovereignty, systemic risk, and user privacy. By 2022, Libra — renamed Diem in a bid to reset its image — was shuttered and its assets sold off.

Catalini, who served as Libra’s chief economist, used his Sept. 5 thread on X to revisit the project’s early compromises and explain why they matter now. He said the original open design, developed with Harvard economist Scott Kominers, was reduced to a short appendix after months of regulatory negotiations.

The first major retreat, he wrote, was abandoning non-custodial wallets. Regulators insisted on a “clear perimeter,” meaning a responsible intermediary they could contact — and penalize — if problems arose.

For supervisors used to intermediated finance, a world where users truly held their own money was unmanageable. “For them, killing self-custody wasn’t a choice, it was an obvious necessity,” he recalled.

Catalini noted the irony: today, open networks are developing compliance tools native to blockchain that could have addressed these concerns more effectively than traditional frameworks. But back then, Libra was forced to strip away decentralization, a change he described as an early signal of where corporate-led projects were heading.

His broader lesson was stark: “As long as there is a single throat to choke — or a committee of them — you can’t truly rewire the system. Worse, any network with an architect is living on borrowed time.”

Arc and Tempo in the Spotlight

Catalini placed Stripe’s Tempo and Circle’s Arc in that context. Both are new blockchains designed explicitly for payments, promoted as stablecoin-first infrastructure for enterprises and fintechs.

Circle launched Arc on Aug. 12, presenting it as a Layer-1 network purpose-built for stablecoin finance. Unlike public chains that rely on volatile gas tokens, Arc uses USDC for fees, offering predictable, dollar-denominated costs.

It integrates a built-in foreign exchange engine, promises sub-second finality, and includes opt-in privacy features. Circle said Arc will support cross-border payments, onchain credit systems, tokenized capital markets and programmable, automated payments.

Just weeks later, Stripe and Paradigm unveiled Tempo on Sept. 4, describing it as a payments-first blockchain capable of handling over 100,000 transactions per second.

The network is EVM-compatible, features a dedicated payments lane with support for memos and access lists, and allows users to pay both transactions and gas in any stablecoin. Stripe said early design partners include Visa, Deutsche Bank, Revolut, Nubank, Shopify, OpenAI, Anthropic and DoorDash.

Both projects were marketed as steps toward mainstreaming stablecoin payments. But for Catalini, they raised a deeper concern.

A Revolution or a Failed Coup?

Catalini argued that corporate-led chains like Arc and Tempo risk simply rebuilding the old financial system with new players in charge. Instead of displacing card networks and banks, he warned, they could elevate fintech giants to the same position of dominance. “The throne will have new occupants, but it will be the same throne,” he wrote.

He also predicted such networks would fracture geopolitically, with Western and Eastern blocs unlikely to share a single corporate-led infrastructure. The result, he said, would be competing financial empires rather than the borderless system crypto’s early advocates envisioned.

Ultimately, Catalini described Stripe’s Tempo as a “referendum on the ghost of Libra.” If it thrives, he suggested, it may prove Libra failed because of timing, not design — and show that the dream of open, permissionless money has been overtaken by more pragmatic, centralized solutions.



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September 7, 2025 0 comments
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WLFI, Justin Sun, Robinhood, S&P 500
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WLFI, Justin Sun, Robinhood, S&P 500

by admin September 7, 2025



From Justin Sun’s clash with World Liberty Financial over blacklisted wallets to Robinhood’s big leap into the S&P 500, the past seven days were packed with stories shaping the future of digital assets.

Treasury giants and exchanges staked their claims in Ethereum (ETH) and Bitcoin (BTC), regulators in the UK tightened oversight, and India once again topped the global adoption charts. Here’s a rundown of the headlines that moved the markets and sparked conversation.

Summary

  • WLFI froze Justin Sun’s wallet holdings after token transfers raised flags.
  • Sun called the freeze “unreasonable,” saying moves were portfolio shuffling.
  • Robinhood will join the S&P 500 Sept 22, shares surged past $108 on news.

