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OpenAI Accused of Illegally Muzzling Employee Concerns

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4 months ago

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Whistleblowers have filed a complaint with the Securities and Exchange Commission (SEC), accusing OpenAI of unlawfully restricting employees’ reporting of safety concerns.

OpenAI Accused of Illegally Muzzling Employee Concerns

In a whistleblower’s letter, OpenAI is alleged to have given employees, severance, and nondisclosure agreements that are overly oppressive.

These agreements supposedly contained provisions that could lead to consequences if employees complained about OpenAI to the federal regulators.

The letter addressed to the SEC commissioner, was sent earlier this month, stated that OpenAI forced its employees to relinquish their federal rights to whistleblower rewards and to obtain permission from the company before reporting information to federal regulators.

Violation of Federal Whistleblower Protections

The whistleblowers noted that the agreements violated the federal laws that are meant to shield persons who may wish to report corporate fraud and other related vices without revealing their identities, and without fear of being fired. 

In addition, another whistleblower, who chose to remain unnamed, highlighted the potential negative impact of such contracts on the employees’ willingness to report the risks of AI technology.

OpenAI spokesperson Hannah Wong said,

“Our whistleblower policy allows employees to make protected disclosures, and we think it is critical to have a serious discussion about this technology; as a result, we have adjusted our departure policies to eliminate nondisparagement clauses.”

Growing Concerns Over AI Safety

The concern was voiced against the backdrop of the transformations OpenAI has gone through in recent years, specifically, concerns regarding the organization’s shift from a nonprofit with the primary focus on people’s well-being to a company that prioritizes profit over safety. Moreover, there are claims that OpenAI released the new model of its AI without following the required safety measures, and this was done hastily.

Subsequently, this has led to concerns about the negative impact of AI, including its use in developing biological weapons or cyber attacks.

Senator Chuck Grassley said,

“OpenAI’s policies and practices seem to deter whistleblowers from reporting and receiving proper remuneration for their protected disclosures.”

Grassley highlighted the role of whistleblowers in assisting the federal government in mitigating risks associated with AI.

Sam Altman’s Stance

According to Coingape, OpenAI CEO Sam Altman had provided clarification on exit agreements in May amid increasing scrutiny.

This comes as several employees resigned from the company, including Jan Leike, who claimed that the company was shifting from AI safety to product development. 

OpenAI CEO clarified that a clause in previous exit papers concerning possible equity cancellation was a mistake. In addition, he said that OpenAI has never imposed this clause and reiterated that the vested equity is safe even in case of termination of this agreement.

Read Also: JPMorgan and Wells Fargo In Billions Of Bad Debts, Will Feds Step In

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





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Cardano Founder Charles Hoskinson Confirms Crypto Advisor Role Under Donald Trump

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3 hours ago

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November 10, 2024

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Cardano Founder Charles Hoskinson has confirmed plans to collaborate with the U.S. government under Donald Trump to help shape crypto legislation. The goal is to create clear regulatory frameworks for the cryptocurrency industry, which has faced years of uncertainty and regulatory challenges.

Charles Hoskinson revealed these plans during a recent address, where he emphasized the need for bipartisan support in developing crypto-friendly policies. This development comes as Cardano, along with other major blockchain networks like Bitcoin, faces ongoing regulatory scrutiny from U.S. agencies.

Cardano Founder Charles Hoskinson Crypto Advisor Role

Hoskinson stated that his company, Input Output Global (IOG), will establish a dedicated policy office to focus on crypto regulation. The office will work to integrate aspects of the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Responsible Financial Innovation Act (RFIA) into a comprehensive legislative proposal. “I will work with lawmakers and the administration to get a bipartisan bill passed,” he said.

The Cardano founder highlighted the importance of cooperation across party lines, pointing out that the recent FIT21 bill passed in the House with over 60 Democrat votes, indicating growing support for bipartisan crypto legislation.

Charles Hoskinson’s statement also acknowledged the potential influence of a Republican-controlled Senate, House, and presidency in the coming years. He expressed optimism that the political environment could present an opportunity for the crypto industry to secure much-needed regulatory clarity. He remarked,

“This is the best opportunity we have ever had in the history of the industry to get clarity.”

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





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Bitcoin Fog Founder Sentenced To 12.5 Years for $400M Crypto Laundering Scheme

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1 day ago

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November 9, 2024

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Bitcoin Fog founder Roman Sterlingov has been sentenced to 12.5 years in prison for operating a major cryptocurrency mixing service that laundered over $400 million in criminal proceeds. 

The Washington federal court ruling was handed down by U.S. District Judge Randolph Moss, who also ordered the forfeiture of $395 million in assets, including seized cryptocurrency and Sterlingov’s interest in a Bitcoin wallet with over $103 million in Bitcoin.

Bitcoin Fog Founder Sentenced To 12.5 Years

Roman Sterlingov, a Russian-Swiss national, was convicted of multiple charges related to operating Bitcoin Fog, a cryptocurrency “mixer” that obscured the origins of digital currency transactions. The prosecution stated that Bitcoin Fog was a convenient way for criminals to launder the money obtained from criminal activities, including those related to narcotics on the darknet markets.

After a jury trial in March, Sterlingov was found guilty of conspiring to launder money, money laundering, and operating an unregistered money transmitting business.

