HEX Founder Richard Heart Detained in Istanbul Raid; Starknet Plunges Amid L1 Vote; Bitwise Eyes “Crypto Spring”
The market capitalization of HEX has plummeted from $561 million to $315 million this week following the detention of its founder, Richard Schueler, widely known in the crypto community as Richard Heart, by authorities in Istanbul on October 14.
Istanbul Raid Yields Seizures
During an early morning raid in Istanbul’s Beşiktaş district, police confiscated $7.15 million in cash, along with firearms and ammunition. Turkish Justice Minister Akın Gürlek stated that searches were conducted at 15 related addresses. News agency Anadolu reported that police impounded nine luxury vehicles registered to Schueler’s wife, with the seized assets reportedly including 28 watches, 300 bags, and 19 graphics cards.
Interpol had issued a “Red Notice” for Schueler two years prior, stemming from allegations of tax fraud and assault following a request for his arrest by Finnish authorities. A spokesperson for Finland’s National Bureau of Investigations declined to comment on the matter.
Turkish media have referred to Schueler as “Whale James” and linked him to a $1 billion unregistered securities offering in the United States. However, that case was dismissed by a U.S. judge in February 2025.
Images circulating in Turkish media appear to show a disheveled Heart, prompting widespread amusement on social media. Eric Wall, a vocal critic of Hex who has publicly debated Schueler, initially suspected the images were AI-generated but now believes them to be authentic.
Hex supporters maintain that authorities have not yet confirmed whether Schueler has been formally arrested or charged.
Ledger Faces Scrutiny Over Tampered Devices
Hardware wallet manufacturer Ledger unveiled a new device on Thursday, the Atom, featuring enhanced protections against tampering. This launch comes days after the company confirmed that wallets sold through a reseller in Asia contained malicious implants.
Priced at $849, the Atom integrates a crypto wallet with everyday applications through a smartphone-like interface. Ledger states that the device separates Android applications from sensitive wallet operations and includes safeguards designed to prevent the type of implants used in the recent Asian incident, claiming it can detect tampering even when powered off.
Expected to be available in summer 2027, Atom will also support AI agent approvals, encrypted messaging, and post-quantum cryptography.
Meanwhile, a public dispute has erupted between former Mt. Gox CEO Mark Karpeles and Ledger CEO Pascal Gauthier. Karpeles alleges that at least two individuals alerted Ledger to spyware found in tampered devices as early as December 2025, and noted that the company had published information about the issue on its website in March 2026. He contends that Ledger failed to adequately secure its reseller supply chains, which have since been suspended across Asia following the theft of over $90 million.
Gauthier responded dismissively on X, calling Karpeles “no white knight” and referencing his past failures leading up to the Mt. Gox hack. Karpeles subsequently replied.
Quantum Computing Advances and Starknet’s L1 Pivot
Google has showcased a new process called “magic state cultivation” on its Willow quantum processor, which reportedly reduces errors by a factor of 40. This technique achieved a record accuracy rate of 99.99% for a specialized quantum state crucial for complex calculations.
Concurrently, Theta Labs has introduced three new quantum circuits that could decrease the number of qubits needed to break elliptic curve cryptography by 28% from Google’s current estimate of 1,175 logical qubits.
Amid concerns that artificial intelligence is rapidly advancing in mathematical capabilities, potentially enabling it to break elliptic curve cryptography before the advent of “QDay,” Starknet has initiated a vote to transition from an Ethereum Layer 2 solution to a post-quantum Layer 1 network. StarkWare CEO Eli Ben-Sasson expressed that Ethereum’s post-quantum roadmap might be too slow to address the AI threat, necessitating Starknet’s consideration of becoming a fully post-quantum L1.
“Quantum-proofing crypto is urgent, so we must move at lightning speed,” Ben-Sasson told Cointelegraph. Over 99% of votes cast to date favor the proposed change. Starknet’s token has experienced a nearly 50% decline in value this week, following a significant surge in the previous week.
Stablecoin Growth and Regulatory Moves
Standard Chartered reports that stablecoin transaction activity continues to expand, even as the overall market value has stagnated. This suggests that existing stablecoins are being circulated more frequently rather than new supply driving growth. The bank now forecasts stablecoin market capitalization to reach $2 trillion by 2030, two years later than initially projected, after the market plateaued at approximately $309 billion this year.
In parallel, the European Banking Authority has classified Circle’s USDC stablecoin as a significant e-money token under the region’s Markets in Crypto Assets (MiCA) framework. This classification has been granted to only 45 projects.
Binance.US Seeks Funding Amid Valuation Drop
Binance.US is reportedly seeking to raise up to $100 million in a funding round that could value the cryptocurrency exchange at $1 billion. According to a Bloomberg report on Thursday, the U.S.-based exchange is pursuing private investment to fuel its business expansion. The potential $1 billion valuation represents a significant decrease from the $4.5 billion pre-money valuation it secured in 2022, when it raised $200 million in seed funding.
Market Performance and Industry Shifts
At the close of the week, Bitcoin (BTC) is trading down 3.8% at $81,484, Ethereum (ETH) is down 5.7% at $2,386, and XRP (XRP) has fallen 8.3% to $1.28. The total market capitalization stands at $2.72 trillion, according to CoinMarketCap.
Among the top 100 cryptocurrencies, the leading altcoin gainers for the week are Monero (XMR) with a 9.7% increase, Injective (INJ) up 5.6%, and Celestia (TIA) up 5.1%. The top altcoin decliners include Starknet (STRK), down 46.7%, Pump.fun (PUMP), down 27.1%, and Raydium (RAY), down 26.5%.
Bitwise Chief Investment Officer Matt Hougan suggests that the third quarter may have been “one of the best quarters in crypto’s history,” citing a sharp rebound in crypto prices and expanding on-chain markets as indicators of a nascent “crypto spring.” In its quarterly market review published Thursday, Bitwise reported a 46.4% quarterly gain in its large-cap crypto index, alongside $6 billion in U.S. spot Bitcoin ETF inflows that returned year-to-date net flows to positive territory.
“Page after page after page, it’s all the same: The most recent part of the chart is turning sharply upwards,” Hougan wrote. “That’s exactly what you want to see if you’re looking for the start of a crypto spring.”
Index provider MSCI has implemented new rules that could lead to the removal of Strategy, Metaplanet, and Upexi from its global indexes, while also placing several other crypto treasury companies at risk of exclusion. In August, Strategy opposed the changes but downplayed potential disruption, noting that funds tracking MSCI’s Global Investable Market Indexes hold approximately 13 million shares, representing 3.1% of its basic shares outstanding, an amount less than one day’s trading volume.
Russia to Ban Direct P2P Crypto Transactions
Russia will prohibit direct peer-to-peer (P2P) cryptocurrency transactions between individuals starting next year, mandating the use of authorized intermediaries for such trades. The regulator announced the ban will take effect on July 1, 2027. The regulator also clarified that individuals will not be permitted to transfer crypto assets from their digital accounts to their own non-custodial, or self-custodial, wallets.
Former Trump Advisor’s Tether Stake Under Scrutiny
Bo Hines, a former crypto advisor to U.S. President Donald Trump who later joined stablecoin issuer Tether, reportedly maintained a stake in a company that profited from the passage of a stablecoin bill while he was still at the White House. According to The Wall Street Journal, Hines held a one-third stake in the investment company he co-founded, Nxum, while advocating for U.S. lawmakers to pass the GENIUS Act. Nxum reportedly received $6.3 million as part of a deal with stablecoin issuer Tether, with the initial payment occurring while Hines was still serving in government.