World Liberty Financial controversy engulfs Justin Sun

  • The Trump-associated token project triggered widespread criticism after freezing wallets connected to Tron founder Justin Sun.
  • The project blocked access to 540 million unlocked tokens and 2.4 billion locked tokens
  • Platform administrators activated contract-level permissions to blacklist Sun’s addresses following a transfer of 50 million WLFI (WLFI) tokens worth $9.2 million on Sept. 4.
  • The freeze extended beyond the initial transfer. On-chain data revealed WLFI’s controlling address executed the guardianSetBlacklistStatus function after suspicious activity from HTX address “HTX 48” transferred nearly 60 million tokens to a Binance deposit wallet within 32 hours.
  • Sun defended his actions through multiple social media posts and stated the transfers were “routine deposit tests and portfolio shuffling, not sales.”
  • The Tron founder criticized the blacklisting as “unreasonable” and unjust, asserting that it violated blockchain transparency principles and investor fairness.
  • Despite the controversy, Sun announced Sept. 5 investment plans worth $10 million in both ALTS stock and additional WLFI tokens.

Robinhood achieves S&P 500 milestone

  • The trading platform will join the prestigious index on Sept. 22, causing shares to surge past $108 following the announcement from S&P Dow Jones Indices.
  • Robinhood’s inclusion alongside advertising technology firm AppLovin shows the index committee’s recognition of the company’s market capitalization and trading significance.

SharpLink Gaming explores Ethereum staking expansion

  • The treasury company plans to stake portions of its $3.6 billion Ethereum holdings on layer-2 network Linea following its Sept. 10 mainnet launch.
  • Co-CEO Joseph Chalom indicated the firm currently stakes nearly all holdings through custodians Anchorage and Coinbase.

Tether considers gold mining investments

  • Discussions concerning investments in the refining, trading, and royalty operations of the gold supply chain have been held between mining associations and the stablecoin issuer.
  • The investigation expands into physical commodity operations while remaining consistent with Tether’s current gold-backed token sales.

UK proposes stricter cryptocurrency rules

  • HM Treasury released draft money laundering regulation changes addressing loopholes and changing risks with stricter requirements for cryptocurrency businesses.
  • The proposed updates aim to create “a more risk-based, proportionate regime that is robust against financial crime whilst remaining workable for industry.”

India leads global cryptocurrency adoption rankings

  • Blockchain analytics firm Chainalysis ranked India first globally for the second consecutive year, surpassing other nations across all criteria, including retail centralized services, institutional adoption, and DeFi usage.
  • The United States climbed to second position from fourth place last year, driven by regulatory momentum and increased institutional participation.

Gemini targets $316.7 million IPO fundraising

  • The Winklevoss twins’ cryptocurrency exchange filed to raise up to $316.7 million through an initial public offering. They marketed 16.7 million shares at $17-19 each.
  • The New York-based exchange and custodian seeks public market access as another major cryptocurrency business pursues traditional capital markets.

Solana community approves Alpenglow upgrade

  • Network participants voted overwhelmingly in favor of the technical transformation with 98.27% approval from Solana (SOL) stakers, while only 1.05% opposed and 0.36% abstained.
  • Total participation reached 52% of network stakers, indicating strong community engagement in the governance process.

Strategy continues systematic Bitcoin accumulation

  • The treasury company acquired 4,048 Bitcoin for approximately $449.3 million at an average price of $110,981 per Bitcoin.
  • Total holdings reached 636,505 Bitcoin as of September 1, purchased for approximately $46.95 billion including all acquisition costs.



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September 7, 2025 0 comments
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Is Shiba Inu (SHIB) on Verge of 'God Candle'?
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Is Shiba Inu (SHIB) on Verge of ‘God Candle’?

by admin September 7, 2025


Once-popular meme coin Shiba Inu (SHIB) is sticking to its key support cushion at $0.00001159, and the way price action has been fading around this level suggests SHIB could be primed for something one may call a “God candle.”

