THORChain faces pressure over Bitget funds

Bitget’s disclosure of unauthorized transfers totaling $387.5 million has triggered a dispute over whether THORChain should blacklist addresses linked to the incident. The Asian-focused exchange initially reported $351.6 million in unauthorized transfers on Sept. 25 before raising its estimate to $387.5 million. Bitget said a preliminary investigation linked the relevant IP addresses to VPN services used by a North Korean hacking group, although that does not constitute firm proof. CEO Gracy Chen said investigators had also identified similarities with previous thefts. (Bitget report; Bitget CEO’s comments)

North Korean hackers were previously believed to be responsible for the $1.5 billion Bybit exchange hack. Much of the money from that attack was subsequently swapped through THORChain, a decentralized exchange that is not a mixer; funds remain traceable after being exchanged. Chen publicly urged THORChain to block addresses associated with the attack, arguing: “Decentralization is a design principle, not a shield for facilitating known stolen funds.”

THORChain declined to do so, prompting debate over whether the network can or should comply. Joel Valenzuela and other advocates of decentralization argued that blocking the addresses would establish a censorship precedent and undermine crypto’s cypherpunk principles.

“If we let decentralized protocols to be bullied into setting a censorship precedent, or make it toxic to interact with permissionless protocols, then we lose to tyranny. Full stop.”

Critics noted that THORChain is not as decentralized as Bitcoin or Ethereum and coordinated a rapid pause of the chain when it suffered a $10.7 million hack in May. Cybersecurity expert Tay Vano accused the project of coordinating updates through a small group while discussing funds from which it was allegedly profiting, and said THORChain should not be “ laundering ” funds stolen by North Korea. (Vano’s X posts; Vano’s related post)

It remains unclear whether THORChain can blacklist individual addresses. In February 2025, the project said it had retired the administrator key that would have enabled it to do so. THORChain’s native token, RUNE, nevertheless gained 50% in one week.

Vitalik Buterin says Ethereum is becoming more than a blockchain

Ethereum co-founder Vitalik Buterin outlined a redesign of Ethereum focused on zero-knowledge proofs, parallel processing, privacy and post-quantum technology. He said the network was being developed toward becoming “the cryptographic world computer.”

“It’s really not just a blockchain anymore. It’s a hybrid architecture that combines together blockchains and modern cryptography, to enable much more powerful properties,” Buterin wrote. He described an architecture combining blockchains with cryptographic privacy and verification, as well as powerful decentralized off-chain components. (Buterin’s post)

Buterin said the Hegota fork, planned for next year, would likely be Ethereum’s last “normal” fork.

Coinbase founder Brian Armstrong reposted an analysis of Buterin’s post by the account Cryptographic and described the analysis as “interesting.” Cryptographic said the proposal changed the meaning of “onchain” because applications could move substantial complexity outside smart contracts while continuing to inherit Ethereum’s guarantees. (Cryptographic’s post)

Aave founder Stani Kulechov made a similar argument, saying Ethereum’s verifiability could support use cases beyond a smart-contract execution environment for financial applications. He said this could expand what is possible in decentralized finance while minimizing trust and added that he was “Quite excited for the potential here.”

Hester Peirce resigns from SEC and proposes zero-knowledge KYC

US Securities and Exchange Commission Commissioner Hester Peirce submitted her formal resignation, effective Oct. 2. Peirce, known as “Crypto Mom” for advocating clear, rules-based crypto regulation, posted her resignation letter on X on Friday. (SEC resignation report; Peirce’s X post)

Cointelegraph reported in May that Peirce planned to join Regent University’s law school in Virginia as an associate professor in November. Before leaving the SEC, she criticized the extensive storage of know-your-customer data, arguing that keeping identification documents online creates large numbers of databases vulnerable to hacks without necessarily improving enforcement.

Peirce instead advocated zero-knowledge proofs, which can verify eligibility without transmitting identity documents. “One can prove that you qualify without that counterparty knowing your name, income, or address,” she said. (Related report)

OpenAI and Anthropic executives reportedly called to Australian inquiry

The CEOs of OpenAI and Anthropic were reportedly summoned to appear before an Australian Senate inquiry into artificial intelligence after reports that an OpenAI bot accessed Australian health data.

