Liquid Network breached: 'All your Bitcoin are belong to us'

Just under 4,000 Bitcoin worth $319 million has been taken from the Liquid Network, with purported "white hat" hackers claiming responsibility. An unverified OP_RETURN message read: "we are whitehats. contact us on chain."

The Blockstream-run Bitcoin sidechain — launched in 2018 and used by exchanges and traders for faster, confidential Bitcoin transfers — has paused its bridge nodes and instructed exchanges to halt LBTC deposits and withdrawals while the team attempts to contact the attackers and identify the security flaws. The Liquid explorer shows the balance of the network's federation wallet dropped from 4,200 BTC to just 207.275 BTC.

Under normal Liquid mechanics, LBTC is burned on the sidechain before Bitcoin is withdrawn. In simple terms, the transaction must be authorized by an 11-of-15 multisig, with funds sent to an approved whitelist. That federation model — which relies on a group of geographically distributed functionaries rather than Bitcoin miners to secure pegged funds — is now under scrutiny given the scale of the extraction.

Liquid Network stated that "the funds were withdrawn via the SideSwap PAK (Peg-out Authorization Key), but that key was not compromised, nor were any others," adding: "Bridge nodes have been temporarily disabled, so no new transactions can be submitted to the network. Effectively, the Liquid sidechain is paused until this issue is resolved."

Crypto analyst DBCrypto observed that "the coins aren't running and they're just sitting on Bitcoin and haven't been mixed. That's more consistent with a whitehat extraction than a theft." However, he said the incident raised serious questions about the sidechain's security. "Either 11 of 15 functionaries signed this off, or the whitelist built to prevent exactly this didn't hold. Neither answer makes Liquid look good."

The funds were sent via SideSwap, which subsequently posted that its key had not been compromised and that "Blockstream has since established that the L-BTC in that order was created through a bug in the Elements software."

At the time of writing, Blockstream and Adam Back had not posted about the incident on X, but Jan3 CEO Samson Mow said: "Everyone is actively working to resolve this... These are difficult times but we'll pull through."

Source: Liquid Network (post 1, post 2, Samson Mow)

Bitcoin ETF inflows hit $3.8B in strongest three-week stretch of 2026

While Bitcoin has yet to hold above the 50-week moving average that would confirm a bull market, other signs suggest bull market conditions are returning. US spot Bitcoin ETFs have just recorded their strongest three-week inflow stretch of 2026 as Bitcoin trades just above $80,000.

The funds attracted $986.9 million in the week ending Friday, bringing net inflows over the past three weeks to $3.8 billion, according to SoSoValue data. Total net assets across the funds stood at $101.3 billion on Friday, while cumulative net inflows reached $55.6 billion. On Thursday, the Bitcoin ETFs recorded $730.9 million in net inflows — the strongest showing since Jan. 14.

The ETF wrapper has become a key barometer of institutional demand since the products launched in January 2024, so sustained inflows at this scale are watched closely as a signal of broader engagement from traditional finance.

AMC chief furious over Robinhood's tokenized stocks

Robinhood has been a striking success so far, leading chains for daily fees and flipping Solana's 24-hour DEX volume. Its token launchpad PONS even broke into the Top 100 coins this week with a 140% gain. Part of the interest stems from the Ethereum L2's pairing of memecoins with tokenized stocks such as AMC.

But while crypto traders have embraced the platform, AMC CEO Adam Aron is far from impressed and has threatened legal action over the chain's "outrageous" decision to tokenize AMC stock without his express permission. The dispute is a high-profile test case for whether tokenized equities offered on-chain without issuer consent can comply with US securities law. He wrote on X:

"I find this practice to be contemptible, outrageous, disgusting, detestable, inexcusable, vile. How can it possibly be legal? We have no connection to this at all, and do not condone it in any way."

Robinhood co-founder Vlad Tenev trolled him with a blithe "What's the concern?" — prompting another rant from Aron about Robinhood's "shocking and shameful" conduct. He called on the company to "CEASE AND DECIST (sic)" and said the SEC could not possibly support Robinhood's "sham ignoring of US securities laws. You can be sure we will be asking them." Robinhood's chief legal officer Dan Gallagher — a former SEC commissioner — wrote back:

"We know a little something about the U.S. securities laws and will not 'DECIST.' Send your lawyers and we'll educate them."

BofA, Citi, Goldman Sachs among 21 institutions planning stablecoin launch

A group of 21 major financial institutions plans to establish a new company to develop and issue stablecoins.

The consortium, announced Tuesday, includes Bank of America, Goldman Sachs, Citi, Deutsche Bank, UBS, Santander, MUFG and Fidelity Investments. It plans to launch a US dollar-denominated stablecoin in the first half of 2027, subject to the company's formation and other conditions. According to the announcement, the group ultimately plans to expand into stablecoins denominated in other G7 currencies, with a euro offering identified as its next priority. The move follows federal stablecoin legislation signed into law in 2025 that established a regulatory framework for payment stablecoin issuers in the United States, clearing a path for banks to enter the market.

In further signs of crypto's mainstream integration, G20 member nations issued a joint statement supporting crypto as a transformative way to bring about "broad-based economic growth." The statement committed member nations to "advancing responsible and effective regulatory and supervisory frameworks that preserve financial stability, support economic growth, and establish clear pathways for sound digital financial and digital assets innovation."