The price of the meme cryptocurrency has been pressing into this support for weeks, with every dip getting absorbed fast, leaving behind a boring but stubborn floor that now became the last line before any “new zero” is added to SHIB’s price figure.

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On the daily time frame, the Shiba Inu coin’s price volatility has been on mute, candles have been shrinking, and the whole range has been tightening just at $0.00001159. What prompts special attention is how the RSI has been flashing bullish divergences, where the indicator lifts while the price drifts sideways or lower.

Source: TradingView

That mismatch is often the market’s way of saying that buyers load up while selling pressure is getting dryer, and when it happens near a defended base, the setup can quickly flip into a vertical move.

Sellers have tried to push lower through the summer, but each push ran out of energy as volumes thinned.

Shiba Inu (SHIB) price scenarios

On the upside, the first real test is stacked around $0.00001698, then $0.00002052, which marks the edge of the last failed rally. Clearing those levels would open space to $0.00002501 and potentially $0.00002970 — zones last touched during the strong rebound phases of 2024.

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Right now SHIB changes hands near $0.00001239, parked almost flat on its long-term base. It is the kind of spot where markets either slip quietly into further decline or rip straight out in a single oversized candle that earns the “God candle” label.



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September 7, 2025 0 comments
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Pepenode presale reaches $800k allows users to mine meme coins
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Explosive PepeNode Presale Reaches $800K: Memecoin Mining Is Here

by admin September 7, 2025


Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Pepenode’s presale just passed the $800K mark, following a surge in investor interest shortly after it started.

The project’s appeal comes from its mine-to-earn mechanics, which enable meme coin mining in a customized rig, but that’s not necessarily the innovative part.

The innovative part is that you get to craft your own rig yourself and customize its nodes for higher hashrate, energy, and rewards. It’s also quite advantageous that you don’t have to deal with high energy bills or need to upgrade your system to handle the higher mining throughput.

This makes Pepenode ($PEPENODE) extremely appetizing for investors who prefer to control the rewards they’re getting from a presale.

How Pepenode Changes the Way Crypto Mining Works

Crypto mining is a good way to boost your portfolio without investing in the assets themselves. Instead, you invest in building and refining your mining system to maximize output, lower energy costs, and decrease the wear on the mining rig itself.

Once you’ve figured those factors out, you’d have created a source of passive income.

Unfortunately, the mining business comes with severe limitations and problems which are baked into the system itself. These include the high costs associated with building the rig, the high electricity bills, and, last but not least, the lack of interactivity.

Pepenode addresses all these problems during its presale by turning mining into an engaging and rewarding activity with its mining simulator.

The process is simple: buy the nodes, build your virtual mining facility, upgrade it, and start earning.

The nodes are tiered, so you can upgrade them gradually to boost your facility’s mining output and energy efficiency.

Unlike traditional mining, Pepenode achieves two things: it makes crypto mining engaging and more accessible and drives investor engagement during presale.

You no longer need expensive, premium rigs, expertise, and extra capital to cover for the spicy electricity bills. Pepenode does everything for you, offering a sense of progression and rewarding proficient miners.

Pepenode is compatible with MetaMask, Trust Wallet, and WalletConnect and is currently only accessible via your web browser. The mobile version will release after the public launch.

The mining platform also has a detailed dashboard showcasing the most important stats like hashrate and rewards, allowing you to keep track of your progress and performance.

Pepenode offers plenty of incentive to join the presale early on, including higher staking rewards for holders (1,786% now) and additional rewards in meme coins and other bonuses for top-performing miners.

Pepenode Presale Numbers and Roadmap

The Pepenode ($PEPENODE) presale is at over $800K right now with a token price of $0.0010491 and it’s gaining traction fast.

