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.

Justin Sun has filed a lawsuit against World Liberty Financial, escalating a dispute over locked tokens and governance concerns tied to the Trump-associated platform.

Lawsuit Filed Over Frozen Tokens

Sun said he initiated legal action in a California federal court after the project allegedly:

• Froze his WLFI tokens
• Refused to restore his rights as a holder
• Threatened to burn tokens without justification

According to Sun, attempts to resolve the issue privately failed, leaving litigation as his only option.

“No Choice but to Go to Court”

Sun stated he had tried to settle the matter directly with the project team but was unsuccessful.

He framed the lawsuit as a move to protect his rights as an investor, emphasizing that he acted in good faith before pursuing legal action.

Largest Investor in the Project

Sun is reportedly the largest individual investor in World Liberty Financial, giving him significant exposure to the platform’s governance token.

The dispute raises broader questions about:

• Investor protections in crypto projects
• Transparency in token management
• Governance fairness

Ongoing Tensions Over Token Lockups

This is not the first time Sun has criticized the project.

He previously raised concerns about:

• Extended token lockup periods
• Lack of transparency in governance proposals
• Concentration of voting power

Sun claimed that more than 76% of voting tokens were controlled by just 10 wallets.

Project Pushes Back

World Liberty Financial has denied the allegations, calling them “baseless” and indicating it is prepared to defend itself in court.

The team has stated it has supporting evidence and contracts backing its position.

Political Angle Remains Separate

Despite the dispute, Sun clarified that the lawsuit does not affect his support for Donald Trump or his administration’s pro-crypto stance.

However, he suggested that certain individuals within the project are acting in ways that do not align with those broader goals.

Another Governance Flashpoint in Crypto

The case highlights ongoing challenges in crypto governance, particularly around:

• Token ownership rights
• Lockup mechanisms
• Project accountability

As legal scrutiny increases, disputes like this could help shape how investor protections evolve in the digital asset space.

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.