Chile Officially Declares its Intention to Lead AI Governance in Latin America

Leonardo Perez
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Chile Officially Declares its Intention to Lead AI Governance in Latin America

Chile has officially taken the lead in AI governance throughout Latin America thanks to the Santiago Declaration. The Santiago Declaration 2023 brought together ministers and those in charge of digital policies on AI from the Latin American region. This Declaration signed in Chile by 20 Latin American countries reflects their commitment to ethics in AI. It is based on UNESCO’s Recommendation on the Ethics of Artificial Intelligence.

Chile has taken the lead in AI governance throughout Latin America. In a historic meeting organized by the Ministry of Science, UNESCO and the Development Bank of Latin America and the Caribbean, 20 nations in the region signed the “Santiago Declaration to promote ethical Artificial Intelligence in Latin America and the Caribbean.”

This agreement highlights the region’s commitment to the responsible development and implementation of Artificial Intelligence (AI).

Latin American Ministers Meet in Chile to Discuss AI

The event brought together ministers and those in charge of digital and AI policies from Argentina, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Jamaica, Mexico, Peru, Paraguay, Dominican Republic, Santa Lucia, Saint Vincent and the Grenadines, Suriname, Uruguay and Venezuela.

Despite the number of countries, and as stipulated in the now recent Declaration of Santiago, Chile will be the country to lead the working group on AI governance in Latin America:

“For the above, WE HAVE DECIDED: To elect the Republic of Chile to head the Working Group, and are requested to convene a working meeting during the first half of 2024. To facilitate this process, the countries commit to the designation of a focal point.”

The importance of this union lies in the opportunity to work as a block to advance on AI together, both in its use and in the ability to create and make strategic decisions.

The Minister of Science, Technology, Knowledge and Innovation, Aisén Etcheverry, led the meeting and underlined the uniqueness of this regional collaboration:

“That is something that did not happen with the internet or when we started with machine learning and is now happening with AI. That is unique and gives us an opportunity as countries to advance at a very different speed and be actors not only from the use, but from the ability to create and decide where to move forward.”

In addition, Etcheverry emphasized the importance of AI governance at the global level and mentioned that the United Nations will present a proposal in this regard in December.

Ensuring that Latin American countries in addition to Chile can join as a block in these conversations is something historic and its continuity would allow the region to play a relevant role in global decision-making around AI.

What Does the Santiago Declaration Mean for the Development of AI in Latin America?

Santiago Declaration 2023, signed by the 20 countries, reflects their commitment to ethics in AI. It is based on the UNESCO Recommendation on the Ethics of Artificial Intelligence, and it establishes a starting point for public policies on AI, as well as for the protection of human rights as a whole. This includes aspects such as safety and security, equity and non-discrimination, gender equality, accessibility and sustainability in all its aspects: social, cultural, economic and environmental.

The declaration signed in Chile represents a milestone in the responsible development of AI in Latin America and the Caribbean. It marks the way towards a future in which technology is at the service of society, while respecting ethical values ​​and people’s fundamental rights.

By Leonardo Pérez

SkyBridge Founder: “Sam Bankman-Fried Will ‘Be Skinned Alive’ When He Speaks in His Criminal Trial”

Audy Castañeda
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SkyBridge Founder: “Sam Bankman-Fried Will ‘Be Skinned Alive’ When He Speaks in His Criminal Trial”

Anthony Scaramucci, founder and managing partner of SkyBridge Capital, expressed his opinion regarding the controversial SBF case.

On October 25, 2023, Anthony Scaramucci, former White House Communications Director and founder and managing partner of SkyBridge Capital, appeared on CNBC’s “Last Call” (hosted by Brian Sullivan) to share his thoughts on the ongoing criminal trial by Sam Bankman. Fried (SBF), former CEO of defunct crypto exchange FTX.

First Impressions

For starters, Scaramucci humorously commented that the main thing he learned from law school was to avoid becoming a lawyer. He added that he felt lucky not to be one.

