54,000 Crypto Wallet Users Exposed in Data Breach, CLARITY Act Prospects Dim at 10%: Hodler's Digest, Aug. 16
Trezor and SafePal cryptocurrency wallet holders face elevated phishing risks following information breaches, while CLARITY legislation chances stand at mere 10% ahead of upcoming White House discussions.
CLARITY Act prospects diminish as legislation approaches final hurdle
The estimated likelihood of the CLARITY Act becoming law in 2026 has been slashed to a mere 10% by Galaxy Digital. This represents a dramatic decline from the firm's May assessment, which placed passage probability at 75%.
Numerous political complications continue to be unaddressed, and the Senate possesses only 14 working days after reconvening on Sept. 14 to advance the legislation.
Without an immediate initial motion to proceed vote happening as soon as legislators return to the capital, sufficient time would exist for the CLARITY Act to succeed only if the bill "dominates basically the entire working session," according to Galaxy head of research, Alex Thorn.
Should the legislation fail to advance, both the SEC and CFTC have prepared to fill the regulatory void by implementing their own frameworks for cryptocurrency markets. The SEC had scheduled a public meeting on Friday to present its "clear rules of the road" but subsequently canceled the gathering citing an "unforeseen scheduling issue." Reports indicate the White House expressed displeasure that the SEC pursuing independent crypto regulations might alienate Democrats and undermine the sensitive negotiations currently in progress to advance CLARITY.
A Wednesday White House meeting will bring together SEC chair Paul Atkins, President Donald Trump and numerous executives from Coinbase, a16z, Ripple, Chainlink, NYSE and Nasdaq to address cryptocurrency regulation and identify pathways to advance the legislation.
On the subsequent day, the US Commodity Futures Trading Commission's newly formed Innovation Advisory Committee will convene to examine regulation pertaining to crypto, AI and prediction markets.
Cryptocurrency firms pursue frontier AI cybersecurity tools amid mounting hack concerns
Digital asset companies including Anchorage Digital, BitGo, Bitwise, Blockstream, Ledger and Trezor have called upon frontier artificial intelligence (AI) laboratories to provide Bitcoin developers with early access to their most advanced systems.
A public letter, released by the Bitcoin Policy Institute stated that Bitcoin Core developers and additional crypto engineers face restrictions from guardrails implemented on publicly accessible frontier platforms, forcing them to depend on less sophisticated open-weight alternatives.
"Without dedicated access programs, defenders may lack the tools needed to keep pace with evolving threats to the infrastructure they maintain."
The danger posed by AI-discovered vulnerabilities has emerged as a critical concern following the theft of $116 million from Coldcard hardware wallets. The Bitcoin Red Team later employed AI to uncover thousands of potential security vulnerabilities utilizing open source Chinese systems.
Additional threats facing hardware wallet owners have surfaced during recent days, with private information belonging to more than 50,000 individuals compromised in two distinct episodes. Trezor disclosed a security incident affecting personal information of approximately 14,000 customers through its logistics partner, ShipMonk. Customers who obtained products from the US, UK, Sweden, Colombia, Brazil, Italy, and Portugal during the period from May 10 to Aug. 8 now face elevated risk from potential phishing campaigns leveraging their personal details.
Digital wallet provider SafePal has additionally revealed its own security breach involving unauthorized access to nearly 40,000 clients' purchase records, encompassing names, addresses and transaction information. The company has subsequently located and eliminated more than 30 fraudulent sites and phishing operations connected to the incident.
Jurisdictional dispute emerges between CFTC and states over prediction market oversight including Kalshi and Polymarket
The US Commodity Futures Trading Commission (CFTC) has directed prediction market Kalshi to disregard New York's restraining order and maintain normal operations.
The CFTC argued that New York's enforcement proceedings against Kalshi for allegedly conducting an illegal gambling operation constituted a market emergency since it would prevent Kalshi from operating prediction markets throughout the nation. The agency maintains that the Commodity Exchange Act mandates the CFTC to establish a uniform national derivatives marketplace. CFTC Chair Michael Selig stated that Congress did not envision derivatives exchanges confronting a "patchwork of state gaming laws."
Days afterward, a Washington state judge directed prediction market platform Kalshi to cease operations within the state and dismissed its contention that federal commodities legislation supersedes Washington gambling statutes. Kalshi received orders to establish IP-address and residency-based geofencing by Aug. 19 and deploy a GeoComply multi-source geofencing solution by Sept. 2.
The New York City Council has also expressed interest in regulating prediction markets and initiated an inquiry into prediction market companies to determine whether they employ "false and deceptive marketing" through influencers to reach young adults.
Ethereum Foundation restructures post-quantum strategy and determines parameters for Hegota hard fork
The Ethereum Foundation is abandoning the Poseidon hash function within its proposed post-quantum framework, based on statements from researcher Justin Drake.
During Thursday remarks, Drake indicated the foundation would instead utilize proven alternatives including SHA or BLAKE.
Poseidon represents a comparatively recent hash function designed to operate more efficiently with zero knowledge proofs for the purpose of compressing signature sizes. Nevertheless, Drake explained that recent advances enable SNARKS to be customized to function more effectively with existing hash functions.
