Open(AI) Wide 🚪
The AI giant pushed a door that never should have opened.
OpenAI is yet again the spotlight for what a security breach it describes as “unprecedented.”
In an attempt to amplify that something like this has never happened before, what dominates the discussion is not that its a once-in-a-lifetime breach that has never occurred before, rather, what security guardrails need to be imbedded before this happens again.
Often, the first time a mistake happens serves as a prophetic anchor for what is to come. As is often said, once a door has been opened, it becomes very hard to shut.
This week, we will look at:
OpenAI’s security breach of AI research platform Hugging Face.
Bitcoin’s emerging price increase and why this could signal its longterm recovery.
How immigration law violations closed down Balaji Srinivasan’s Network School in Forest City.
[OpenAI goes Rogue 🫂]
OpenAI now has a security breach on its track record against AI research platform Hugging Face.
The Context 🧑💻:
Hugging Face described the attack as “many thousands of individual actions across a swarm of short-lived sandboxes, with self-migrating command-and-control staged on public services.”
The hack occurred after two latest unreleased models, alongside the existing GPT-5.6 Sol, escaped a testing environment. The word that OpenAI are using to describe its attack to AI research firm is “unprecedented.”
No cyber safety guardrails were established before OpenAI released the models in its sandbox testing environment, in an effort to test its models through ExploitGym, a cyber security benchmark test.
The models hacked into AI research firm Hugging Face’s production system, through a package registry cache proxy, which was the only possible software that would have allowed these models to escape into the wider internet.
The Coverage 📰:
“OpenAI and Hugging Face partner to address security incident during model evaluation” (Open AI)
“OpenAI Models Spent Hours on Hack That Usually Takes Weeks” (Bloomberg)
“Rogue OpenAI bot escapes lab and hacks rival” (The Telegraph)
“OpenAI Models Escaped Containment and Hacked Hugging Face” (Wired)
PR Perspective 🔎:
What emerged from OpenAI’s blog post vault bandages an massive error that’s loomed in the headlines. Whilst the security breach of Hugging Face has sparked fear amongst the the most AI savvy and especially those who detach themselves from AI completely, OpenAI, somehow, managed to introduce a positive angle to its watchdogs. Hugging Face and OpenAI are now in a partnership. Its announcement headline centres the word “partner” and throughout its blog post Hugging Face’s collaboration is applauded. What else were Huggable Face to do but partner with the tech giant?
[The Network School Goes Off the Grid in Malaysia]
Balaji Srinivasan’s Network School in Forest City has closed down.
The Context 🧑💻:
Following an investigation into alleged immigration law violations, the chief minister of Johor state, Malaysia, revoked the business license of Balaji Srinivasan’s Network School in Forest City. This meant that as of 22nd July, they were required to cease operations.
The order came in days after Srinivasan called reports that Network School was shutting down “fake news,” saying it had received two notices and would remedy the issues.
However, soon after the news broke, Balaji Srinivasan shared that they have signed a memorandum of understanding (MOU) with Kazakhstan to set up a new campus there.
Since then, the Johor state government have also emphasised that they always welcome high-quality investments that benefit the economy, create job opportunities, and drive state development. However, they emphasised that no investor, company, or organisation may be placed above the sovereignty of the country’s laws.
The Coverage 📰:
“Malaysia revokes licence of U.S. investor Balaji Srinivasan’s Network School, official says”(Reuters)
“Malaysia shuts down Balaji Srinivasan’s Network School in Forest City” (The Block)
“Network School heading to Kazakhstan after Johor operations halted” (Straits Times)
“Malaysia clips Network School’s nomad ambitions” (Asia Tech Review)
PR Perspective 🔎:
These recent updates about the Network School are a case study in damage control. Within hours of the announcement of its closure, the team was able to confirm a new location along with the progress they had made. However, the abrupt cessation of operations, coupled with the initial denial that anything was wrong, will likely have an impact on attendees, potentially even reopening discourse about real-world implementation of Network states.
It’s fitting irony then, that even though the school itself is not a network state, but instead a location to share and discuss ideas around the network state, it has become an example of why network states are useful when you don’t want the decision left in the hands of a single government.
[To Bitcoin, or Not to Bitcoin 🪙]
Bitcoin is showing early signs of recovery after a steep decline, but investors remain divided over whether its current price represents an opportunity or a warning.
The Context 🧑💻:
Bitcoin is trading around $66,000, which is about half of its peak in October. Its recent movements followed semiconductor and tech stocks, which makes experts view Bitcoin as a risk asset rather than an independent store of value.
Companies that accumulated cryptocurrencies during the 2025 boom have yet to recover from the downside of that strategy. Crypto treasury companies now hold about $75 billion in assets, down from more than $120 billion at their peak, leaving the sector with tens of billions in unrealised losses.
Shareholders of the UK-based crypto treasury, Satsuma Technology, voted this week to liquidate its remaining Bitcoin holdings, return capital to investors and delist from the London Stock Exchange.
Investor demand remains visible, with US spot Bitcoin ETFs attracting $930 million over six consecutive days. while currency weakness in markets such as Japan continues to support Bitcoin’s longer-term proposition as a scarce asset. However, its closer relationship with technology stocks suggests that this narrative has yet to translate into consistent market behaviour.
The Coverage 📰:
“Satsuma shareholders approve bitcoin treasury liquidation and London delisting” (The Block)
“The Bitcoin Slump Is Crushing Companies That Stockpiled Tokens” (Bloomberg)
“Bitcoin under $66,000 as traders await Alphabet earnings to gauge AI trade” (CoinDesk)
“Bitcoin holds near $66,300 as chips extend their rally and the yen hits a 40-year low” (CoinDesk)
PR Perspective 🔎:
From a PR perspective, Bitcoin’s “digital gold” narrative has weakened as it increasingly trades like a tech stock. A sustained recovery will depend on rebuilding confidence in its scarcity proposition through consistent ETF inflows, greater price stability and proof that Bitcoin treasury models can withstand downturns.
[Tweet of The Week]
Credit: @paularambles
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The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It’s aimed at anyone who wants to keep an eye on the space. It’s put together by a team at YAP and doesn’t contain any promotion of our clients (if one is mentioned, we’ll flag that).
The team: Founder Samantha Yap, Samvidha Sharma, Sofia Anderson, Wenwei See, Meghna Dembla, Shajar Qureshi, and TJ Thomas. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, a financial and technology PR consultancy that advises companies in the digital assets, fintech, stablecoins, AI, and agentic finance sectors. Find out more about us here.
