How Google’s AI legal protections can change art and copyright protections
Google has been facing a wave of litigation recently as the implications of generative artificial intelligence (AI) on copyright and privacy rights become clearer.
Amid the ever-intensifying debate, Google has not only defended its AI training practices but also pledged to shield users of its generative AI products from accusations of copyright violations.
However, Google’s protective umbrella only spans seven specified products with generative AI attributes and conspicuously leaves out Google’s Bard search tool. The move, although a solace to some, opens a Pandora’s box of questions around accountability, the protection of creative rights and the burgeoning field of AI.
Moreover, the initiative is also being perceived as more than just a mere reactive measure from Google, but rather a meticulously crafted strategy to indemnify the blossoming AI landscape.
AI’s legal cloud
The surge of generative AI over the last couple of years has rekindled the age-old flame of copyright debates with a modern twist. The bone of contention currently pivots around whether the data used to train AI models and the output generated by them violate propriety intellectual property (IP) affiliated with private entities.
In this regard, the accusations against Google consist of just this and, if proven, could not only cost Google a lot of money but also set a precedent that could throttle the growth of generative AI as a whole.
Google’s legal strategy, meticulously designed to instill confidence among its clientele, stands on two primary pillars, i.e., the indemnification of its training data and its generated output. To elaborate, Google has committed to bearing legal responsibility should the data employed to devise its AI models face allegations of IP violations.
Not only that, but the tech giant is also looking to protect users against claims that the text, images or other content engendered by its AI services do not infringe upon anyone else’s personal data — encapsulating a wide array of its services, including Google Docs, Slides and Cloud Vertex AI.
Google has argued that the utilization of publicly available information for training AI systems is not tantamount to stealing, invasion of privacy or copyright infringement.
However, this assertion is under severe scrutiny as a slew of lawsuits accuse Google of misusing personal and copyrighted information to feed its AI models. One of the proposed class-action lawsuits even alleges that Google has built its entire AI prowess on the back of secretly purloined data from millions of internet users.
Therefore, the legal battle seems to be more than just a confrontation between Google and the aggrieved parties; it underlines a much larger ideological conundrum, namely: “Who truly owns the data on the internet? And to what extent can this data be used to train AI models, especially when these models churn out commercially lucrative outputs?”
An artist’s perspective
The dynamic between generative AI and protecting intellectual property rights is a landscape that seems to be evolving rapidly.
Nonfungible token artist Amitra Sethi told Cointelegraph that Google’s recent announcement is a significant and welcome development, adding:
“Google’s policy, which extends legal protection to users who may face copyright infringement claims due to AI-generated content, reflects a growing awareness of the potential challenges posed by AI in the creative field.”
However, Sethi believes that it is important to have a nuanced understanding of this policy. While it acts as a shield against unintentional infringement, it might not cover all possible scenarios. In her view, the protective efficacy of the policy could hinge on the unique circumstances of each case.
When an AI-generated piece loosely mirrors an artist’s original work, Sethi believes the policy might offer some recourse. But in instances of “intentional plagiarism through AI,” the legal scenario could get murkier. Therefore, she believes that it is up to the artists themselves to remain proactive in ensuring the full protection of their creative output.
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Sethi said that she recently copyrighted her unique art genre, “SoundBYTE,” so as to highlight the importance of artists taking active measures to secure their work. “By registering my copyright, I’ve established a clear legal claim to my creative expressions, making it easier to assert my rights if they are ever challenged,” she added.
In the wake of such developments, the global artist community seems to be coming together to raise awareness and advocate for clearer laws and regulations governing AI-generated content.
Tools like Glaze and Nightshade have also appeared to protect artists’ creations. Glaze applies minor changes to artwork that, while practically imperceptible to the human eye, feeds incorrect or bad data to AI art generators. Similarly, Nightshade lets artists add invisible changes to the pixels within their pieces, thereby “poisoning the data” for AI scrapers.
Industry-wide implications
The existing narrative is not limited to Google and its product suite. Other tech majors like Microsoft and Adobe have also made overtures to protect their clients against similar copyright claims.
Microsoft, for instance, has put forth a robust defense strategy to shield users of its generative AI tool, Copilot. Since its launch, the company has staunchly defended the legality of Copilot’s training data and its generated information, asserting that the system merely serves as a means for developers to write new code in a more efficient fashion.
Adobe has incorporated guidelines within its AI tools to ensure users are not unwittingly embroiled in copyright disputes and is also offering AI services bundled with legal assurances against any external infringements.
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The inevitable court cases that will appear regarding AI will undoubtedly shape not only legal frameworks but also the ethical foundations upon which future AI systems will operate.
Tomi Fyrqvist, co-founder and chief financial officer for decentralized social app Phaver, told Cointelegraph that in the coming years, it would not be surprising to see more lawsuits of this nature coming to the fore:
“There is always going to be someone suing someone. Most likely, there will be a lot of lawsuits that are opportunistic, but some will be legit.”
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PayPal says the US Securities and Exchange Commission has abandoned its investigation into the payment giant’s US-dollar stablecoin.
PayPal said in an April 29 regulatory filing that the SEC concluded its investigation into PayPal USD (PYUSD) and wouldn’t be taking any action.
The company said it received a subpoena from the SEC’s Division of Enforcement over its stablecoin in November 2023.