A production-ready leanVM is planned for 2027, with subsequent deployments throughout Ethereum's consensus, data and execution layers scheduled for 2028.
Ethereum developers are presently evaluating 66 proposals to consolidate them as components of defining the scope for the next significant Ethereum enhancement following Glamsterdam named Hegotá.
Censorship resistance proposal FOCIL currently stands as the sole Ethereum Improvement Proposal (EIP) confirmed for inclusion. Several additional EIPs concentrate on privacy enhancements.
Core developers intend to deploy the Hegotá upgrade during the next year, with Glamsterdam anticipated in upcoming months.
Tether achieves inaugural comprehensive financial audit, secures unqualified KPMG opinion
Tether accomplished the first complete independent examination of its annual financial records, with KPMG US providing a clean opinion on the stablecoin provider's 2025 accounts.
The examination encompassed Tether's balance sheet, income statement and cash flows for the fiscal year concluded Dec. 31, 2025, incorporating the assets supporting its issued tokens and the obligations they represent. Tether reported the audited documents demonstrated reserves surpassing liabilities by $6.814 billion.
In contrast to Tether's quarterly reserve attestations, which the company has released for years, the comprehensive audit subjected the organization's broader financial records and supporting evidence to independent scrutiny, encompassing transactions, systems, ownership records, valuations and counterparties.
Winners and Losers
At the end of the week, Bitcoin (BTC) is down 3.3% to trade at $62,842, Ethereum (ETH) is down 2.3% to trade at $1,872 and XRP (XRP) is down 4.2% to 99 cents. The total market cap is at $2.16 trillion according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin winners of the week are Velvet (VELVET) with a 131% gain, Ether.fi (ETHFI) on 31%, and Chainlink (LINK) on 14%.
The top three altcoin losers of the week are Uniswap (UNI) which was down 18%, Aptos (APT) down 12% and Pepe (PEPE) down 11%.
Top Prediction of the Week
Bitcoin may reach bottom in October, altcoins are 'basically dead,' Swan CEO states
Bitcoin might establish a bottom in October before rallying to approximately $130,000 prior to the 2028 halving, based on projections from Swan Bitcoin CEO Cory Klippsten.
His analysis suggests that Bitcoin has historically bottomed roughly 12 months following each prior bull market summit, and the most recent peak occurred in October last year.
He informed Cointelegraph that Bitcoin might decline to $57,000, potentially even $53,000, before a rapid rebound, and might achieve around $130,000 ahead of the 2028 halving.
Top FUD of the Week
Bitcoin reaching $1M by 2030 is 'mathematically impossible' claims Markus Thielen
The mathematical foundations supporting the frequently referenced forecast that Bitcoin will achieve $1 million by 2030 fail to withstand scrutiny, based on analysis from Markus Thielen, head of research at 10x Research.
"It's mathematically impossible," Thielen stated to Trade Secrets, contending that Bitcoin would require attracting an additional $15 trillion in capital to attain a per Bitcoin valuation of $1 million. This amount represents approximately 25% of the US stock market's aggregate value transferring into Bitcoin during the next four years.
"We have seen $1 trillion US dollars of inflow to bring the market cap really to $1 trillion. To $1 million [per] Bitcoin. It's 15x, I think, from here."
Bitcoin price-metric basket experiences longest capitulation since FTX collapse: Glassnode
Bitcoin is experiencing its most extended capitulation period since the conclusion of the 2022 bear market, according to a Monday report from onchain analytics platform Glassnode.
The company stated that forty-five Bitcoin (BTC) price indicators it monitors within the Bitcoin Cycle Position Heatmap reveal the longest "capitulation" stage since the FTX collapse in late 2022. However, it cautioned that aggregate measurements will need to deteriorate further to align with zones that previously indicated bear-market bottoms, according to creator Rafael Schultze-Kraft.
"Today it sits in its coldest stretch since FTX: late in the bear, but not yet the unanimous deep blue that previously marked a floor," he commented.
Missouri trio faces charges over alleged Bitcoin kidnapping scheme
Three individuals from Missouri were charged in connection with an alleged August 2024 conspiracy to kidnap a Bitcoin owner and seize his cryptocurrency holdings.
Sedric Louis, John Davis and Martel Williams were purportedly contracted to kidnap and coerce a Bitcoin owner to transfer cryptocurrency to wallets controlled by organizers, based on a Tuesday press release from the US Attorney's Office. They journeyed from St. Louis to Connecticut, where they secured rental vehicles and acquired air rifles to surveil the victim.
Following two days of surveillance on the intended victim, they called off the operation due to concerns about detection by home security cameras. Shortly thereafter, an alternate crew from Florida arrived to execute the plan.
Top Magazine Features of the Week
El Salvador's Bitcoin experiment turns 5: 'It was for us, not them'
Five years after El Salvador made Bitcoin legal tender, the experiment has fallen short of its original promises for locals, but it's been great for Bitcoin's global profile.
Inside the fake crypto startup that fooled North Korean IT workers
Suspected North Korean IT workers joined a fake crypto startup — without realizing their every move was being tracked to extract valuable intel.
Solana's fee overhaul increases burn and makes resource hogs pay
Solana's proposed fee overhaul would make resource-heavy transactions more expensive while cutting costs for simpler activity, and it increases the amount of SOL burned.