Next, making an analogy, Scaramucci compared Bankman-Fried’s situation to going down the alpine slide at the infamous Action Park (this was a water and amusement park located in Vernon Township, New Jersey, United States, on the grounds of Vernon Valley/Great Gorge ski resort) without brakes, suggesting the former CEO is headed toward a dangerous situation.

He emphasized that SBF might think it can outsmart prosecutors, but these legal professionals have vast experience and will likely point out inconsistencies in SBF’s testimony. This decision, Scaramucci believes, will only increase the length of SBF’s potential sentence.

Scaramucci expressed concern about the negative impact of this test on the crypto industry. He refuted claims by figures such as Senator Elizabeth Warren that cryptocurrencies such as Bitcoin are being used to finance illicit activities, emphasizing Bitcoin’s transparency. Scaramucci said Bankman-Fried’s actions have cast a shadow over the industry, but he remains hopeful that these challenges will soon pass.

Sullivan and Scaramucci also discussed Michael Lewis’s recent book (“Going Infinite: The Rise and Fall of a New Tycoon”) about Bankman-Fried. Sullivan says that although SBF seemed like a modest person who often wore shorts and T-shirts, the impression he got from reading the book was that SBF was an arrogant person who thought he was always the smartest person in the room.

Such arrogance could be the reason SBF is willing to testify at his own trial. Scaramucci said that Lewis never thought SBF was arrogant when he was writing the book (which he started before the collapse of the FTX empire).

Changing Public Perception

Scaramucci noticed a change in public opinion on Bankman-Fried. Previously, SBF was seen as a generous individual committed to donating his wealth to effective altruism. However, the co-conspirators’ revelations painted a different picture, hinting at deceit and malevolence. Scaramucci regretted having introduced Bankman-Fried to influential figures, such as heads of state, having previously believed in his good intentions. Scaramucci stressed that good scammers are usually experts at deception.

During a recent discussion on the “OPTO – Invest in Innovation” podcast, highlighted by The Block, Scaramucci expressed strong positive sentiment towards Bitcoin. He envisions Bitcoin evolving into a monumental $15 trillion asset, potentially eclipsing gold in its role as a store of wealth. However, he remains skeptical about it replacing traditional currencies as the global monetary standard.

Scaramucci highlighted Bitcoin’s inherent value and emphasized its potential to outperform gold. He noted that with Bitcoin’s finite supply of 21 million coins, its market capitalization could equate to a staggering price of more than $700,000 for each coin, a sharp increase from its current trading price of around $35,000.

Scaramucci revealed that while he remains bullish on the cryptocurrency, he does not foresee it becoming the dominant global currency. On a broader geopolitical scale, Scaramucci addressed the idea that nations resisting U.S. policies could lean toward trading Bitcoin or gold-backed digital currencies.

By Audy Castaneda

DCG Revenue Increases 23% As Court Formalizes Grayscale Victory

Leonardo Perez
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DCG Revenue Increases 23% As Court Formalizes Grayscale Victory

Digital Currency Group (DCG) reports a 23% increase in Q3 revenue, rising from $153 million in Q2 to $188 million in Q3, despite the decline in cryptocurrencies. DCG’s Grayscale Investments, the world’s largest Bitcoin fund, has won a legal battle that could potentially attract institutional Bitcoin inflows. The New York Attorney General has filed a $1.1 billion lawsuit against DCG, Genesis, and the Gemini exchange for defrauding Gemini customers.

Digital Currency Group (DCG) recorded a 23% increase in third-quarter revenue after repaying loans to its Genesis subsidiary. Its consolidated revenue increased from $153 million in the second quarter to $188 million in the third quarter despite falling cryptocurrency prices.

DCG’s earnings before interest, taxes, depreciation and amortization were $69 million. The company paid $225 million of the money it owes to Genesis, one of the first companies to build its business around lending money to crypto companies.

The Numbers Are Promising for DCG and Grayscale

The company’s encouraging figures are due to a rise in the price of Bitcoin to over $35,000. DCG’s Grayscale Investments, which operates the world’s largest Bitcoin fund, scored a legal victory that may attract institutional flows into Bitcoin, giving its parent and the market a boost.

