Tampered Ledger Devices Surface in Europe Amidst Ongoing Security Concerns
A sophisticated attack that has already seen an estimated $93.4 million stolen from hardware wallet users in Asia has reportedly spread to Europe. A user on X, identified as Johannes, has shared photographs of a tampered Ledger device he claims to have purchased two weeks ago from the European consumer electronics chain MediaMarkt. The internal modification appears to be an earlier version of implants previously linked to CryptoBilis-shipped devices in Asia. No funds have been reported stolen from this European device.
“Either the device didn’t work, or they were waiting for a more widespread usage of the compromised devices,” Johannes stated. Mark Karpeles, former CEO of Mt. Gox, whose investigations into the tampered Asian Ledgers helped expose the issue, noted that the antenna on the device indicates it is the “Eurasian version.” This suggests that different versions of the implant have been distributed to regions utilizing distinct mobile frequencies. Ledger has not yet confirmed whether the reported European device is part of the same attack campaign.
XRP Bug Uncovered by AI Researchers, Bounty Disclosed
Security firm Veria Labs has been awarded a $250,000 bug bounty for discovering an overflow vulnerability within XRP’s code, which had reportedly existed since 2015. The firm claims that a single transaction exploiting this bug could have generated trillions of XRP out of thin air. The vulnerability has since been patched, and there is no evidence to suggest it was ever exploited.
Cayden Liao, co-founder of Veria Labs, explained on X that their AI agent analyzed “rippled,” the software powering the XRP Ledger, and identified two low-severity bugs. By combining these two vulnerabilities, they were able to devise a much larger exploit. Liao stated that a single exploit transaction could have created over 18 trillion XRP, a quantity 184 times greater than the total XRP supply. He highlighted that this could have put the entire $94 billion XRP market cap at risk, exceeding the largest crypto hack on record by more than 60 times. Liao speculated that the vulnerability remained undetected because it chained together two bugs that would be considered low severity individually. The bugs were reported on September 22, and RippleX issued a patch three days later.
AI’s Cryptographic Threat Looms, Industry Divided
Ethereum co-founder Vitalik Buterin has echoed researcher Justin Drake’s concerns that advancements in artificial intelligence could potentially undermine the cryptography underpinning current blockchains, possibly even before the advent of quantum computing. “I don’t recommend anyone scramble to move their funds to new wallets today,” Buterin wrote, “But we should take the risks to cryptography from AI-accelerated math seriously.”
Drake urged the industry to prepare for a “bunker mode” strategy, particularly in light of OpenAI’s recent release of hundreds of new mathematical findings that have stumped human researchers. While these findings are not directly related to cryptography, the potential for AI agents to uncover novel insights into the mathematical structures of elliptic curve cryptography or lattice-based cryptography has raised concerns within the core Ethereum team. However, these warnings have been met with criticism from other projects and analysts, who dismiss them as fear-mongering, citing a lack of evidence that AI agents are close to breaking cryptographic systems.
Samsung Wallet to Integrate USDC Transfers
Samsung is set to introduce USDC transfers to its Samsung Wallet payment application for 82 million eligible US Galaxy users in the final week of October. This new feature will enable users to send USDC to compatible crypto wallets internationally and transfer funds to eligible bank accounts in over 60 countries, with recipients receiving the money in their local currency. Users will be required to complete identity verification to access the service. Bastion will provide the stablecoin account and payment infrastructure, with Coinbase acting as a sub-custodian through Coinbase Prime Vault. Solana and Sui have been named as technical partners for the integration.
Political Landscape and Crypto Legislation
Former New York Governor Andrew Cuomo has stated that the cryptocurrency industry’s strong backing of US Republicans has alienated Democrats, whose support is crucial for the passage of federal crypto legislation. Prediction markets currently place the probability of Democrats winning both chambers of Congress at approximately 61%. Cuomo suggested that a Democratic-controlled Congress could either aim to reverse the SEC and CFTC’s crypto initiatives or collaborate with the Trump administration to enact the CLARITY Act. “You need Democrats to pass the bill. You need Republicans. You have to be more balanced,” he emphasized. While acknowledging a perception of Democrats being “anti-crypto,” Cuomo argued that the technology aligns well with the party’s objectives and values, particularly in empowering individuals who may lack access to traditional financial products.
Weekly Market Performance and Analyst Outlook
At the close of the week, Bitcoin (BTC) saw a 2.8% decline, trading at $83,435. Ethereum (ETH) dropped 6.5% to $2,562, and XRP (XRP) fell 7% to $1.40. The total cryptocurrency market capitalization stood at $2.82 trillion, according to CoinMarketCap.
Among the top 100 cryptocurrencies, the week’s top three altcoin performers were StarkNet (STRK), with a 91% gain following its announcement of becoming a post-quantum L1; Binance Life (币安人生), up 25.4%; and Celestia (TIA), which rose 20.8%. The biggest weekly losers in the top 100 included Venice Token (VVV), down 18.5%; Sky (SKY), down 16.2%; and Uniswap (UNI), down 15.4%.
Tom Lee, chair of Bitmine, predicted at Token2049 on Friday that ETH could surpass $5,000 by year-end and potentially reach $25,000 to $50,000 per token by the end of the current cycle. Lee also revealed that Bitmine is nearing its target of accumulating 5% of Ethereum’s supply, with approximately 6 million Ether already held and only about 100,000 ETH remaining to reach their cap.
Security Incidents and Industry Accusations
Bitcoin-only hardware wallet provider Coldcard reported an unauthorized phishing link appearing on its official X account on Sunday, despite the company employing offline two-factor authentication. The post has since been removed, and the company reiterated that its sole official website is https://coldcard.com. DefiLlama’s hack tracker estimated losses from a July Coldcard exploit at $115 million.
Meanwhile, THORChain technical co-founder Chad Barraford accused stablecoin issuer Tether of blacklisting the network’s USDt (USDT) vaults without explanation, only to unfreeze them hours later. In an X post on Friday, Barraford stated that Tether had blacklisted THORChain vault addresses, freezing approximately 1.45 million USDT across four wallets. He later reported that trading would resume after Tether unfroze the addresses.
Former Celsius CEO Barred from Industry
Former Celsius CEO Alex Mashinsky has been permanently barred from the cryptocurrency, securities, and commodities industries as part of a settlement with New York Attorney General Letitia James. The agreement includes up to $35 million in conditional payments. Announced on Friday, the New York settlement resolves a 2023 civil lawsuit that accused Mashinsky of misleading hundreds of thousands of investors about the safety of Celsius prior to its collapse in 2022. Mashinsky is currently serving a 12-year federal prison sentence for fraud and was separately ordered to forfeit over $48 million.
Crypto-Related Crime in France and Lending Risks
French authorities have recorded 90 crypto-related cases involving kidnapping, extortion, threats, and violent theft within a seven-month period, prompting questions about the country’s status as a hotspot for such crimes.
Crypto lending has seen a 55% increase since July, but now faces the heightened risks associated with AI-assisted hacks and the potential for cascading failures through interconnected protocols. Experts advise caution and adherence to safety measures.
Raoul Pal, founder of Real Vision, believes that a pause in the AI stock rally could redirect capital towards the crypto market. He also anticipates that AI agents will likely drive increased adoption of Ethereum and Solana.