If you want to join in, now’s the perfect time given the early incentives, including the staking APY of 1,786%, which will drop the more investors join the staking pool.

The four-phase roadmap details a long-term developmental phase, with the Virtual Mining Simulator going live in Phase 3.

Phase 4 is the real kicker, since it introduces meme coin rewards like $PEPE and $FARTCOIN and allows for a more expansive customization process to make your mining rig more effective.

The coming partnerships with influencers and other meme projects will also help increase visibility and potentially drive Pepenode into the mainstream.

Based on Pepenode presale’s growth rate and scope, our price prediction for $PEPENODE considers a price point of $0.0023 by the end of 2025. By 2030, the token could reach $0.0244 with sufficient community support and involvement.

Should You Buy $PEPENODE?

Whether or not you should invest in $PEPENODE depends on your risk tolerance and investment strategy. However, Pepenode shows great long-term potential thanks to its mining simulator, which keeps investors engaged and rewards their loyalty with actual meme coin drops.

If you want to invest, you can read how to buy $PEPENODE right here and finalize your transaction on the official presale page.

But remember do to your own research. This is not financial advice.

Authored by Bogdan Patru, Bitcoinist – https://bitcoinist.com/pepenode-presale-reaches-800k-allows-users-to-mine-meme-coins

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.



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September 7, 2025 0 comments
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The silent quantum crisis that could undermine DeFi
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The silent quantum crisis that could undermine DeFi

by admin September 7, 2025



Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

Stablecoins are the backbone of the digital economy. They enable payments and trading, providing stability and efficiency on the blockchain. With institutional adoption on the rise and regulations improving following the passage of the  GENIUS Act, stablecoin markets appear stronger than ever.

Summary

  • Stablecoins face a looming quantum threat — current cryptography (RSA, elliptic curves) could be broken once quantum computers hit “Q-Day,” exposing billions in assets to instant theft.
  • The risk is urgent and underestimated — experts warn quantum machines may arrive within a decade, while finance is already preparing with quantum risk tools; yet crypto lags dangerously behind.
  • Blockchain immutability is a double-edged sword — stablecoins can’t easily swap out old cryptography, leaving dormant wallets and static addresses highly vulnerable.
  • The solution: quantum-safe cryptography + crypto-agility — lattice- or hash-based signatures, paired with upgradable infrastructure, can future-proof stablecoins against attacks.
  • Regulation is catching up — U.S. laws like the GENIUS Act, along with global standards from NIST, will soon require quantum resilience, making preparedness a competitive and compliance necessity.

However, the financial world faces a quantum disaster. While billions flow through stablecoins, few in the crypto sector discuss the quantum crisis that could wipe out stability overnight. If we don’t act now to create quantum-proof stablecoins, the entire digital asset economy could collapse with one breakthrough. Beneath the success of digital assets lies a threat: quantum computing.

While stablecoin issuers celebrate compliance and innovation, many remain vulnerable to the growing risk of quantum attacks. The cryptography that stablecoins rely on, such as elliptic curves and RSA signatures, could be susceptible to attacks from quantum machines. National security agencies and cybersecurity experts have warned about this, urging critical infrastructure to start transitioning to post-quantum cryptography before 2030. Once quantum computers reach “Q-Day”, the day they can break current public-key cryptosystems, any stablecoin using old cryptography would be at risk of immediate attack. It’s estimated that unchecked quantum computing could lead to up to $3.3 trillion in indirect financial losses due to vulnerabilities in infrastructure. 

Given the global scale of stablecoins, with billions in daily volume, they represent an attractive target. However, there is a solution to “future-proof” stablecoins today. 

Future-proofing stablecoins 

Quantum preparedness is now a hot topic in global finance. However, the crypto sector is lagging in this discussion. By 2026, 65% of banks and 70% of hedge funds are expected to utilize quantum risk modeling tools. Almost half of global CFOs see quantum technology as vital for their long-term strategies. These trends show an urgent need for quantum-safe solutions. They also highlight the importance of strengthening the core cryptography in financial systems.