Grayscale fought the US Securities and Exchange Commission (SEC) over the agency’s rejection of Grayscale’s application to convert a closed-end Bitcoin fund into an exchange-traded fund (ETF). The fund’s lack of a redemption mechanism means its share price has fallen below the net asset value of the underlying Bitcoin.

Since then, the expectation that the SEC will approve several ETFs has caused the discount to narrow. A royal approval could see Grayscale earn millions in management fees.

DCG and Genesis Blamed in New Lawsuit

Last week, New York Attorney General Letitia James sued DCG, Genesis, and the Gemini exchange for allegedly misleading and defrauding 230,000 Americans for a total loss of $1.1 billion. Specifically, the civil lawsuit is related to Gemini Earn, an investment product that was marketed to customers as a safe way to earn interest on cryptocurrencies, up to 8%.

Genesis and DCG have been accused of not evaluating the quality of the loans the former granted. They had also attempted to hide the losses suffered from their ill-calculated action. The CEOs of both companies are equally accused in the lawsuit of misleading the public about Genesis’ financial health.

DCG has vowed to challenge the allegations in court. “We assure you that we will vigorously defend against these claims and hope to be vindicated in this case.”

Genesis and Gemini also face SEC accusations of offering Gemini’s Earn products as unregistered securities. Genesis benefited from the difference between Earn Yield and its own interest rate. According to the investigation, Gemini Exchange, run by the Winklevoss twins, Cameron and Tyler, was found to have lied to investors about the risks involved in investing in the Earn program.

Additionally, assets contributed by Gemini clients were pooled and given to Genesis, the crypto lending subsidiary of Digital Currency Group. Genesis subsequently gave these funds to large institutions and only returned a fraction of the profits.

James discovered that at one point, these Genesis loans were even stressed and high risk. It was concentrated among a few third parties, including Alameda Research, the trading company associated with the now-defunct cryptocurrency exchange FTX.

By Leonardo Pérez

Genesis Bankruptcy Plan Revised for Orderly Liquidation of Assets

Audy Castañeda
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Genesis Bankruptcy Plan Revised for Orderly Liquidation of Assets

The successful resolution of Genesis’ bankruptcy has broader implications for the cryptocurrency industry. An organized liquidation that results in reasonable recoveries from creditors could help restore some of the lost confidence.

Cryptocurrency lender Genesis Global Capital filed a modified Chapter 11 bankruptcy plan on Wednesday, October 25, to resolve outstanding creditor claims and interests.

The revised plan is the result of extensive negotiations between Genesis, the Official Committee of Unsecured Creditors, cryptocurrency exchange Gemini, and the Genesis Ad Hoc Group of Lenders. While substantial agreement has been reached on key issues, discussions continue and all parties reserve their rights under the submission.

Modified Genesis Bankruptcy Plan

The amended plan classifies creditors’ claims against Genesis Global Holdco into 10 classes, with 4 classes of cryptocurrency-denominated unsecured claims divided by currency. The unsecured rights of Fiat, Bitcoin, Ethereum and other alternative cryptocurrencies would be harmed, giving them the right to vote on the plan.

Meanwhile, subordinate claims, government sanction claims and interest are seen rejecting the non-voting plan. The differential treatment of cryptoasset claims recognizes the divergent interests of Genesis’ creditors.

Under the proposed plan, Genesis entities would be liquidated by newly established “Liquidation Debtors” and overseen by a Plan Managing Officer, a new Board, and a Liquidation Oversight Committee. Liquidated debtors would liquidate assets to distribute to creditors according to agreed principles.

Segregated accounts would be established for plan distributions, including claims, professional fees, litigation, and liquidation reserves. Intercompany claims between Genesis Global Capital and Genesis Asia Pacific would be resolved to equal creditor recoveries.

Changes in corporate governance are also described, including the replacement of the entities’ boards of directors with the New Board. The causes of action would be preserved for possible action by the Liquidated Debtors.

