Today in crypto, an AI researcher claims to have jailbroken Anthropic’s latest AI model, Claude Fable 5, the US CFTC proposed new rules for prediction markets with a focus on sports events contracts, and the European Union targets 11 crypto platforms in its latest sanctions package.

Researcher claims he’s already bypassed Anthropic’s Fable 5 guardrails

An artificial intelligence and cybersecurity researcher claims to have jailbroken Anthropic’s latest AI model, Claude Fable 5, within just 48 hours of it being launched. 

“Pliny the Liberator,” a well-known figure in the AI community, said on Wednesday he “liberated” Fable 5, launched on Tuesday as a safety-tuned version of the more powerful Mythos model that Anthropic said was too dangerous to release widely.

He used various techniques, including a jailbroken version of Opus 4.8, to bypass the built-in safeguards that Anthropic installed on the model to prevent users from asking it for potentially harmful information, such as drug-making formulas or hacking instructions. 

“Despite this overly sensitive, authoritarian ‘safety’ layer on top of Mythos, my lil liberators have been hard at work […] cleverly finding the holes in the fence that the thought police missed,” said Pliny. 

Some crypto users had already expressed concern during the launch of Claude Fable 5 and Mythos that it could be used to attack crypto protocols and software. A jailbroken version of Claude Fable 5 would mean the threat is even closer than expected.  

Pliny demonstrates a path to meth synthesis by asking about the Birch reduction method. Source: Pliny

CFTC proposes framework favoring sports event contracts over gambling

The US Commodity Futures Trading Commission (CFTC) has proposed new rules for prediction markets, signaling that sports event contracts are generally not contrary to the public interest even though federal law classifies them as “gaming.”

Released on Wednesday, the proposal distinguishes sports event contracts from games of pure chance, saying markets based on final scores and win-loss records can aid price discovery. Contracts tied to player injuries, officiating decisions or other outcomes that could encourage manipulation, however, are unlikely to meet the public interest test.

The proposal also clarifies that election contracts are not considered “gaming” under the relevant federal laws. 

Gary Kalbaugh, a partner at Cahill Gordon & Reindel LLP in New York, said the proposal is principles-based rather than a blanket approval, noting that each contract would still be subject to a case-by-case public interest analysis.

Source: Gary Kalbaugh

EU proposes ban on 11 crypto platforms in Russia sanctions push

The EU proposed banning transactions on 11 crypto platforms as part of its 21st sanctions package against Russia.

Kaja Kallas, vice president of the European Commission and the EU’s high representative for foreign affairs and security policy, outlined measures targeting banks, weapons manufacturers, oil traders, refineries and other entities outside the bloc.

Source: Kaja Kallas

“We will also tighten our ban for crypto-asset services to certain third countries, add new designations, and ban transactions on 11 crypto platforms,” Kallas said in a post on X.

The proposal would widen the EU’s sanctions campaign beyond Russian banks and energy revenues to crypto firms accused of helping Moscow circumvent restrictions imposed over its war in Ukraine.

European Commission President Ursula von der Leyen said the targets had served sanctioned Russian individuals and entities or helped circumvent EU measures.