A major Wall Street law firm has admitted fault after submitting a legal filing filled with errors caused by artificial intelligence, raising fresh concerns about AI use in high-stakes professional work.

AI Hallucinations Lead to Dozens of Errors

Sullivan & Cromwell issued a formal apology to a federal judge after a court document included around 40 incorrect citations and related mistakes.

Andrew Dietderich, co-head of the firm’s global restructuring team, acknowledged the issue in a letter to Martin Glenn of the US Bankruptcy Court for the Southern District of New York.

“We deeply regret that this has occurred,” Dietderich said, taking responsibility for the filing and confirming that the firm failed to meet required accuracy standards.

Internal Safeguards Were Not Followed

Dietderich explained that the firm already has internal policies governing AI use, including:

• Verifying citations generated by AI tools
• Reviewing all legal submissions before filing

However, in this case, those safeguards were not properly followed. As a result, the review process failed to catch both AI-generated inaccuracies and additional manual errors.

Growing Problem Across Legal Industry

The incident highlights a broader issue with AI “hallucinations,” where tools generate false or misleading information that appears credible.

According to legal technologist Damien Charlotin, there have been:

• Over 1,300 recorded AI-related errors in legal filings globally
• More than 900 cases in the United States alone

Most of these involve fabricated or incorrect legal citations, though flawed legal arguments have also surfaced.

Firm Launches Internal Investigation

Sullivan & Cromwell has since taken immediate steps to address the issue, including:

• Conducting a full internal review
• Assessing whether stronger safeguards are needed
• Considering updates to training and oversight processes

The firm also reached out to Boies Schiller Flexner LLP, which first flagged the errors, to acknowledge and apologize for the mistake.

AI Use in Law Under Scrutiny

The situation adds to growing scrutiny over how AI is being used in professional environments, especially in fields like law where accuracy is critical.

While AI tools can improve efficiency, this case shows that without strict oversight, they can introduce serious risks.

A Reminder of Human Accountability

Despite increasing reliance on AI, the responsibility for accuracy still lies with professionals.

As Dietderich noted, ensuring the reliability of legal filings is ultimately a human obligation, regardless of the tools used.

Coinbase is sounding the alarm on a future risk that could reshape blockchain security: quantum computing.

In a new report, its quantum advisory board highlighted how some networks are preparing early, while others may face greater challenges down the line.

Quantum Threat Not Here Yet, But Inevitable

Coinbase researchers emphasized that quantum computers capable of breaking blockchain cryptography do not yet exist, but likely will in the future.

Such machines could:

• Break private key cryptography
• Access crypto wallets
• Undermine blockchain security models

The board believes it is only a matter of time before this level of computing power becomes reality.

Algorand Leading in Quantum Readiness

Algorand was highlighted as one of the most prepared networks.

Key strengths include:

• A staged roadmap toward quantum resistance
• Existing support for quantum-secure accounts
• Successful quantum-resistant transactions on mainnet

However, some areas like validator coordination and block proposals still require upgrades.

Aptos Also Well Positioned

Aptos was also identified as a strong contender in the transition to post-quantum security.

Its design allows users to:

• Update their authentication keys easily
• Transition to quantum-safe cryptography without moving funds
• Maintain the same account structure

This flexibility could make upgrades smoother compared to other networks.

Proof-of-Stake Chains Face Higher Risk

The report warned that major proof-of-stake networks like:

• Ethereum
• Solana

may be more exposed due to how validator signatures are structured.

That said:

• Solana is already developing improved signature schemes
• Ethereum has a roadmap to adopt quantum-resistant cryptography

What Happens to Vulnerable Wallets?

One of the more controversial ideas discussed is how to handle existing wallets.

Potential solutions include:

• Encouraging users to migrate to quantum-safe wallets
• Revoking access to vulnerable wallets
• Treating un-upgraded funds as permanently inaccessible

This raises major questions about user responsibility and network governance.

A Long-Term, Not Immediate Risk

Despite the warnings, Coinbase stressed that a quantum computer capable of breaking crypto would need to be:

• Far more powerful than current systems
• Likely at least a decade away

Still, the report urges developers to begin preparing now rather than waiting.

Preparing for the Next Era of Security

The takeaway is clear: quantum computing may not be an immediate threat, but it is a structural risk that cannot be ignored.

Networks like Algorand and Aptos are taking early steps, while others are still developing their strategies.

How the industry responds could determine whether crypto remains secure in a post-quantum world.

Kalshi is reportedly preparing to enter the cryptocurrency derivatives space, signaling a major shift beyond its core focus on event-based trading.

Moving Into Crypto Perpetual Futures

According to reports, Kalshi is exploring the launch of perpetual futures contracts, often called “perps,” tied to digital assets like Bitcoin.

Perpetual futures allow traders to:

• Speculate on price movements without expiration dates
• Maintain continuous market exposure
• Use leverage to amplify positions

This type of product has become one of the most widely traded instruments in crypto markets.

Expanding Beyond Prediction Markets

Kalshi is best known for offering event-based contracts, where users bet on outcomes such as elections or economic indicators.

A move into perpetual futures would:

• Shift the platform toward continuous financial markets
• Attract a broader range of traders
• Position Kalshi closer to traditional derivatives exchanges

This could significantly expand its addressable market.

Regulatory Advantage in the US

One of Kalshi’s biggest differentiators is its regulatory status.

The platform is overseen by the Commodity Futures Trading Commission, making it one of the few fully regulated derivatives venues in the United States.

With regulators increasingly open to crypto derivatives, Kalshi could:

• Offer compliant alternatives to offshore exchanges
• Capture trading volume currently outside US jurisdiction
• Benefit from growing institutional interest

Momentum Building for Perpetual Futures

The timing aligns with broader industry trends.

Perpetual futures trading continues to grow, with daily volumes still reaching tens of billions of dollars despite cooling from peak levels.

Meanwhile, major platforms are expanding into similar products:

• Coinbase has launched perpetual-style futures tied to equities
• Kraken offers tokenized stock perpetual futures

This reflects a shift toward 24/7, multi-asset trading environments.

Bridging Traditional Finance and Crypto

Kalshi’s potential move highlights a convergence between:

• Prediction markets
• Crypto derivatives
• Traditional financial instruments

By combining regulatory compliance with crypto-native products, the platform could play a key role in bringing derivatives trading onshore in the US.

What Comes Next?

While the plans are not yet officially confirmed, the move would mark a significant evolution for Kalshi.

If launched, it could:

• Increase competition in the derivatives space
• Accelerate regulatory clarity in the US
• Further legitimize crypto-based trading products