# Crypto Weekly Roundup: Major Liquid Network Heist Shakes Bitcoin Sidechain, ETF Inflows Surge, and More
The digital asset world was roiled this week by a staggering security breach on a prominent Bitcoin sidechain, while other stories ranging from Wall Street’s embrace of stablecoins to a viral feud between a retail trading platform and a cinema chain dominated headlines. Here’s a comprehensive look at everything that unfolded.
## Liquid Network Suffers Massive Bitcoin Theft
A Bitcoin sidechain operated by Blockstream was hit by an attack that siphoned off approximately 3,980 BTC — valued at roughly $319 million — from its federation wallet. The balance plummeted from around 4,200 BTC to just over 207 BTC in a single event. The perpetrators, who claimed to be “white hat” security researchers, left behind an on-chain message stating that they were ethical hackers and requesting that the team reach out to them.
The sidechain’s bridge infrastructure was immediately shut down, and exchanges were instructed to halt all deposits and withdrawals of the sidechain’s native token while the team investigates. The attackers appear to have exploited a vulnerability in the Peg-out Authorization Key system, which normally requires authorization from 11 out of 15 signing members before funds can be moved.
According to later statements, the exploit was traced to a software bug rather than a compromised signing key. The team behind the sidechain confirmed that no additional keys were breached and that the funds were extracted through a flaw in the underlying protocol’s code. Industry analysts are still debating whether the white hat attribution is genuine, but the fact that the stolen coins were transferred directly to Bitcoin addresses without being run through mixing services has lent some credibility to the claim.
## Bitcoin ETFs See Strongest Three-Week Inflow Streak
Spot Bitcoin exchange-traded funds in the United States recorded their most robust three-week inflow period of the year, attracting a combined $3.8 billion in net investments. In the most recent week alone, the funds drew in nearly $987 million, pushing total assets under management across all Bitcoin ETFs to over $101 billion.
Cumulative net inflows since launch now exceed $55 billion, signaling sustained institutional and retail appetite for Bitcoin exposure through regulated investment vehicles. The strongest single day of inflows came mid-week, when funds pulled in over $730 million — the highest daily figure since mid-January. Bitcoin’s price held firm above $80,000 during the period, though it has yet to convincingly reclaim its 50-week moving average, a technical level widely regarded as a key indicator of sustained bullish momentum.
## AMC CEO Fires Back at Robinhood Over Tokenized Stocks
A public spat between AMC Entertainment’s CEO Adam Aron and the retail trading platform Robinhood escalated this week after Robinhood launched tokenized versions of AMC stock on its blockchain ecosystem. Aron took to social media to condemn the move in stark terms, calling the practice “contemptible, outrageous, disgusting, detestable, inexcusable, and vile,” and questioning the legality of issuing tokenized securities without the company’s consent.
Robinhood co-founder Vlad Tenev responded with a dismissive query about what the concern was, prompting Aron to launch another scathing rant accusing Robinhood of “shocking and shameful” conduct and suggesting the company was ignoring US securities laws. Robinhood’s chief legal officer, a former SEC commissioner, fired back with a confident rebuke, essentially inviting AMC’s legal team to come forward and be educated on the matter.
The exchange highlights growing tensions between traditional publicly traded companies and the emerging market for tokenized equities on blockchain platforms. While retail traders have embraced tokenized stocks for their accessibility and speed, legacy companies are grappling with the implications of digital representations of their equity being issued without their involvement.
## 21 Major Financial Institutions Announce Stablecoin Consortium
A coalition of 21 leading financial institutions, including Bank of America, Goldman Sachs, Citigroup, Deutsche Bank, UBS, Santander, MUFG, and Fidelity Investments, has announced plans to form a new company dedicated to developing and issuing a US dollar-denominated stablecoin. The consortium aims to have the stablecoin live in the first half of 2027, pending finalization of the company’s structure and regulatory approvals.
The group also envisions expanding into stablecoins pegged to other G7 currencies, with a euro-denominated offering identified as the next priority. The initiative marks a significant deepening of ties between traditional finance and digital assets, and comes on the heels of a G20 joint statement endorsing cryptocurrency as a driver of broad-based economic growth. The statement committed member nations to establishing clear regulatory frameworks that support innovation while preserving financial stability.