Kalshi bans Santos for life as states attempt to ban Kalshi for life

Prediction market platform Kalshi has banned ousted Republican lawmaker George Santos for life for allegedly using insider information to trade event contracts. It is one of the first lifetime bans the company has imposed since its launch in 2021. Kalshi said Santos had been betting on markets involving his own actions, stating he had "engaged in trading activity in certain markets related to his attendance at the State of the Union address" in February 2026. In response to the ban, Santos called Kalshi an "unserious company."

Meanwhile, New Jersey's Attorney General officially petitioned the US Supreme Court to hear a case aimed at resolving whether state authorities or federal agencies have jurisdiction over prediction market companies. Officials cited civil cases brought by gaming authorities in "at least 20 states" that require the court to decide whether state laws or the Commodity Futures Trading Commission's rules take precedence. The outcome could determine how event contracts — an increasingly popular product for crypto traders this cycle — are regulated across the country.

"These companies have no right to offer their sports bets without following state law, which is why dozens of States across the ideological spectrum have opposed them [...] We're calling on the Supreme Court to resolve this issue and recognize that Congress did not silently make the sports-betting industry immune from state law."

Winners and Losers

At the end of the week, Bitcoin (BTC) is up 2.6% to trade at $80,234, Ethereum (ETH) is up 2.3% to trade at $2,513, and XRP (XRP) is up 3% to $1.42. The total market cap stands at $2.72 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin winners of the week are Pons (PONS) with a 140% gain, Arbitrum (ARB) up 116%, and Dash (DASH) up 66%. The top three altcoin losers of the week are Pump.fun (PUMP), down 13.2%, Canton (CC), down 6.9%, and Official Trump (TRUMP), down 4.1%.

Top Prediction of the Week: BTC will hit $1M by 2030... but Arthur Hayes is buying ETH instead

BitMEX founder Arthur Hayes told Cointelegraph that the collapse of the AI bubble, "massive" money printing, and potential US yield curve control are among the reasons Bitcoin could reach $1 million by 2030. "We have the ingredients. The time is now. So I think the $58,000 was probably the bottom in Bitcoin, and now it's going to grind higher in this hate fuck rally," the 41-year-old billionaire said.

However, he added that the best risk-adjusted bet in crypto right now was not Hyperliquid but ETH, and that he has been amassing a sizeable position. "That doesn't necessarily mean that Hyperliquid won't rise in price. I just don't think it's poised for a 5x, and like where I think Ethereum could do, you know, 3x to 5x pretty quickly," he said.

Top FUD of the Week

El Salvador's post-review Bitcoin accumulation used no public funds: IMF

El Salvador used no public resources to accumulate Bitcoin after the first review of its International Monetary Fund (IMF) financing program in June 2025, according to reports this week. The IMF reportedly said documents supplied by Salvadoran authorities verified that the accumulation came from private donations — meaning the increase in El Salvador's holdings did not reflect additional Bitcoin purchases financed with government resources.

The IMF also said majority ownership and operational control of the Chivo wallet had been transferred to a private operator, while the government retained a minority stake and custodial responsibilities. President Nayib Bukele, however, called the story "fake news" and said the claim that El Salvador had transferred its Bitcoin returns to a private party was "TOTALLY FALSE." He pointed to an IMF link as evidence: "Read it. It clearly says the opposite: that the only thing that was transferred were Chivo shares, something that was offered a year and a half ago, and NOT the Bitcoin Strategic Reserve."

Fake Claude desktop app spreads crypto-stealing malware

A fake Claude desktop application is reportedly being used to distribute RevStealer, a Windows malware strain built to steal crypto, password and browser data. According to a Monday report by cybersecurity company Morphisec, RevStealer was previously distributed through GitHub repositories and game-cheat-themed sites, but the most notable vector is a fake "Claude Opus 5 Free Desktop" project that impersonates AI developer Anthropic and promises free access to Claude.

The researchers noted that the malware is designed to leave few traces and searches browser databases, cookies, password-manager records, VPN and remote-access settings, messaging data, screenshots and selected documents. RevStealer also targets more than 50 cryptocurrency wallets.

Hyperscale Data ends Michigan BTC mining as holdings fall 79%

Hyperscale Data has ended all Bitcoin mining operations at its Michigan facility as it prepares the site for an artificial intelligence data center customer. On Wednesday, the company said all Bitcoin miners at the facility were switched off and that it intends to sell the associated mining equipment. The pivot reflects a broader trend of energy-intensive sites being repurposed for AI compute, which has competed with miners for power capacity in recent years.

Hyperscale said the AI customer has contracted for 20 megawatts (MW) of computing capacity under a 10-year master services agreement with two optional five-year extensions. The agreement may generate more than $1.2 billion over the maximum 20-year term, while an additional 32 MW option could lift potential revenue above $3 billion. The site is expected to support 340 MW.

Hyperscale has also sharply reduced its Bitcoin holdings while funding the AI buildout, with holdings dropping from 1,006 Bitcoin at the end of July to around 215 BTC today.

Top Magazine Stories of the Week

• Mystery surrounds why an OG burned $1M in Bitcoin — What prompted a Bitcoin OG to send 20 BTC to a custodian, retrieve it, and then deliberately burn it?
• Does the Bitcoin rally mean we haven't wasted our lives in crypto? — Crypto is showing signs of life again, but its biggest wins look different from what early believers imagined. After a decade of building, has it all been worth it?
• Token buybacks are booming. But are they good for crypto projects? — Crypto projects are spending hundreds of millions buying their own tokens. Are buybacks creating lasting value, or just making tokens look more valuable than they really are?
• Recovery specialists crack $1B crypto wallet... but find just $10 — Crypto recovery specialists reveal how lost wallets, passwords and seed phrases can sometimes be recovered — but that's no help if the money was never there in the first place.