Today in crypto, Bhutan has migrated its national ID system from Polygon to Ethereum, California enacted a new law setting guardrails on AI chatbots, and Hyperliquid CEO Jeff Yan and data firm CoinGlass warned that centralized exchanges may be underreporting liquidations.
Bhutan migrates its national ID system to Ethereum
The South Asian nation of Bhutan is migrating its self-sovereign ID system to Ethereum from Polygon, allowing its nearly 800,000 residents to verify their identities and access government services.
The integration with Ethereum has been completed, while the migration of all resident credentials is expected to finish by the first quarter of 2026, according to Ethereum Foundation President Aya Miyaguchi.
“It’s deeply inspiring to see a nation commit to empowering its citizens with self-sovereign identity,” Miyaguchi posted to X on Monday, adding that the Ethereum integration was a world-first.
Integrating a blockchain-based solution into a government’s national ID system has long been touted as a promising crypto use case, due to its immutability, transparency and privacy features, particularly when zero-knowledge proofs are implemented.
California governor signs laws establishing safeguards over AI chatbots
California Governor Gavin Newsom announced that the US state would establish regulatory safeguards for social media platforms and AI companion chatbots in an effort to protect children.
In a Monday notice, the governor’s office said Newsom had signed several bills into law that will require platforms to add age verification features, protocols to address suicide and self-harm, and warnings for companion chatbots. The AI bill, SB 243, was introduced by state Senators Steve Padilla and Josh Becker in January.
Padilla cited examples of children communicating with AI companion bots, allegedly resulting in some instances of encouraging suicide. The bill requires platforms to disclose to minors that the chatbots are AI-generated and may not be suitable for children, according to Padilla.
“This technology can be a powerful educational and research tool, but left to their own devices the Tech Industry is incentivized to capture young people’s attention and hold it at the expense of their real world relationships,” Padilla said in September.
The law will likely impact social media companies and websites offering services to California residents using AI tools, potentially including decentralized social media and gaming platforms. In addition to the chatbot safeguards, the bills aim to narrow claims of the technology “act[ing] autonomously” for companies to escape liability.
SB 243 is expected to go into effect in January 2026.
Centralized exchanges face claims of massive liquidation undercounts
Hyperliquid co-founder and CEO Jeff Yan claimed that the way centralized crypto exchanges, and Binance specifically, report data is likely to underrepresent liquidations.
Bitcoin (BTC) fell to $102,000 on Friday after US President Donald Trump announced sweeping tariffs on China. Similarly, Ether (ETH) fell to $3,500, and Solana (SOL) dropped below $140 in a marketwide sell-off.
CoinGlass data indicated that on Friday, $16.7 billion of long liquidations and $2.456 billion of short liquidations occurred, making it the biggest liquidation event in crypto history.
In a Monday X post, Yan pointed to a documentation page on the world’s top crypto exchange, Binance, explaining that the platform will only include the latest liquidation happening in each second interval in the order snapshot stream.
This stream pushes real-time updates about force-liquidated positions. Batching outputs this way allows for higher performance, but Yan explained that only reporting the last liquidation may lead to underreporting of mass liquidation events, as they process more than 100 liquidations per pair per second.
“Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,“ Yan wrote.
Yan’s statement echoed a Saturday X post from crypto data platform CoinGlass. The platform said that “the actual [liquidated] amount was likely much higher” since “Binance only reports one liquidation order per second.”
