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In today’s crypto news, Bhutan has transitioned its national ID system from Polygon to Ethereum, California has enacted a new statute establishing boundaries on AI chatbots, and Hyperliquid’s CEO Jeff Yan, alongside data firm CoinGlass, cautioned that centralized exchanges may be underestimating liquidations.
Bhutan transitions its national ID system to Ethereum
The South Asian country of Bhutan is shifting its self-sovereign ID system to Ethereum from Polygon, enabling its almost 800,000 inhabitants to validate their identities and access government services.
The connection with Ethereum is complete, while the transfer of all resident credentials is anticipated to conclude by the first quarter of 2026, as per Ethereum Foundation President Aya Miyaguchi.
“It’s incredibly motivating to observe a nation dedicating itself to enabling its citizens with self-sovereign identity,” Miyaguchi posted on X on Monday, asserting that the Ethereum integration was unprecedented.
Incorporating a blockchain-based solution into a governmental national ID system has often been heralded as a promising use case for crypto, thanks to its immutability, transparency, and privacy attributes, especially with the adoption of zero-knowledge proofs.
California governor endorses regulations for AI chatbots
California Governor Gavin Newsom declared that the US state would implement regulatory protections for social media platforms and AI companion chatbots to safeguard children.
In a notification on Monday, the governor’s office announced that Newsom signed various bills into law that will mandate platforms to incorporate age verification features, procedures to tackle suicide and self-harm, alongside warnings for companion chatbots. The AI bill, SB 243, was proposed by state Senators Steve Padilla and Josh Becker back in January.
Padilla referenced instances where children interacted with AI companion bots that allegedly led to cases of promoting suicide. The bill necessitates platforms to inform minors that the chatbots are AI-generated and may not be appropriate for children, according to Padilla.
“This innovation can serve as a remarkable educational and research instrument, but if left unchecked, the Tech Industry is driven to capture the attention of young individuals and retain it at the cost of their real-world connections,” Padilla commented in September.
This legislation will likely affect social media firms and websites providing services to California residents that utilize AI tools, potentially encompassing decentralized social media and gaming platforms. In addition to the chatbot protections, the bills intend to limit claims of the technology “act[ing] independently” to help companies avoid liability.
SB 243 is projected to take effect in January 2026.
Centralized exchanges face accusations of significant liquidation underreporting
Hyperliquid co-founder and CEO Jeff Yan asserted that the manner in which centralized crypto exchanges, with Binance in particular, present data is prone to underreporting liquidations.
Bitcoin (BTC) dropped to $102,000 on Friday following US President Donald Trump’s declaration of sweeping tariffs on China. Similarly, Ether (ETH) fell to $3,500, and Solana (SOL) dipped below $140 in a market-wide sell-off.
Data from CoinGlass revealed that on Friday, $16.7 billion of long liquidations and $2.456 billion of short liquidations occurred, marking the largest liquidation occurrence in crypto history.
In a post on X on Monday Yan highlighted documentation page on Binance, the world’s leading crypto exchange, clarifying that the platform only records the latest liquidation occurring in each second interval in the order snapshot stream.
This stream transmits real-time updates about forcibly liquidated positions. Clustered outputs in this manner enable enhanced performance, but Yan noted that the exclusive report of the last liquidation may result in underreporting large-scale liquidation events, as they handle more than 100 liquidations per pair each second.
“Due to the nature of liquidations occurring in bursts, this could easily lead to a 100x underreporting under certain circumstances,” Yan expressed.
Yan’s remarks mirrored a post on X from Saturday by CoinGlass. The platform asserted that “the actual [liquidated] total was likely significantly higher” since “Binance reports only one liquidation order each second.”
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