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Bogus crypto hotshot duped court with AI-generated transaction records – DL News

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Bogus crypto hotshot duped court with AI-generated transaction records – DL News

  • Suspect reportedly used ChatGPT to fake crypto transaction history.
  • Man told court he owned $630,000, but actually had under $1 in his bank account.
  • Prosecutors say suspect operated a fake investment scheme worth $223,000.

Artificial intelligence is laying bare weaknesses in the South Korean court system after an alleged crypto fraudster used it to avoid criminal proceedings, critics claim.

Those critics are calling for the courts to overhaul their procedures to keep bad actors from getting away with their crimes.

The development comes as a fresh blow to the South Korean judiciary, which has recently come under fire from critics complaining of undue “leniency” in sentencing crypto fraudsters.

It also comes as experts warn that AI is enabling cybercriminals to steal even more crypto.

‘Identified with the naked eye’

The latest backlash against the courts comes after a man in his 20s managed to dupe legal professionals with falsified documents he reportedly generated using ChatGPT.

The case began when prosecutors investigated the man, who remains unnamed for legal reasons, on suspicion of running a $223,000 investment fraud scheme, the South Korean news agency Yonhap reported.

Prosecutors asked the court to issue an arrest warrant. The man responded by saying he planned to compensate victims, and produced a range of documents that appeared to prove he was a wealthy and successful individual.

These included “a record of cryptocurrency holdings and transactions,” prosecutors said. The man also presented the court with a certificate showing he had passed the national medical exam and a bank statement showing a balance of around $630,000.

After receiving these documents, the court decided against issuing the warrant. The only problem? All of them turned out to be fake.

“The defendant managed to deceive judges by sending the court AI-generated images that were so sophisticated that their inauthenticity could not be identified with the naked eye,” a prosecution official told Yonhap.

Systematic change needed

Prosecutors in the city of Busan said they only discovered something was amiss with the documents when they later conducted supplementary investigations.

They followed up by checking on his account status at his bank branch, where they discovered he had just $0.016 in his bank account.

Experts said the case has exposed a major loophole in the South Korean legal system and urged the government to respond.

“There is no system in place to screen out forged documents in court,” an anonymous former judiciary member told South Korean broadcaster MBC. “Rather than basing our legal system around the good faith assumption that no one would submit forged documents to a judge, we now need to make fundamental changes to the legal system.”

The man has since been arrested on additional charges of forgery and the use of falsified official records.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.

Hedera (HBAR) rises 6.7%, leading index higher

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Hedera (HBAR) rises 6.7%, leading index higher

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 1943.37, up 1.3% (+25.4) since 4 p.m. ET on Wednesday.

Seventeen of the 20 assets are trading higher.

Leaders: HBAR (+6.7%) and XLM (+4.2%).

Laggards: UNI (-1.9%) and BCH (-0.8%).

The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

YZi Labs is backing AI, biotech and Web3

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YZi Labs is backing AI, biotech and Web3

In a market where crypto cycles rise and fall while AI feels inevitable and biotech plays out over decades, YZi Labs is deliberately positioning itself across multiple technological frontiers.

The unifying thesis is “to focus on the things haven’t happened yet, and to focus on the people who are there to dream them up and to make it happen,” head of YZi Labs Ella Zhang said at Consensus Hong Kong 2026 on Thursday.

YZi, formerly Binance Labs, invests across AI, biotech and Web3, balancing time horizons, particularly as crypto “feels very cyclical at the moment,” while AI adoption accelerates, Zhang said.

“Focus on user demand. Is there real demand happen or the demand is imagined?” she said. Instead of chasing narratives, the firm pressures founders on product fundamentals: what pain point is being solved, how distribution works, and whether there are early signals that the problem truly matters.

That philosophy also shapes capital deployment. “We’re not obligated to deploy all the capital we have,” Zhang said, emphasizing that checks follow conviction, not the other way around. YZi aims to be an early backer but continues supporting companies across multiple rounds, offering mentorship and strategic resources alongside funding.

On infrastructure, Zhang pointed to BNB Chain’s scale as a natural distribution layer, with “thousands of protocols” and “hundreds of millions of users” forming a ready ecosystem for new applications. At the same time, YZi is “very, very open for the founders to fail and welcome them to come back,” she said, framing failure as part of long-term founder development.

