Mar 30 • 28M

🗞️ GPT-4 Raises the Bar (Exam), Leaky Tweety, & Crypto Suits

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Matt Margolis
Oren Peleg
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This Week: An AI model just passed the bar exam in the 90th percentile, Twitter is dealing with a source code leak, and the crypto space is facing serious litigation. Plus, remote work ≠ bonus, and tort reform in Florida has sparked a feud.


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💧Twitter Springs A Leak

Twitter was back in court this month, and not for the most obvious of reasons. Last week, the beleaguered social media platform subpoenaed Github over the leak of part of its source code onto the site. "The purpose for which Twitter's DMCA subpoena is sought is to obtain the identity of an alleged infringer or infringers, and such information will only be used for the purpose of protecting Twitter's rights," the court filing reads. Github took down the source code that day. According to the New York Times, "it was unclear how long the leaked code had been online, but it appeared to have been public for at least several months." Moreover, it is unclear whether the leak led to CEO and owner Elon Musk's announcement that all source code used to recommend tweets will be made public at the end of the month. 

  • The code was posted by an account named FreeSpeechEnthusiast, reports CNN.

  • The leak is "concerning" as “it does make it a little bit easier and speedier to probe for vulnerabilities,” and potentially hack data, Brett Callow, a cybersecurity expert, told the Times. He added that “one of the best ways to mitigate insider risk is to keep your employees happy and that certainly hasn’t been the case at Twitter.” 

  • Musk also announced that Twitter, which he bought last year for $44 billion, was now worth about $20 billion by his estimations. The company has faced steep layoffs in recent months and public criticism. 

Secret List

A recently released report by Platformer found that Elon Musk and 35 other "VIP" accounts have monitored and given increased visibility by Twitter. The list includes President Joe Biden, conservative commentator Ben Shapiro, and NBA star LeBron James. Just last week, actor William Shatner tweeted calling out the company's paid verification scheme as being akin to the Columbia Records-Tape Club scheme. "It’s more about treating everyone equally," Musk responded. "There shouldn’t be a different standard for celebrities imo."

The Verdict

The question here is did the leak spur Twitter (re: Musk) to release the recommendations algo to the world, or was the leaker's goal something else? Regardless, the bird app has been plagued by confusion, scandal, and seeming chaos since Musk set his sights on it. Will the continue until the company collapses, or can things turn around?

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⚖️ Crypto Woes

This is a tale of two suits. For crypto critics gouging on schadenfreude, it was the best of times. For crypto titans and the industry as a whole, it was the worst of times. This week, the Commodity Futures Trading Commission sued crypto exchange Binance for having an “ineffective compliance program” and "knowingly" breaking the law. According to The Verge, "the CTFC also charges Samuel Lim, Binance’s former chief of compliance, for allegedly 'aiding and abetting Binance’s violations through intentional conduct that undermined Binance’s compliance program.'" The CTFC alleges Binance executives “failed to properly supervise Binance’s activities” and “actively facilitated violations of U.S. law." Meanwhile, the Securities and Exchange Commission has issued a Wells notice to Coinbase (also a crypto exchange) alerting them that the SEC had discovered potential violations of securities laws following an investigation that began last summer. 

  • Binance CEO Changpeng "CZ" Zhao responded to the CTFC suit in a blog post, stating that “the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint.” 

  • Coinbase also responded to the Wells notice in a regulatory filing, stating "based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company’s spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet… The potential civil action may seek injunctive relief, disgorgement, and civil penalties.”

The Verdict

It remains to be seen if federal regulators catch up with the industry in time to curb its excesses, but with no sign of regulation on the horizon (let alone politicians who even understand what crypto is), consumers will continue to operate in this market without protection.

🤖 AI Raises the Bar

What happens when AI successfully passes the bar exam? What does that mean for the legal field, and how does it redefine what a human lawyer does—if at all? These are no longer hypothetical questions, as GPT-4, the latest release of OpenAI's large language model AI, passed a simulated bar exam in the 90th percentile. Researchers had tested an earlier version of GPT (version 3.5) "in late 2022, finding it could not pass any portion of the [Uniform Bar Exam]," a statement from OpenAI reads. "Their forthcoming paper shows that GPT-4, however, passed the multiple-choice portion and both components of the written portion, exceeding not only all prior large language models’ scores, but also the average score of real-life bar exam test takers." So, here we are. Not 3 months later, a computer code is upending the legal profession. Or is it? According to AboveTheLaw, legal tech firm Casetext has released an AI-powered legal assistant called CoCounsel. But CoCounsel is "not about replacing the human that makes the decision, it’s about replacing the write-off hours sending a junior off to slap together drafts." But you still need a human lawyer somewhere in the system, Michael Bommarito, one of the researchers who tasked GPT-4 with the UBE, wrote in a LinkedIn post. He continued: "You can't just send confidential docs straight to ChatGPT. But the future ain't gonna' look like the past.If you have an existing diligence or compliance process today, accelerate it. If you don't have a process or tools yet, it's an incredible moment in time to start 'blank slate.' Either way, regardless of whether you're buy-side, sell-side, compliance, or counsel, it's clear that the world will be changing."

The Verdict

No one can say what the future of AI will be, or how it will change the legal profession. What we can say is that it will. Fundamentally. But whatever those changes bring, its safe to assume that the interpersonal skills of an attorney will always be in demand.

📤 What Else We’re Forwarding

Office Bonus: Associates of Big Law firm Davis Polk will have their office attendance examined when their yearly bonus is considered, notes Above The Law. A copy of the firm's handbook reads: [f]ailure by any lawyer to comply with the operative in-office attendance policy may adversely affect the lawyer’s performance evaluation and result in disciplinary action, including but not limited to the withholding or reduction of a discretionary bonus (emphasis added), in accordance with applicable law.

Tort Tangle: Morgan & Morgan isn't happy with the new tort reform recently enacted in Florida, reports Above The Law. As a result, the Big Law firm sent an internal email stating that "it will be a serious internal offense if we find any courtesies being extended to the insurance industry."

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