The quantum threat is closer than many think. Experts predict that powerful quantum computers, capable of breaking current cryptographic standards, could emerge within a decade or even sooner. Recent market research indicates that the global quantum computing market is expected to grow from $1.68 billion in 2025 to nearly $30 billion by 2034. This growth reflects rapid technical advancements and increasing investments from both the government and private sectors. 

However, stablecoins face unique risks. The immutability of blockchain means that tokens can’t be easily altered with new cryptography after launch. This immutability is a double-edged sword. It ensures that history remains unchanged, but also means cryptographic flaws cannot be easily repaired. As quantum technology advances, dormant or legacy wallets and static addresses may become vulnerable. Without upgrades, billions in value may be susceptible to theft. 

Why quantum could break stablecoins…sooner than you think 

The time to future-proof stablecoins is now. Strong issuers must quickly adopt quantum-resistant cryptography. They should use advanced signature schemes, such as lattice-based or hash-based cryptography, to protect against attacks. These types of cryptography are considered “quantum-safe.” Unlike older systems such as RSA or elliptic curve cryptography, no known or expected quantum algorithm can efficiently break them. 

This makes them the best choice for securing digital money in a quantum future. Quantum computers can solve the math problems behind elliptic curves and RSA cryptography, which stablecoins currently use. This means digital signatures could be broken almost instantly when powerful quantum machines become available. Since public keys are always exposed on blockchains, a quantum-equipped attacker could swiftly compute private keys. This would allow unauthorized transactions across entire token networks.

However, technical upgrades alone are not enough. Stablecoins should be designed with “crypto-agility.” Their infrastructure must allow seamless upgrades to security and enable protocols to adapt quickly as quantum standards change. This should happen without migration risks or disruptive forks. 

Regulatory readiness is also crucial. As central banks and global agencies accelerate the development of quantum-readiness roadmaps, stablecoin issuers can expect new certification standards and deadlines for demonstrating quantum-safe compliance. Landmark legislation in the U.S., especially the GENIUS Act, has created the country’s first comprehensive federal regulatory framework for stablecoins. It mandates that all issuers wanting to operate in the U.S. must meet oversight, transparency, and compliance requirements. 

The regulatory language has focused on solvency, consumer protection, and anti-fraud rules. Now, these standards are changing fast. They’re starting to incorporate tech resilience, such as quantum-safe cryptography. The U.S. National Institute of Standards and Technology (NIST) and other agencies are finalising new post-quantum cryptographic standards. Many regulators will likely need these standards for all high-value digital asset systems by 2030. The GENIUS Act allows regulators to create additional rules and capital requirements for risk management. This will help set clear quantum-readiness benchmarks in future guidance and rules. 

Planning for these changes will help reduce systemic risks. The stablecoin sector is interconnected and high-value. A single point of failure could harm global market trust. Being unprepared is not an option. 

The rise of programmable stable-value tokens in digital economies makes addressing quantum risk even more urgent. This is not just a guess; it’s a challenge that needs proactive, industry-wide action to tackle the $3.3 trillion in potential exposure. Stablecoins that treat post-quantum infrastructure as a baseline, utilize quantum-safe cryptography, and are designed for crypto-agility will set the new gold standard for digital money. Future-proofing stablecoins means ensuring trust and resilience in the quantum age. Those who lead on quantum security today may set the standards and enjoy the rewards, becoming the architects of a safer financial future. 

