Xiao-I Loses Apple Siri Suit, MSUSD Crashes 85%, Korea Weighs Crypto Tax Repeal

Crypto News

Chinese AI firm Xiao-I (AIXI) lost the first-instance ruling in its long-running patent dispute with Apple over the Siri voice assistant. The Shanghai High People’s Court dismissed Xiao-I’s infringement claim on its chatbot-system patent, ruling that certain iPhone models fall outside the patent’s protected scope, and it rejected Apple’s request for roughly 2 million yuan (about $280,000) in litigation-cost compensation. The validity of the underlying patent was separately upheld by China’s Supreme People’s Court on March 31, a final and non-appealable decision. Xiao-I called the verdict deeply flawed and said it will appeal to the Supreme People’s Court within the statutory deadline, vowing to use every available legal means.

A national petition calling for the abolition of South Korea’s cryptocurrency taxation has gathered 58,571 signatures, clearing the threshold to advance toward parliamentary review. Under National Assembly rules, the petition becomes eligible for deliberation at the first committee meeting held 30 days after referral. The stakes are concrete: from January 1 next year, income from transferring or lending digital assets is classified as other income under the current income tax law. Gains exceeding 2.5 million won would face a combined 22% rate, comprising 20% other-income tax and 2% local income tax. The outcome could reshape how Korean traders of any altcoin approach realized gains.

Tether co-founder Reeve Collins unveiled STBL, a decentralized stablecoin protocol designed to challenge the structural limits of incumbent models. Collins argued that today’s issuers invest deposited dollars into assets such as US Treasuries yet keep the interest for themselves, leaving users with only payment convenience. STBL applies a dual-token structure that separates a stable payment token from a yield-bearing token, allowing holders to accrue returns while they transact. The design positions STBL closer to the mechanics behind algorithmic stablecoins while retaining collateral backing, and Collins said the framework is built to interface with banks and other institutions seeking compliant on-chain settlement rails.

A token tied to Mainstreet Finance, MSUSD, plunged as much as 85% after a verification provider terminated its attestation agreement, draining confidence across connected lending venues and AMM liquidity pools. On-chain data shows utilization in Morpho’s msY/USDC market hit 100%, while AlphaUSDC Delta V2 carried roughly 30% of its book — about $18 million — in exposure to the affected market. Mainstreet said the episode stemmed from a halted third-party proof-of-reserves dashboard rather than insolvency, insisting assets remain fully collateralized. The team has already deployed more than $8 million in USDC to support liquidity and is searching for a replacement attestation provider as it works to restore the peg.

The prominent Ethereum MEV bot known as jaredfromsubway suffered roughly $7.5 million in losses in a targeted exploit. Security researchers said an attacker-controlled contract tricked the bot’s automated execution system into granting token approvals, then used the remaining approval allowances to siphon WETH, USDC, and USDT. Investigators stressed the incident was not caused by phishing or a smart-contract vulnerability, but by abuse of the structure that automates MEV opportunity detection and approval handling. The case is a reminder that even sophisticated AI trading bot infrastructure can be weaponized when permission logic is exposed, sharpening scrutiny of how automated strategies manage on-chain authorizations.

Alongside the patent fight, Xiao-I confirmed it has regained full compliance with Nasdaq’s continued-listing requirements, resolving minimum bid-price and market-value deficiencies first raised in December 2025 as of April 23 and May 29, 2026. The company’s American depositary shares will keep trading on the Nasdaq Global Market. To stabilize its share price, Xiao-I restructured its ADS ratio from three ordinary shares per ADS to 60, an effective 20-to-1 reverse split, with Citibank converting every 20 existing ADSs into one new ADS and paying cash for fractional shares. Management expects a proportional price increase but cautioned that the outcome cannot be guaranteed.

Taken together, these developments trace a single thread: trust infrastructure — legal, regulatory, and on-chain — is being stress-tested across the industry. COINOTAG’s aggregate market data underscores the caution, with the Fear and Greed Index at 23 signaling extreme fear and Bitcoin dominance elevated at 70.0% as capital concentrates in the largest asset. Total crypto market capitalization stands near $1.84 trillion, a defensive posture consistent with a deepening bear market mood. From a depegged stablecoin to an exploited bot and a contested patent, each event exposes a primary-source failure point — attestation dashboards, approval logic, court filings — that markets are now pricing with visible risk aversion.