**Cold Storage Fears After Coldcard Users Lose $90M in Bitcoin**
In a shocking turn of events, Coldcard wallet users lost approximately $90 million in Bitcoin due to a vulnerability in the seed generation process. This exploit has sent ripples through the crypto community, prompting small hodlers to seek refuge on centralized exchanges and explore alternative custody methods. The incident highlights the ongoing challenges in securing digital assets and raises questions about the reliability of hardware wallets.
### The Exploit and Its Impact
According to data from CryptoQuant, Bitcoin transfers below 1 BTC reached their highest daily level since 2022, with 39,600 BTC moved. Galaxy Research reported that the third wave of attacks on Coldcard users resulted in estimated losses of 1,367 BTC ($88.6 million) across 4,585 addresses. Alex Thorn from Galaxy Digital warned that the exploit was still ongoing, urging users to move funds from Coldcard-generated addresses immediately.
The vulnerability reportedly stems from a flaw in the Coldcard seed generation process, which did not employ a genuinely random number generator. This flaw allowed attackers to drain funds from compromised wallets, exacerbating the fear and uncertainty among crypto enthusiasts.
### Clarity Act Clock Running Out
Amidst the cold storage fears, political dynamics are also in flux. President Donald Trump is considering a revised ethics proposal for the Clarity Act, which was originally devised by Senators Thom Tillis and Ruben Gallego. The compromise proposal would allow State Attorneys General to sue the Department of Justice if it fails to enforce the rules, rather than allowing them to sue elected officials directly.
With just five days left on the clock, the chances of a Senate vote on the legislation are diminishing. Trump’s $1.4 billion in crypto profits are a significant sticking point, with Senate Minority Leader Chuck Schumer introducing a bill called the Anti-Corruption Bureau Creation Act, which targets “executive branch corruption.”
### Crypto ‘No Earnings’ Reports
The crypto industry is not seeing much in terms of earnings. Coinbase reported a net revenue of $1.2 billion, down 19% from a year earlier, with a net loss of $359 million. Strategy’s Bitcoin purchases led to an $8.22 billion loss in the second quarter, driven by unrealized losses on its Bitcoin holdings. Despite this, the company has built a $3.75 billion U.S. dollar reserve.
Robinhood, on the other hand, posted record second-quarter revenue and earnings, though cryptocurrency transaction revenue fell by 38% from a year earlier, from $160 million to $100 million.
### Crypto Enters Biggest Consolidation Phase in History
Lorenzo Valente from ARK Invest says the cryptocurrency industry is entering its biggest consolidation phase yet, with revenue increasingly concentrated among a handful of dominant protocols. Perpetual futures exchange Hyperliquid and memecoin launchpad Pump.fun account for roughly 67% of total crypto application revenue, with Ethena raising the top three’s combined share to nearly 80%.
Valente expects this trend to accelerate, leading to more mergers and acquisitions, Chapter 11 bankruptcies, project shutdowns, and acqui-hires. He remains bullish on the space despite the challenges.
### World Cup Generated $20B in Blockchain Prediction Market Volume
The 2026 FIFA World Cup drove $20 billion in blockchain-based prediction market volume and $24 million in digital collectible trades, with over 400,000 wallets participating in blockchain-based betting. The $20 billion figure includes trading before and during the tournament, with bettors placing roughly $5.7 billion in wagers over the five-week event.
### Winners and Losers
At the end of the week, Bitcoin (BTC) is down 3% to trade at $63,350, Ether (ETH) is down 3.5% to trade at $1,879, and XRP (XRP) is down 2.3% to $1.08. The total market cap is at $2.18 trillion. Among the biggest 100 cryptocurrencies, the top three altcoin winners are Cardano (ADA) at 14.7%, Uniswap (UNI) at 8%, and Pi (PI) at 3.2%. The top three losers are Stable (STABLE) at -16%, Venice Token (VVV) at -14.6%, and Lido DAO (LDO) at -14.1%.
### Prediction of the Week
#### Bitcoin May Have Bottomed Before Its Traditional Cycle Low
Crypto-focused asset manager Grayscale suggests that Bitcoin’s price may have bottomed earlier than the traditional four-year cycle, implying a cycle low in September or October. Head of research Zach Pandl argues that Bitcoin has “grown up” as an asset and is increasingly driven by macroeconomic factors.
### Top FUD of the Week
#### The Russians… and the Australians… are After Telegram’s Pavel Durov
Russian authorities placed Telegram founder Pavel Durov on an international wanted list, accusing him of facilitating terrorist activity. The FSB alleged that Telegram failed to remove channels, chats, and bots used by Ukrainian intelligence services and extremist organizations.
Meanwhile, the Australian eSafety Commission launched court proceedings against Telegram, alleging the platform failed to remove terrorism-related content.
#### Pump.fun Laid Off Workers Before They Received Millions in PUMP Tokens
Solana-based memecoin launchpad Pump.fun reportedly fired employees two months before they were due to receive PUMP tokens worth millions of dollars. At least one worker was due to receive PUMP tokens in the seven-figure range.
### FAQ
**What caused the $90 million loss in Coldcard wallets?**
The loss was due to a vulnerability in the Coldcard seed generation process, which did not use a genuinely random number generator, allowing attackers to drain funds from compromised wallets.
**What is the Clarity Act?**
The Clarity Act is a proposed legislation aimed at regulating crypto projects and preventing elected officials from endorsing or profiting from them. The revised proposal allows State Attorneys General to sue the Department of Justice if it fails to enforce the rules.
**How did Coinbase perform in the second quarter?**
Coinbase reported a net revenue of $1.2 billion, down 19% from a year earlier, with a net loss of $359 million, significantly wider than analysts’ expectations.
**What is the biggest consolidation phase in crypto history?**
The current phase sees revenue increasingly concentrated among a handful of dominant protocols, with Hyperliquid and Pump.fun accounting for 67% of total crypto application revenue.
**What was the World Cup’s impact on blockchain prediction markets?**
The 2026 FIFA World Cup drove $20 billion in blockchain-based prediction market volume and $24 million in digital collectible trades.
### Conclusion
The recent $90 million loss in Coldcard wallets underscores the vulnerabilities in digital asset security and the need for robust safeguards. Meanwhile, political and market dynamics continue to evolve, with significant implications for the crypto industry. As the sector navigates these challenges, consolidation and regulatory developments will play crucial roles in shaping its future.