Chase Ergen

Chase Ergen is an entrepreneur and strategic advisor at the intersection of telecommunications and decentralized finance. With early exposure to the satellite industry as the son of Dish Network and EchoStar (NASDAQ: SATS) founder Charlie Ergen, he has built a career connecting legacy infrastructure with emerging digital technologies. He currently serves on the Board of Directors at DeFi Technologies Inc., advising on institutional strategy and digital asset market growth. He is also Executive Director of the Make America Wealthy Again (MAWA) Super PAC, where he advocates for innovation-focused policy and financial inclusion. Ergen brings two decades of experience in satellite and telecommunications, with strategic involvement in 5G development, blockchain infrastructure, and fintech policy. His work is driven by a commitment to building accessible, transparent, and future-ready financial systems.



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September 7, 2025 0 comments
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UK Regulators Draft New AML Rules for Crypto Firms

by admin September 7, 2025



In brief

  • The draft legislation attempts to  close loopholes and updates rules for evolving risks.
  • The new change-in-control threshold for crypto firms would be lowered to 10%.
  • A consultation will be open until September 30, with regulations to be put before Parliament in early 2026.

The UK’s HM Treasury released a draft of proposed changes to current money laundering regulations this week that address loopholes and evolving risks, including stricter requirements for crypto businesses.

“[The updates aim] to deliver a more risk-based, proportionate regime that is robust against financial crime whilst remaining workable for industry,” according to the draft document.

“The government has also committed to improve sectoral guidance on AML/CTF compliance on a range of issues, and to publish separate guidance on the use of digital identity verification for AML/CTF purposes.”

AML and CTF are finance industry shorthand for anti-money laundering and counter-terrorist financing.

The release follows a public consultation in 2024, which highlighted weaknesses in the UK’s regime linked to pooled client accounts, trust registration, crypto business oversight and challenges in customer due diligence.

The risks are significant, according to the National Risk Assessment of Money Laundering and Terrorist Financing report published in July. It found the UK remains highly exposed due to its large and open economy.

Meanwhile, the Home Office’s Economic Crime Survey 2024 estimated that 2% of UK businesses—around 33,500—had experienced known or suspected money laundering in the prior year. The survey found that fraud, much of it cyber-enabled and linked to overseas actors, now accounts for more than 43% of all crime in England and Wales.

Within this landscape, crypto assets are increasingly a concern. A Financial Conduct Authority, or FCA, survey in 2024 found 12% of UK adults owned cryptoassets, and law enforcement has noted their growing role in laundering schemes, often through service providers outside the UK.

The new draft regulations propose several changes for crypto firms. The Financial Conduct Authority will apply a broader “fit and proper” test to firm controllers, replacing the current beneficial owner test, to ensure oversight captures complex ownership structures.

Other provisions will lower the threshold for change-in-control notifications from 25% to 10%, aligning with the Financial Services and Markets Act (FSMA) regime.

This means any party acquiring a 10% or greater stake — or significant influence — must notify the FCA.

Additional amendments cover customer due diligence, trust registration, correspondent banking restrictions and technical updates such as converting thresholds from euros to sterling.

The Treasury is inviting feedback on the draft until September 30, before finalizing the regulations for Parliamentary consideration in early 2026.

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September 7, 2025 0 comments
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Belarus President Aleksandr Lukashenko speaking in December 2024
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Congress Is Back From Break

by admin September 7, 2025



Here’s what we’re looking for now that Congress is back from summer recess and we enter the final four months of 2025.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

Welcome to the last four months of 2025. Here’s what we’re looking for in the final third of this year.

Why it matters

Crypto already got one major bill this year — the GENIUS Act addressing stablecoins — but the bigger market structure bill remains a work-in-progress. Congress is back from summer recess but there are other issues it has to deal with, including a funding bill deadline at the end of the month.

Breaking it down

In the legislative branch, all eyes are on market structure legislation. While the House of Representatives passed the Digital Assets Market Clarity Act (Clarity Act) with overwhelming bipartisan support earlier this year, the Senate has so far gone its own route, with the Senate Banking Committee publishing multiple drafts defining “ancillary assets” and working toward creating guidelines for the broader crypto sector.