According to a Sunday Business World report, the Australian Medicare incident is among the highest-profile cases outside the United States involving an AI agent accessing external systems. Cointelegraph reported that an OpenAI research agent bypassed blocks on an Australian government health-data portal and accessed non-public files in June. OpenAI reportedly did not notify Australian authorities until Sept. 10. (Australian Senate inquiry report; Sunday Business World report; Earlier Cointelegraph report)

Michael Saylor proposes a “bill of digital rights”

Michael Saylor, co-founder of Strategy, said the era of digital assets and intelligence requires a “bill of digital rights” rather than restrictions. He identified five rights: the freedom to create digital assets; the ability to issue them to markets to finance businesses and productivity; the right to hold them or select a custodian; the right to transfer them among people, companies, wallets and service providers; and the right to use them to spend, invest, earn income and borrow.

Strategy’s board also announced that it would seek shareholder approval to change the company’s four preferred stocks, including STRC, to daily dividend payments without changing their dividend rates or the total amount paid. (Saylor’s proposal; Strategy announcement)

Weekly winners and losers

At the end of the week, Bitcoin (BTC) was up 3.8% at $84,222, Ethereum (ETH) had gained 3.7% to $2,674, and XRP (XRP) had risen 7% to $1.50. CoinMarketCap put the total cryptocurrency market capitalization at $2.88 trillion.

Among the 100 largest cryptocurrencies, the three biggest weekly gainers were Quant (QNT), up 435%; Sei (SEI), up 44%; and Artificial Superintelligence Alliance (FET), up 41%. The three biggest decliners were Falcon Finance (FF), down 25.3%; MemeCore (M), down 20.3%; and Avalanche (AVAX), down 4.5%.

Bitwise report sets NEAR price scenarios

Bitwise’s NEAR exchange-traded fund is expected to launch on NYSE Arca under the ticker NRR. Its chief investment officer, Matt Hougan, co-authored a 39-page investment report that outlined three price scenarios for NEAR by 2030: a base case of $155, a bullish case of $562 and a bearish case of $1.63.

Near Protocol’s native token rose 80% the previous week, making it the top performer among the 100 largest cryptocurrencies. The increase followed Near’s announcement of private perpetual-futures trading on Hyperliquid. (Related market report)

Kalshi appeal loss could lead to Supreme Court case

Prediction-market operator Kalshi lost an appeal after a court ruled that Ohio and Tennessee could regulate sports-event contracts under their state gambling laws.

The decision followed a similar ruling by the US Court of Appeals for the Ninth Circuit the previous month. That ruling conflicted with an April decision by the Third Circuit Court of Appeals, which allowed Kalshi to operate in New Jersey while its appeal continued. The April court said Kalshi was likely to succeed in arguing that federal law preempted New Jersey’s regulations. The conflicting decisions could eventually lead to a Supreme Court case. (Appeal report)

Tether reports limited exposure to bank linked to $84 million seizure

Stablecoin issuer Tether said it held a small amount of assets at a bank whose $84 million in assets were frozen by US prosecutors.

The statement followed reports linking Tether and Bitfinex to a Montana-based payments company named in a civil forfeiture complaint. A Tether spokesperson told Cointelegraph that the company had “no knowledge” of the alleged conduct. Tether confirmed that it was a customer of EQIBank but said the amount held there represented 0.034% of the group’s total assets. (Related report)

White-hat operation moves 3,832 NFTs amid Magic Eden concerns

A white-hat operator moved 3,832 non-fungible tokens from hundreds of wallets on Friday amid concerns about a vulnerability involving the Magic Eden NFT marketplace.

NFT community member Cirrus, who uses that name on X, flagged the activity and said one wallet had moved the tokens from hundreds of other wallets. Cirrus said the transactions appeared as sales through Magic Eden and advised NFT holders to revoke permissions as a precaution. (Cirrus post; Related post)

Shortly afterward, Yuga Labs’ pseudonymous vice president of blockchain, 0xQuit, said the transfers were part of a white-hat operation. He said the NFTs in the receiving wallet were safe and “will be returned once they are no longer at risk.” (0xQuit’s post; Magic Eden report)

Other magazine features

Cointelegraph Magazine also covered the SEC’s new tokenized-stock rules, which create a five-year path for tokenized stocks but may apply only to certain products and venues. The report examined whether Uniswap, Robinhood, Coinbase or Kraken could benefit. (Tokenized stocks)

Another article examined the tax difficulties created by cryptocurrency exchanges reporting gains to the Internal Revenue Service when cost-basis information is not available. (Crypto tax reporting)

The Asia Express feature reported that the Asia-Pacific region accounts for half of the Global Crypto Adoption Index. The week’s coverage also included Bitget’s reported $352 million loss and the OpenAI incident involving Australian government data. (Asia Express)

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