As for product trends, Zhang called stablecoins the first true mass-market application beyond trading. “Stablecoins are currently a very good application for crypto to go to mass adoption,” she said, citing improving compliance frameworks globally. Still, she sees further work ahead in custody, exchange infrastructure and on-chain FX before stablecoins fully mature.

The FRS 102 Deadline Is Accelerating Finance Modernisation Across the UK

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The FRS 102 Deadline Is Accelerating Finance Modernisation Across the UK

By Artie Minson, CEO of Trullion

Every major change in accounting standards presents finance leaders with a choice. They can either treat it as a compliance burden to manage or leverage it as a catalyst for operational transformation. With January 1st marking the beginning of mandatory compliance with FRS 102 requiring on-balance-sheet lease accounting, forward-thinking CFOs are choosing transformation. For organisations overseeing substantial lease portfolios, this regulatory shift represents a significant opportunity for teams to modernise their reporting workflows and to embrace AI and automation within their finance function.  

The UK’s transition mirrors a pivotal moment in US finance when ASC 842 took effect in 2019. What initially appeared as a complex compliance mandate became an inflection point for how companies managed their lease portfolios and modernised their finance infrastructure. US companies that approached ASC 842 strategically, investing in scalable technology and rethinking their lease management processes, emerged with competitive advantages that extend far beyond compliance. They gained real-time visibility into lease obligations, streamlined their audit processes, and built finance operations that can adapt to future regulatory changes.

Implementation Challenges

Finance teams preparing for FRS 102 face three core challenges — each of which also offers an opportunity to modernise finance operations.

Reviewing contracts and reassessing accounting judgements surfaces the most immediate challenge. Companies must re-review their lease agreements, extract data, and refine their judgments, many of which exist only in PDF format and are siloed from their lease accounting schedules. This presents an even greater challenge when identifying embedded leases within service contracts, IT agreements, and supplier arrangements. Addressing this challenge forces finance teams to centralise contract data and standardise judgments — capabilities that extend far beyond lease accounting and support stronger planning, forecasting, and vendor management.

Ongoing compliance poses the second major challenge. While initial transitions can be managed through manual processes, maintaining compliance as leases are modified, extended, or terminated requires a systematic approach. Companies that built their IFRS 16 compliance on spreadsheets typically found themselves rebuilding processes within 18 months as the complexity of manual systems overwhelmed them. FRS 102 creates an opportunity to move away from periodic, manual updates toward continuous, system-driven lease management to reduce risk while improving efficiency across the finance function.

The third challenge involves stakeholder management. Changes to reported financial metrics affect loan covenants, executive compensation tied to EBITDA or other metrics, and investor communications. Finance teams must engage early with lenders, boards, and other stakeholders to manage expectations and renegotiate agreements where necessary. This shift elevates finance from a reporting function to a strategic partner, helping leadership understand the broader implications of accounting changes and make better-informed decisions.

Technology and Automation

The availability of AI-powered accounting tools signals a significant difference from previous accounting standard transitions. Modern platforms can extract lease data from contracts using optical character recognition, identify embedded leases through natural language processing, and automatically calculate right-of-use assets and lease liabilities.

Leading UK companies are leveraging these capabilities to build scalable compliance processes. Rather than treating FRS 102 as a one-time transition, they’re implementing systems that can handle ongoing lease modifications, generate audit-ready documentation, and provide real-time visibility into lease obligations. Once finance teams trust automation in one of the most complex areas of accounting, they are far more likely to extend these capabilities across other contract-heavy areas of the business.

Regulatory and Market Context

The FRS 102 amendments arrive as UK companies face increasing pressure to improve financial transparency and align with international peers. The Financial Reporting Council’s decision to align with IFRS standards reflects recognition that UK companies compete in global capital markets where consistent accounting treatment facilitates investment decisions.

The timing also coincides with broader digitalisation efforts across UK finance functions. A recent Deloitte survey found that UK CFOs are upbeat about tech investment and the potential of AI to boost productivity in the year ahead. Almost all survey participants (96%) expect UK companies to increase investment in digital technology and assets over the next five years.

Strategic Implications

As a former CFO, it’s exciting to see that CFOs are positioning FRS 102 compliance as part of broader finance transformation initiatives. The requirement to gather comprehensive lease data creates opportunities to improve contract management, identify cost-saving opportunities, and enhance financial planning capabilities.