While the Banking Committee has published several drafts — including one late Friday — the Senate Agriculture Committee has not yet gone that far. Any legislation will need support from both committees, given the Banking Committee oversees the Securities and Exchange Commission and the Agriculture Committee oversees the Commodity Futures Trading Commission.

Moreover, this bill will need bipartisan support, given the 60-vote threshold it will need to advance out of the Senate. Banking Committee Chairman Tim Scott set a Sept. 30 deadline for passage, but it’ll be a heavy lift, given the myriad other concerns the Senate has right now.

The federal regulators, for their part, are also moving swiftly. On Tuesday, the Securities and Exchange Commission and Commodity Futures Trading Commission published a joint statement on spot trading of crypto by registered firms, saying these companies should ask the regulators for guidance but that certain assets were okay to trade (though it did not name these assets).

On Thursday, the SEC published a public agenda addressing its near-term priorities with a number of crypto-related action items. The SEC aims to propose a rule on selling crypto assets by April, as well as possibly address a safe harbor.

And on Friday, the SEC and CFTC published a joint statement announcing they would continue working to “harmonize” their efforts around crypto regulation. To that end, there will be a joint roundtable on Sept. 29.

Wednesday

  • 12:00 UTC (8:00 a.m. ET) CoinDesk is holding a policy and regulation event in Washington, D.C. Come say hi.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!



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September 7, 2025 0 comments
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ETH to $5,000 Cancelled? Key Market Signal Just Emerged
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ETH to $5,000 Cancelled? Key Market Signal Just Emerged

by admin September 7, 2025


Ethereum neared the $5,000 mark in late August, but its rally stopped short, however reaching an all-time high of $4,955 on Aug. 24.

Since this date, Ethereum has fluctuated in a range between $4,209 and $4,797, with the price failing to reach $5,000.

At the time of writing, ETH was trading down 3.67% in the last 24 hours to $4,295 as crypto markets fell after an initial rise in response to weak U.S. job growth that had sparked hopes for a September rate cut.

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As the market awaits the next major move, analysts are hinting at indications that Ethereum might have formed a local top, beyond which upside momentum might not be feasible in the short term.

ETH Futures Under Pressure 🧨

Net Taker Volume is heavily skewed: sellers are hitting the bid with $570M more than buyers.

Historically, this level of aggressive selling has appeared near local tops. pic.twitter.com/4yqqztiRcj

— Maartunn (@JA_Maartun) September 6, 2025

According to Maartunn, a community analyst at CryptoQuant, ETH futures remain under pressure. This is as net taker volume is heavily skewed with sellers hitting the bid with $570 million more than buyers. Maartunn added that historically, this level of aggressive selling has appeared near local tops.

Ethereum ETFs see outflows

On Sept. 5, Ethereum spot ETFs saw total net outflows of $447 million, the second-largest in history and reversing a month-long trend of major inflows. Bitcoin spot ETFs recorded total net outflows of $160 million, with none of the 12 ETFs posting net inflows.

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According to Glassnode, over 50% of Ethereum ETF inflows have coincided with rising CME open interest, suggesting that TradFi activity might not be purely directional. This might suggest a blend of outright exposure and arbitrage strategies as ETH trades below local highs.

In recent news, an Ethereum ICO participant has staked 150,000 ETH worth $656 million after being dormant for eight years. The participant received 300,000 ETH for $93,300 at the time of the ICO.





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Quality data, not the model
NFT Gaming

Quality data, not the model

by admin September 7, 2025



Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.

AI might be the next trillion-dollar industry, but it’s quietly approaching a massive bottleneck. While everyone is racing to build bigger and more powerful models, a looming problem is going largely unaddressed: we might run out of usable training data in just a few years.