Bitcoin Fog allowed users to combine or “mix” digital assets, making it harder to trace individual transactions. Prosecutors said that Sterlingov’s service functioned for approximately ten years and had aimed to enable untraceable transactions to support money laundering activities on an extensive scale.

Principal Deputy Assistant Attorney General Nicole M. Argentieri said that Roman Sterlingov “laundered over $400 million in criminal proceeds through Bitcoin Fog” and noted that the sentence demonstrates the Justice Department’s efforts to prosecute those who facilitate criminal conduct.

Judge Considers Deterrence in Sentencing

Judge Randolph Moss imposed a 12.5-year sentence, which was substantially less than the 30 years requested by the prosecution for the Bitcoin Fog founder. Prosecutors had argued for a severe penalty due to the prolonged and extensive nature of the scheme. “This is criminal activity of a staggering scale over a prolonged period of time,” said prosecutor Christopher Brown. 

Nonetheless, Judge Moss said that a life sentence is excessive given the offense, although he emphasized the need for a significant deterrent in the cryptocurrency sector given that it is often difficult to follow the funds.

Roman Sterlingov said during the sentencing hearing, “I am sorry for any harm that may have come from my actions.” The defense had requested the judge to impose a maximum of 7.5 years saying there was no direct proof of Sterlingov contributing to the running of the Bitcoin Fog. Concurrently, Sterlingov’s attorney, Tor Ekeland, argued that there were no service logs or eyewitness statements that would have placed his client in control of the mixing service.

Recent Sentences In The Crypto Industry

The sentencing of Sterlingov comes amid scrutiny of the crypto industry, as other high-profile cases involving fraud and money laundering unfold.

Recently, Caroline Ellison, former CEO of Alameda Research, received a two-year prison sentence for her role in the FTX fraud, which defrauded investors out of billions. 

In that case, key witnesses, including Ellison and former FTX engineer Nishad Singh, received lighter sentences or avoided prison time by cooperating with prosecutors against FTX founder Sam Bankman-Fried.

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





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Richard Farley Is Top US SEC Chair Candidate For Donald Trump: Report

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1 day ago

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November 8, 2024

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Richard Farley, a Wall Street lawyer known for his work in leveraged finance, is reportedly under consideration to lead the Securities and Exchange Commission (SEC) in the upcoming Trump administration.

Farley, a partner at the New York law firm Kramer Levin Naftalis & Frankel, has experience representing major financial institutions, including Goldman Sachs, Credit Suisse, and UBS, according to sources familiar with the matter.

Richard Farley’s Background and Connections 

Richard Farley has earned his place in Wall Street mainly due to his expertise and experience in financing related activities especially those involving banks and other financial institutions. He is also the co-head of the Kramer Levin’s Leveraged Finance Group where he has advised on a number of matters relating to private credit firms.

In 2017 Farley acted for Cantor Fitzgerald in a share sale of Sorrento Therapeutics. Cantor’s CEO, Howard Lutnick is a key member of Trump’s transition team for personnel and can therefore help Farley’s chances of being appointed as chairperson of SEC.

Not only does Richard Farley have a successful career, he also has personal relationships within the Republican party. His wife, Chivacci “Chele” Farley has been the GOP finance chairman for New York City and has also vied for political office as a republican. Farley, who used to be enrolled in the Democratic Party, has apparently endorsed GOP in recent years. He is also a longtime friend of Robert F. Kennedy Jr., a Trump supporter who recently announced his interest in serving in the new administration’s cabinet.

Donald Trump’s Priorities for the US SEC Under New Leadership

The current US SEC Chair Gary Gensler is apparently among the officials that the Trump team wants to get rid of. Gensler, who has come under fire from some in the financial industry, has one and a half years remaining in his term, which is currently scheduled to conclude in June 2026. 

However, Trump’s team has already signalled that they intend to appoint a new chair at the beginning of the new administration. Chris Iacovella, the Chief Executive Officer of the American Securities Association, has announced that Gensler’s exit from the Securities and Exchange Commission would improve the confidence in the same organization among the retirees, small business persons, and the working class.

The Trump team has apparently considered reshaping the SEC to return to its core mission that is consumer protection. This will be a change from Gensler’s style, which has been criticized by some as aggressive, particularly with regard to virtual currency regulation.

Farley’s Views and Possible Direction on Cryptocurrency

Richard Farley has not publicly commented on his views regarding cryptocurrency regulation, but the Trump transition team has indicated a preference for an SEC chair who is “pro-crypto.”

Republican SEC Commissioner Mark Uyeda, who could serve as acting chair until a permanent replacement is appointed, has expressed the need to end what he described as the SEC’s “war on crypto.” Uyeda suggested that enforcement actions against firms solely for failing to register, without allegations of fraud, should be paused until clearer regulatory guidelines are established.

Uyeda stated that “the Commission’s war on crypto must end,” adding that the next SEC chair under Trump would likely prioritize creating a more defined regulatory framework for digital assets.

Alongside Richard Farley, other names being considered for the US SEC chair position include Dan Gallagher, Robinhood’s Chief Legal Officer and a former SEC commissioner; Chris Giancarlo, former chair of the Commodity Futures Trading Commission and known as “CryptoDad” for his favorable stance on digital assets; and current SEC Commissioner Hester Peirce. 

Gallagher’s candidacy has been supported by some in the crypto community, who view him as favorable to the industry’s growth and regulatory clarity.

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

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





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