When similar lease accounting changes were implemented in the US, several companies reported significant benefits from their preparations. Virgin Voyages, a member of the Virgin Family, adopted Trullion’s AI-powered capabilities to automate the extraction of critical data from lease contracts, saving significant time and effort. The company oversees a diverse range of leases, spanning from real estate to slot machines. Having versatile AI-powered technology enabled the team to handle these varied lease types with ease, ensuring compliance across their entire portfolio.

Market Outlook

The transition also highlights broader trends in UK financial reporting. The integration of AI and automation into compliance processes, the shift toward continuous rather than periodic reporting, and the increasing importance of data management capabilities all point toward fundamental changes in how finance functions operate.

For UK finance leaders, FRS 102 represents both a compliance requirement and a transformation opportunity. Those who recognise and act on this duality will use the implementation of FRS 102 as an opportunity to modernise their finance operations, delivering greater insight and value to their organisations.

—

Artie Minson is the CEO of Trullion, an AI-powered accounting platform serving over 3,500 companies globally. He previously held CFO positions at Time Warner Cable and AOL, President and co-CEO of WeWork, and CEO of LeafLink. 

developers, scaling, PitchFest , Hackathon

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developers, scaling, PitchFest , Hackathon

HONG KONG — CoinDesk wrapped up Consensus Hong Kong on Thursday with north of 11,000 attendees visiting booths and stages.

While day 1 focused on institutional projects and professional investor audiences, the second day concentrated on developers. Representatives of the Bitcoin, Ethereum and Solana communities all spoke to the challenge of scaling their networks and the tooling needed to support growing user bases.

World Liberty Financial, the crypto project linked to U.S. President Donald Trump and his family, is planning to start a foreign-exchange platform called World Swap, which co-founder Zak Folkman said will target cross-border transfers. World Swap will use the USD1 stablecoin and charge less than traditional remittance providers, which can impose a cost of up to 10% per transaction.

The institution-focused LayerZero blockchain will port over to Cardano, and the privacy-focused Midnight mainnet will go live next month, Input Output Global CEO Charles Hoskinson said on stage. In a question-and-answer session, he added that Midnight would not be targeting deeply committed privacy users who might use ZCash and Monero.

Binance co-CEO Richard Teng defended his company from accusations that it played an outsize role in the Oct. 10 liquidation event, which saw $19 billion worth of liquidations. Rather, macro shocks caused a broader market downturn, he said.

Consensus day 2 also saw zkME win the Consensus PitchFest and FoundrAI win the Easy A x Consensus Hackathon.

Both of these events will return on May 5-7, when CoinDesk hosts its flagship North American Consensus — this time in Miami.

Aster, Hyperliquid, Hedera Jump Amid Altcoin Bounce

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Aster, Hyperliquid, Hedera Jump Amid Altcoin Bounce

In brief

  • Aster has surged by almost 10% over the past day, leading a broad altcoin recovery alongside tokens including Hyperliquid, Hedera and Zcash.
  • Despite the bounce, HashKey’s Tim Sun says the market is in a “grueling bottoming-out phase,” not a reversal.
  • Prediction market sentiment remains muted, with Myriad users expecting Bitcoin and Hyperliquid prices to slide.

The cryptocurrency market cap is steadily turning green, with altcoins accelerating their recovery bounce over the past day.

The native token of perps DEX Aster is up nearly 10% over the past 24 hours, making it the largest gainer in the top 50 altcoins by market capitalization. Other tokens including Hyperliquid and World Liberty Financial have followed suit, bouncing 8.9% and 7.6% respectively, according to data from price aggregator CoinGecko.

The broader altcoin sector has also seen gains, with the likes of Hedera, Zcash and Toncoin among the top 50 tokens that have posted gains of more than 5% over the past 24 hours.

The broad-based altcoin rebound undid a portion of the losses caused by a strong labor market yesterday.

The odds of a rate cut dropped after the U.S. added 130,000 jobs in January, experts told Decrypt. It signals a resilient economy, thereby reducing the overhead pressure for the U.S. Federal Reserve to cut interest rates.

All eyes are now on the inflation print scheduled for Friday, which could help strengthen the odds of a rate cut. On prediction market Myriad, owned by Decrypt’s parent company Dastan, users remain broadly pessimistic, putting the likelihood of a rate cut of 25bps or more before July at just 33%, down 7% from Tuesday.