Summary

  • AI is running out of fuel: Training datasets have been growing 3.7x annually, and we could exhaust the world’s supply of quality public data between 2026 and 2032.
  • The labeling market is exploding from $3.7B (2024) to $17.1B (2030), while access to real-world human data is shrinking behind walled gardens and regulations.
  • Synthetic data isn’t enough: Feedback loops and lack of real-world nuance make it a risky substitute for messy, human-generated inputs.
  • Power is shifting to data holders: With models commoditizing, the real differentiator will be who owns and controls unique, high-quality datasets.

According to EPOCH AI, the size of training datasets for large language models has been growing at a rate of roughly 3.7 times annually since 2010. At that rate, we could deplete the world’s supply of high-quality, public training data somewhere between 2026 and 2032.

Even before we reach that wall, the cost of acquiring and curating labeled data is already skyrocketing. The data collection and labeling market was valued at $3.77 billion in 2024 and is projected to balloon to $17.10 billion by 2030.

That kind of explosive growth suggests a clear opportunity, but also a clear choke point. AI models are only as good as the data they’re trained on. Without a scalable pipeline of fresh, diverse, and unbiased datasets, the performance of these models will plateau, and their usefulness will start to degrade.

So the real question isn’t who builds the next great AI model. It’s who owns the data and where will it come from?

AI’s data problem is bigger than it seems

For the past decade, AI innovation has leaned heavily on publicly available datasets: Wikipedia, Common Crawl, Reddit, open-source code repositories, and more. But that well is drying up fast. As companies tighten access to their data and copyright issues pile up, AI firms are being forced to rethink their approach. Governments are also introducing regulations to limit data scraping, and public sentiment is shifting against the idea of training billion-dollar models on unpaid user-generated content.

Synthetic data is one proposed solution, but it’s a risky substitute. Models trained on model-generated data can lead to feedback loops, hallucinations, and degraded performance over time. There’s also the issue of quality: synthetic data often lacks the messiness and nuance of real-world input, which is exactly what AI systems need to perform well in practical scenarios.

That leaves real-world, human-generated data as the gold standard, and it’s getting harder to come by. Most of the big platforms that collect human data, like Meta, Google, and X (formerly Twitter), are walled gardens. Access is restricted, monetized, or banned altogether. Worse, their datasets often skew toward specific regions, languages, and demographics, leading to biased models that fail in diverse real-world use cases.

In short, the AI industry is about to collide with a reality it’s long ignored: building a massive LLM is only half the battle. Feeding it is the other half.

Why this actually matters

There are two parts to the AI value chain: model creation and data acquisition. For the last five years, nearly all the capital and hype have gone into model creation. But as we push the limits of model size, attention is finally shifting to the other half of the equation.

If models are becoming commoditized, with open-source alternatives, smaller footprint versions, and hardware-efficient designs, then the real differentiator becomes data. Unique, high-quality datasets will be the fuel that defines which models outperform.

They also introduce new forms of value creation. Data contributors become stakeholders. Builders have access to fresher and more dynamic data. And enterprises can train models that are better aligned with their target audiences.

The future of AI belongs to data providers

We’re entering a new era of AI, one where whoever controls the data holds the real power. As the competition to train better, smarter models heats up, the biggest constraint won’t be compute. It will be sourcing data that’s real, useful, and legal to use.

The question now is not whether AI will scale, but who will fuel that scale. It won’t just be data scientists. It will be data stewards, aggregators, contributors, and the platforms that bring them together. That’s where the next frontier lies.

So the next time you hear about a new frontier in artificial intelligence, don’t ask who built the model. Ask who trained it, and where the data came from. Because in the end, the future of AI is not just about the architecture. It’s about the input.

Max Li

Max Li is the founder and CEO at OORT, the data cloud for decentralized AI. Dr. Li is a professor, an experienced engineer, and an inventor with over 200 patents. His background includes work on 4G LTE and 5G systems with Qualcomm Research and academic contributions to information theory, machine learning and blockchain technology. He authored the book titled “Reinforcement Learning for Cyber-physical Systems,” published by Taylor & Francis CRC Press.



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