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First Sora, Now Sexy Chat? OpenAI Cancels Erotic ChatGPT Mode

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In brief

  • OpenAI has reportedly halted plans to release an adult mode in ChatGPT.
  • The move follows earlier promises to allow verified adults access to more content features.
  • The reported move comes the same week that OpenAI canceled its Sora text-to-video generator.

OpenAI has shelved plans to launch its previously announced erotic chatbot, according to a report, apparently backing away from a controversial expansion of ChatGPT that would have allowed adult users to generate sexual content.

The reversal, first reported by the Financial Times on Thursday, follows internal concerns about the societal impact of sexualized artificial intelligence. In January, members of OpenAI’s Expert Council on Well-Being and AI reportedly warned that erotic chat features could foster unhealthy emotional dependency among users, and risk turning the chatbot into what one member described as a “sexy suicide coach.”

OpenAI declined Decrypt’s request to comment on the status of the erotic mode, and the firm has yet to post about its fate.

The decision to cancel what was reportedly to be called “Citron mode” comes two days after OpenAI canceled its Sora text-to-video model, as the company moves to focus development on a unified AI platform rather than a collection of specialized tools.

The move marks a departure from the direction outlined by CEO Sam Altman as recently as October. At the time, Altman said OpenAI planned to allow verified adults to access romantic and erotic content once a robust age-verification system was in place.

Altman described the idea as part of a broader effort to treat adult users with greater autonomy while maintaining safeguards for minors. By December, however, the timeline was pushed to 2026 as the company continued to refine its age-estimation technology.

While OpenAI may be getting out of the adult chatbot business before it ever really got into it, AI models do not necessarily need an “erotic mode” for users to form connections with them.

When OpenAI deprecated GPT-4o last summer, users flooded social media with calls to restore the model after saying they had formed personal and emotional relationships with the chatbot, reflecting a broader debate around erotic chatbots and how people interact with AI.

In June, research published by researchers at Waseda University in Tokyo said 75% of participants reported turning to AI systems for emotional advice.

At the same time, AI developers are facing growing scrutiny as lawsuits test whether conversational AI systems are responsible for reinforcing delusional beliefs or harmful behavior among vulnerable users.

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Trump extends Iran strike pause, trimming price decline

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Bitcoin pared earlier losses Thursday afternoon after U.S. President Donald Trump said he would extend a pause on attacks against Iran’s energy infrastructure.

In a Truth Social post, Trump said the pause will now be 10 days, citing ongoing diplomatic talks.

“As per Iranian Government request… I am pausing the period of Energy Plant destruction by 10 Days,” Trump wrote, adding that the “talks are ongoing” and “they are going very well.”

The news helped stabilize markets after an ugly Thursday that saw bitcoin slide 3% and the Nasdaq 2.4%, with that tech-heavy index now lower by about 10% since peaking for the year in late January.

The surge in oil prices since the breakout of hostilities has garnered most of the headlines, but the selloff in Western bond markets is growing more troublesome.

The U.S. 10-year Treasury yield — below 4% just weeks ago — jumped to as high as 4.43% on Thursday, before pulling back to the current 4.41%. Alongside that sharp rise has been not just the vanishing of expectations for Federal Reserve interest rate cuts, but also serious bets that the U.S. central bank will soon hike rates.

Similar moves in bond yields and central bank expectations are taking place across Western Europe as well.

Nevertheless, the Trump comments sent bitcoin higher by about 1% from its worst levels, and it is now trading just above $69,000. Ether (ETH), XRP (XRP), Solana (SOL) and all also rebounded from session lows, though they remained 3%-5% lower over the past 24 hours.

Bitcoin (BTC) covered call strategy used to generate income

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GameStop’s (GME) massive, $420 million bitcoin transfer earlier this year was not an exit – but it’s not holding the coins anymore either.

In its annual report filed Tuesday, the video game retailer revealed that 4,709 BTC – out of its 4,710 coins – had been pledged to crypto exchange giant Coinbase (COIN) as part of an over-the-counter covered-call strategy.

The disclosure offers a clearer explanation for a January wallet that showed GameStop shifting nearly its entire bitcoin position to Coinbase Prime. The move had stirred speculation that the company was preparing to sell its holdings. Especially so as digital asset treasury firms faced mounting pressure from falling crypto prices, sparking questions about whether GameStop was cutting risk.

The BTC options strategy

What happened instead is that the company has written short-dated call options on its bitcoin, with strike prices between $105,000 and $110,000 and expiries through late March.

The trade was aimed at generating income from option premiums, while limiting gains above those levels.

The filing shows a $0.7 million liability linked to the options and a $2.3 million unrealized gain. It also said that after the fiscal year ending on January 31, a portion of the covered-call contracts expired unexercised, while the related collateral remained with Coinbase Credit.

No longer holding bitcoin

The structure also changed how GameStop accounts for its holdings.

Because Coinbase can rehypothecate or redeploy the pledged bitcoin, the company no longer classifies the assets as directly held. It now records a receivable, the right to reclaim equivalent BTC later.

That is a notable shift from its buy-and-hold strategy. While GameStop said its economic exposure remains similar to holding bitcoin outright, the position is no longer unencumbered. It sits with a counterparty and is tied to derivatives.

The firm reported that receivables linked to the pledged bitcoin were worth $368.3 million at fiscal year-end. It also booked a $59.7 million unrealized loss tied to bitcoin’s price decline.

Japan‘s Financial Watchdog Flags KuCoin for OTC Derivatives Transactions

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The crypto exchange has previously been in the crosshairs of Japanese regulators for offering products and services without the proper registration.

Japan’s watchdog overseeing many activities for cryptocurrency exchanges, has issued warning letters to companies including KuCoin for conducting certain operations without registering, according to a Thursday update from the Financial Services Agency (FSA).

According to the agency’s latest list of entities “conducting financial instruments business without registration,” the FSA said platforms KuCoin, NeonFX, theoption, and GTCFX received a March notice for “soliciting over-the-counter (OTC) derivatives trading via the internet.” Of the four platforms, the FSA listed KuCoin, which is headquartered in the Seychelles, as offering services to Japanese residents, while the others have an international user base.

Source: Japan’s Financial Services Agency

The FSA issued a similar warning to KuCoin and other exchanges, including Bybit, in November 2024 for offering products and services to Japanese residents without proper registration. In February 2025, the financial watchdog sent requests to Apple and Google for the companies to suspend downloads of KuCoin’s app. 

Japan has a high concentration of crypto users. The FSA reported in February 2025 that there were more than 12 million accounts among a population of about 123 million. The country ranked 19th in Chainalysis’s 2025 Global Crypto Adoption Index.

Cointelegraph reached out to KuCoin for comment, but had not received a response at the time of publication.

Related: Austria’s regulator slaps new business ban on KuCoin’s EU exchange

The FSA’s notice comes as the financial watchdog prepares to shift Japan’s legal framework from the country’s Payment Services Act to the Financial Instruments and Exchange Act. The change would significantly alter reporting requirements for initial exchange offerings and token issuers, and provide regulators with greater enforcement authority over unregistered platforms.

Japan’s PM denies involvement in memecoin project

Sanae Takaichi, who has served as the prime minister of Japan since October 2025, publicly denied connections to the “Sanae token” earlier this month after the project grew to a market value of about $28 million before falling sharply. The FSA was reportedly considering an investigation into the matter.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?