Though the total crypto market cap bounced 1.4% over 24 hours to $2.39 trillion due to the ongoing altcoin recovery rally, experts maintained a cautiously optimistic stance.

“The market has not yet seen a structural trend reversal.” Tim Sun, senior research analyst at HashKey Group, told Decrypt. “While market sentiment remains fragile and the risk of inertia-driven downward movement cannot be ruled out in the short term, on-chain data and capital flows suggest that buying support is strengthening.”

Sun explained that even if the market faces further corrections, the intensity of the selling is likely to fade as the market enters a ‘grueling bottoming-out phase’ where downside potential and volatility begin to converge, in a previous Decrypt report.

Despite the altcoin bounce, investor sentiment remains fearful,with Myriad users assigning a 57% chance that Bitcoin’s next move could take it to $55,000 rather than $84,000.

Decentralized exchange Hyperliquid, whose token was a top gainer earlier this week, still has a weak investor outlook in terms of sentiment. Myriad users put the probability of HYPE’s next move taking it to $26 rather than $41 at over 65%, up from under 60% on Monday.

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Judge Dismisses Bancor-Affiliated Patent Case Against Uniswap

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Judge Dismisses Bancor-Affiliated Patent Case Against Uniswap

Update Feb. 12, 6:40 am UTC: This article has been updated to add comments from a Uniswap spokesperson.

A New York federal judge dismissed a patent infringement lawsuit brought by Bancor-affiliated entities against Uniswap, ruling that the asserted patents claim abstract ideas and are not eligible for protection under US patent law.

In a memorandum opinion and order dated Tuesday, Feb. 10, Judge John G. Koeltl of the US District Court for the Southern District of New York granted the defendant’s motion to dismiss the complaint filed by Bprotocol Foundation and LocalCoin Ltd. against Universal Navigation Inc. and the Uniswap Foundation. 

The court found that the patents are directed to the abstract idea of calculating crypto exchange rates and therefore fail the two-step test for patent eligibility established by the US Supreme Court. 

The ruling marks a procedural win for Uniswap, but it is not final. The case was dismissed without prejudice, giving the plaintiffs 21 days to file an amended complaint. If no amended complaint is filed, the dismissal will convert to one with prejudice.

Shortly after the ruling, Uniswap founder Hayden Adams wrote on X, “A lawyer just told me we won.”

“Uniswap Labs has always been proud to build in public — it’s a core value of DeFi,” a Uniswap Labs spokesperson told Cointelegraph. “We’re pleased that the court recognized that this lawsuit was meritless.”

Source: Hayden Adams

Cointelegraph reached out to representatives of Bprotocol Foundation for comment but had not received a response by publication.

Judge finds that patents claim abstract ideas

As previously reported, Bancor alleged that Uniswap infringed patents related to a “constant product automated market maker” system underpinning decentralized exchanges.

The dispute centered on whether Uniswap’s protocol unlawfully used patented technology for automated token pricing and liquidity pools. 

Koeltl said that the patents were directed to “the abstract idea of calculating currency exchange rates to perform transactions.”

He wrote that currency exchange is a “fundamental economic practice” and that calculating pricing information is abstract under established Federal Circuit precedent.

The judge rejected arguments that implementing the pricing formula on blockchain infrastructure made the claims patentable, and said the patents merely use existing blockchain and smart contract technology “in predictable ways to address an economic problem.”

He said limiting an abstract idea to a particular technological environment does not make it patent-eligible. The court also found no “inventive concept” sufficient to transform the abstract idea into a patent-eligible application. 

Law, Patents, United States, Bancor, DeFi, Uniswap, DEX
Court grants motion to dismiss. Source: CourtListener

Related: Vitalik draws line between ‘real DeFi’ and centralized yield stablecoins

Complaint fails to plead infringement

Beyond patent eligibility, the court found that the amended complaint did not plausibly allege direct infringement.

According to the memorandum, the plaintiffs failed to identify how Uniswap’s publicly available code includes the required reserve ratio constant specified in the patents.

The judge also dismissed claims of induced and willful infringement, finding that the complaint did not plausibly allege that the defendants knew about the patents before the lawsuit was filed.

The dismissal without prejudice leaves open the possibility that Bprotocol Foundation and LocalCoin Ltd. could attempt to refile with revised claims.