“The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request,” PayPal stated at the time.
In its latest filing, the firm said the SEC notified it in February that the agency “was closing this inquiry without enforcement action.”
PayPal has said its stablecoin is 100% redeemable for US dollars and “fully backed” by dollar deposits, including short-term treasuries and cash equivalents.
However, the stablecoin has struggled to gain momentum in a crowded market dominated by rivals Tether and Circle. PYUSD has a market capitalization of just $880 million, less than 1% of Tether’s (USDT) $148.5 billion.
PayPal’s stablecoin has seen better growth this year with a 75% increase in PYUSD circulating supply since the beginning of 2025, according to CoinGecko. It remains down 14% from its peak supply of just over $1 billion in August 2024.
Earnings on PYUSD, Coinbase partnership
That growth could be bolstered by a company announcement on April 23 introducing rewards for PYUSD in a new loyalty offering that will enable US users to earn 3.7% annually for holding the asset on the platform.
Meanwhile, on April 24, PayPal announced a partnership with Coinbase to increase the adoption of PYUSD.
“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center,” said Alex Chriss, PayPal President and CEO.
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The payments giant also reported robust first-quarter earnings and the completion of significant share repurchase activities.
The firm beat Wall Street estimates, earning $1.33 per share in the first quarter, topping analyst expectations of $1.16. Revenue rose 1% from a year before to $7.8 billion.
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Asset manager BlackRock has filed to create digital ledger technology shares from one of the firm’s money market funds, which will leverage blockchain technology to maintain a mirror record of share ownership for investors.
The DLT shares will track BlackRock’s BLF Treasury Trust Fund (TTTXX), which may only be purchased from BlackRock Advisors and The Bank of New York Mellon (BNY), the firm said in its April 29 Form N-1A filing with the Securities and Exchange Commission.
The money market fund holds over $150 million worth of assets, invested almost entirely in US Treasury bills and cash.
BlackRock said that the shares “are expected to be purchased and held through BNY, which intends to use blockchain technology to maintain a mirror record of share ownership for its customers.”
Unlike the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), DLT shares won’t be tokenized but will instead be used as a transparency tool to verify ownership.
BlackRock will continue to maintain traditional book-entry records as the official ownership ledger.
BlackRock didn’t propose a ticker or set a management fee for the DLT shares in its filing.
A minimum initial investment of $3 million worth of DLT is required for institutions seeking to purchase the digital shares.
BlackRock follows Fidelity’s March 21 filing to list an Ethereum-based OnChain share class, which seeks to track the Fidelity Treasury Digital Fund (FYHXX) — an $80 million fund consisting almost entirely of US Treasury bills.
While the OnChain share class filing is pending regulatory approval, Fidelity expects it to take effect on May 30.
Wall Street heavyweights continue to explore blockchain use cases
Asset managers have increasingly turned to blockchain to tokenize Treasury bills, bonds and private credit over the past few years.
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The treasury tokenization market is currently valued at $6.16 billion, led by BlackRock’s BUIDL at $2.55 billion, while the Franklin Templeton-issued Franklin OnChain US Government Money Fund (BENJI) secures over $700 million worth of real-world assets, according to rwa.xyz.
Ethereum remains the chain of choice for tokenizing treasury assets, and currently houses over $4.55 billion worth, while the Stellar network and Solana round out the top three at $474.9 million and $274.5 million, respectively.
The potential of RWA tokenization has also been championed by BlackRock’s CEO, Larry Fink, who believes the technology could revolutionize investing.
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The US Treasury Department’s Office of Foreign Assets Control can’t restore or reimpose sanctions against the crypto mixing service Tornado Cash, a US federal court has ruled.
Austin federal court judge Robert Pitman said in an April 28 judgment that OFAC’s sanctions on Tornado Cash were unlawful and that the agency was “permanently enjoined from enforcing” sanctions.
Tornado Cash users led by Joseph Van Loon had sued the Treasury, arguing that OFAC’s addition of the platform’s smart contract addresses to its Specially Designated Nationals and Blocked Persons (SDN) list was “not in accordance with law.”
OFAC had sanctioned Tornado Cash in August 2022, accusing the protocol of helping launder crypto stolen by the North Korean hacking collective, the Lazarus Group.
The agency dropped the platform from the sanctions list on March 21 and argued that the matter was “moot” after a court ruled in favor of Tornado Cash in January.
This latest amended ruling prevents OFAC from re-sanctioning Tornado Cash or putting it back on the blacklist.
Initially, the court denied a motion for partial summary judgment and granted in favour of the Treasury. However, the Fifth Circuit reversed the decision and instructed the lower court to grant partial summary judgment to the plaintiffs, which led to the sanctions being revoked.
In March, the Treasury argued there was no need for a final court judgment in the lawsuit.
Crypto body petitions White House over Tornado Cash
On April 28, the DeFi Education Fund petitioned White House crypto czar David Sacks to have prosecutors drop charges against Tornado Cash co-founder Roman Storm.
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Storm was charged in August 2023 with helping launder over $1 billion in crypto through the protocol, and his trial is still set for July.
The group said that the Department of Justice was attempting to hold software developers criminally liable for how others use their code, which they argued was “not only absurd in principle, but it sets a precedent that potentially chills all crypto development in the United States.”
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