The critical reason you should never ask ChatGPT for legal advice

CoinTelegraph

by Yohan Yun

January 22, 2026

AI-Generated Deep Dive Summary

Asking ChatGPT or similar AI chatbots for legal advice poses significant risks, particularly in the crypto and blockchain industries where legal complexities are common. The primary concern is the potential waiver of attorney-client privilege, as AI tools like OpenAI retain user data by default unless explicitly opted out. This means even deleted chats could be subpoenaed, exposing sensitive information to courts or opposing counsel. Legal experts warn that relying on AI for advice not only compromises privacy but also raises questions about reliability and control over personal data. The article highlights how traditional protections, such as attorney-client privilege, do not fully apply to AI interactions. For example, using cloud-based tools like Microsoft 365 or drafting documents locally with software like Microsoft Word offers different levels of protection. While local files remain private, cloud-based tools expose user data to potential discovery. Similarly, AI chatbots often train their models on user inputs unless specific measures are taken to prevent it. This blurs the line between protected and discoverable information. In the context of crypto and blockchain, where legal disputes and regulatory challenges are frequent, the risks of using AI for legal advice are heightened. For instance, drafting internal notes or seeking guidance on contentious issues could result in unintended exposure of sensitive communications. Courts have already demonstrated a willingness to compel AI companies to retain and disclose chat logs, as seen in recent cases involving OpenAI. To mitigate these risks, experts recommend ensuring clear contractual protections with AI providers. This includes specifying that user data remains exclusively theirs, preventing its use for training models or other purposes. Encryption, limited retention periods, and secure storage practices can further safeguard information. Additionally, consulting traditional legal professionals is crucial for navigating complex crypto-related issues while maintaining privacy and privilege. Ultimately, the rise of AI in legal matters underscores the need for users to exercise caution and awareness. While AI tools may offer convenience and affordability, they do not provide the same protections as working directly with a lawyer. For crypto enthusiasts and professionals, understanding these risks is essential to avoid unintended consequences in legal disputes or regulatory actions.

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Originally published on CoinTelegraph on 1/22/2026