The plan incorporates an intercompany claims agreement between Genesis Global Capital and Genesis Global Holdco, granting the former proceeds from the monetization of Genesis trading platform assets.

Genesis Chapter 11 Bankruptcy

Genesis had filed for Chapter 11 protection in November 2022, citing extreme market dislocation and loss of industry confidence following the collapse of crypto exchange FTX. The proposed plan aims to resolve its bankruptcy in an orderly manner.

Cryptocurrency lenders like Genesis experienced difficulties in 2022 as cryptocurrency market prices fell sharply. Lender Celsius Network also filed for bankruptcy last year.

Genesis creditors have divergent interests depending on whether the claims are denominated in fiat money, Bitcoin, or an alternative cryptocurrency. Ongoing discussions are likely to focus on balancing these competing priorities.

Genesis’ bankruptcy filing and reorganization plan represents the fallout from the “crypto winter” of 2022, which saw both prices and industry sentiment drop.

Genesis Says NY AG Lawsuit May Force “No Deal” Bankruptcy Liquidation

Genesis Global said on Tuesday that a civil fraud lawsuit in New York could lead to a bankruptcy liquidation that does not resolve its claims against parent company Digital Currency Group (DCG).

The lawsuit seeks to prohibit the three cryptocurrency firms from accessing the financial investment sector in New York, which would jeopardize their efforts to reach a long-term agreement.

Rather than wait for the outcome of the lawsuit, Genesis intends to propose a “no-deal” bankruptcy plan to distribute available crypto assets to customers and establish a process to preserve lawsuits against DCG and others, Genesis attorney Sean O’Neal said at a court hearing in New York.

By Audy Castaneda

Bitcoin Threatens to Displace Warren Buffett’s Berkshire Hathaway

Leonardo Perez
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Bitcoin Threatens to Displace Warren Buffett’s Berkshire Hathaway

Berkshire Hathaway, whose owners called Bitcoin “rat poison,” is about to be displaced by the cryptocurrency in capitalization.

Warren Buffett, the famous billionaire investor, has been one of the loudest critics of bitcoin and cryptocurrencies amid the United States’ “war” against these digital assets. Earlier this year, Buffett dismissed bitcoin as a “gambling chip” in an interview with CNBC, saying that bitcoin “has no intrinsic value… but that doesn’t stop people from wanting to play roulette.”

With the recent price surge, Bitcoin threatens to knock the Berkshire Hathaway firm out of the top 10 in the market capitalization ranking. If this movement takes place, it would be one of the most notable victories of the digital currency against its detractors.

Berkshire is often considered an indicator of economic health due to the expansive nature of its businesses, which range from railroads to electric utilities and retail. Berkshire’s owners, legendary investors Warren Buffett and Charlie Munger, are highly hostile to Bitcoin. These big names in the financial world do not miss the opportunity to attack the digital currency, which they disparagingly describe as “rat poison squared.”

Either way, rat poison is now approaching investors’ signature in terms of market capitalization. During the last hours, the crypto queen exchanged 11th place with billionaire Elon Musk’s company.

Bitcoin Threatens to Drop Berkshire from the Top 10 in Capitalization

The high chances of a Bitcoin spot ETF on the stock market fueled a rally in the coin’s price. In just 5 days the digital asset rose by 20%, which led to the market capitalization reaching $675 billion dollars.

Currently, the price of the coin is falling slightly to $33,900. However, investor enthusiasm seems lit and the rally is expected to continue going forward. In fact, some analysts believe that the crypto market is at the beginning of a bull run.

In any case, the price of BTC does not need to hit a new all-time high to take out Berkshire Hathaway. Bitcoin’s threat to displace Warren Buffett’s firm is much closer, given that it has a capitalization of $738 billion. This means that rat poison has Berkshire in its sights, and the next step could be Meta Platforms. The latter is relatively close to the reach of the pioneer cryptocurrency.

Influence of Cryptocurrencies in the Financial World Grows

The impending approval of a Bitcoin spot ETF by the SEC would be a major event. With this, the cryptocurrency would be placed on par with the rest of the financial assets that make life on the American stock market.

In that sense, the theories of Bitcoin’s detractors seem to turn into unfounded attacks that are refuted by the facts. Even though Bitcoin faced problems with a prolonged bear market, the strength of the coin and its underlying technology proved it to be a top-ranking asset.

With a spot ETF, large capital will be able to legally flow into the digital currency market and benefit from it. Thus, the current moments could be seen as a turning point that will mark a new stage for the crypto sector. In this new direction, institutional investors would join retail investors for greater balance and maturity.

Against this backdrop, Bitcoin threatens to displace not only Berkshire, but several of its main critics.

By Leonardo Pérez

World Bank Blockchain Bond Debut: Why It’s a Crucial Moment for Digital Assets

Audy Castañeda
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World Bank Blockchain Bond Debut: Why It’s a Crucial Moment for Digital Assets

The World Bank issued the world’s first digital bond in 2018.

The World Bank’s International Bank for Reconstruction and Development (IBRD) has taken a pioneering step in the field of blockchain and digital finance, spearheading an innovative issuance of digital native banknotes (DNN) worth €100 million. Facilitated by Euroclear’s cutting-edge distributed ledger technology (DLT) issuance platform, this monumental event has attracted significant attention across the global financial landscape.

The announcement of the blockchain bond listing on the Luxembourg Stock Exchange has marked an important milestone in the financial industry. In particular, Citi played a key role as issuing and paying agent, while TD Securities assumed intermediary responsibility. Euroclear Bank, which acts as a Central Securities Depository (CSD), solidified its central position in the transformation process, showing its commitment to blockchain and driving digital securities settlements.

Euroclear Entry into Digital Securities and Blockchain Settlement

In a strategic move that signals a paradigm shift in market dynamics, Brussels-based securities clearing giant Euroclear has revealed its foray into digital securities settlement services. According to a Reuters report, this fundamental step signifies the beginning of Euroclear’s journey towards integrating DLT into its operational framework.

By enabling clients to participate in the seamless initiation, dissemination and termination of fully digital international securities, Euroclear has firmly established itself as a key player in the digital transformation of financial market infrastructure.

Euroclear has also settled a digital bond from the World Bank worth 100 million euros (USD 106 million). This is the first step in the digital infrastructure strategy of the Brussels-based settlement chamber, as stated.

The three-year bond, called the digital native note, was issued by the World Bank’s lending arm, the International Bank for Reconstruction and Development, to raise funds for sustainable development. It was listed on the Luxembourg Stock Exchange and was completed on October 23.

Euroclear’s digital infrastructure is connected to its traditional platform for secondary operations and complies with the European Union Central Securities Depositories Regulation. Powered by R3’s Corda blockchain technology.

Traditional Market Structures Embrace Digital Transformation

The recent development underlines the growing inclination of traditional market structures, such as clearinghouses, to embrace the digital domain. This inclination has been further driven by the increasing openness of regulatory bodies towards emerging technologies.

The integration of DLT into the asset’s issuance represents an important leap forward for the Euroclear ecosystem, as highlighted by Lieve Mostrey, CEO of the Euroclear group. The shift towards a fully digital and data-driven financial market infrastructure marks a pivotal moment in Euroclear’s journey towards technological adaptation and innovation.

Global CSDs Position themselves for the Next Wave of Tokenization

In a notable industry trend, the world’s largest central securities depositories (CSDs) are preparing to secure their positions in the impending wave of tokenization. Recent developments indicate that the Depository Trust & Clearing Corporation (DTCC), Euroclear, and Clearstream are actively positioning themselves to play a major role in the institutional digital assets space.

With DTCC’s acquisition of Securrency and Clearstream’s successful issuance of over 1,000 digital securities on its D7 platform, the race to harness the potential of digital assets has intensified, signaling a transformative era for investors. global financial markets.

In an era marked by transformative technological advances and changing market dynamics, the World Bank’s IBRD, Euroclear and other key industry players are leading the charge towards a more secure and digitally integrated financial ecosystem.

By Audy Castaneda

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