## Kalshi Bans George Santos Permanently, Faces State-Level Legal Challenge
Prediction market platform Kalshi imposed a lifetime ban on former US congressman George Santos after determining that he had used insider information to trade on event contracts. Santos had allegedly been placing bets on markets directly related to his own political actions, including his attendance at the State of the Union address in February. The move represents one of Kalshi’s first lifetime bans since its founding in 2021.
Santos dismissed the platform as “unserious,” while Kalshi stood by its decision. Separately, New Jersey’s Attorney General filed a petition with the US Supreme Court seeking to settle a jurisdictional dispute over prediction markets. The case stems from civil actions brought by gaming regulators in at least 20 states, which argue that state gambling laws should apply to platforms like Kalshi rather than the federal Commodity Futures Trading Commission’s regulatory framework.
## Weekly Crypto Market Winners and Losers
Bitcoin closed the week up 2.6% at $80,234, with Ethereum gaining 2.3% to $2,513 and XRP rising 3% to $1.42. The total cryptocurrency market capitalization reached $2.72 trillion.
Among the top 100 cryptocurrencies, the biggest gainers were Pons, which surged 140%, Arbitrum with a 116% rally, and Dash climbing 66%. On the losing side, Pump.fun fell 13.2%, Canton dropped 6.9%, and Official Trump declined 4.1%.
## Arthur Hayes: BTC Could Hit $1 Million by 2030, But He’s Buying ETH
BitMEX founder Arthur Hayes told a major publication that a convergence of factors — including the collapse of the AI bubble, aggressive monetary expansion, and potential US yield curve control — could propel Bitcoin to $1 million by 2030. Hayes suggested that the $58,000 level was likely the cycle bottom and that a grinding rally lay ahead.
Interestingly, Hayes revealed that his best risk-adjusted bet in the crypto space right now is Ethereum, not Hyperliquid or other DeFi platforms. He said he has been building a significant ETH position, citing the potential for three- to five-times gains in the near term.
## El Salvador’s Bitcoin Accumulation Under IMF Scrutiny
El Salvador’s accumulation of Bitcoin following the first review of its IMF financing program in June 2025 was entirely funded through private donations, according to the IMF. The watchdog’s findings indicate that the country’s Bitcoin Strategic Reserve grew without the use of public government resources.
The IMF also noted that operational control of El Salvador’s Chivo wallet has been transferred to a private operator, with the government retaining a minority stake and custodial responsibilities. President Nayib Bukele rejected the coverage as “fake news,” insisting that what was transferred were Chivo shares — a move announced over a year earlier — and not the Bitcoin reserves themselves.
## Fake Claude Desktop App Distributes Crypto-Stealing Malware
Cybersecurity researchers have uncovered a fake desktop application impersonating AI developer Anthropic’s Claude that installs RevStealer malware on victims’ computers. The malicious software targets Windows systems and is designed to siphon cryptocurrency wallet data, browser credentials, password manager records, VPN configurations, messaging data, screenshots, and sensitive documents.
The malware has been distributed through GitHub repositories, gaming cheat sites, and a particularly convincing fake project promising free access to Claude Opus 5. RevStealer reportedly targets over 50 different cryptocurrency wallets, making it one of the most wide-ranging crypto-stealing threats discovered in recent months.
## Hyperscale Data Ends Michigan Bitcoin Mining Operations
Hyperscale Data has shut down all Bitcoin mining operations at its Michigan facility as the company pivots to preparing the site for an artificial intelligence data center. The facility’s mining equipment is being sold off, and all miners have been powered down.
The site has attracted a major AI customer under a 10-year master services agreement that includes two optional five-year extensions, potentially generating over $1.2 billion in revenue across the full 20-year term. Hyperscale has also significantly reduced its Bitcoin holdings, which fell from over 1,000 BTC at the end of July to approximately 215 BTC currently, as capital was redirected toward the AI infrastructure buildout.
## Frequently Asked Questions (FAQ)
**Q: What is the Liquid Network and why is it important?**
A: The Liquid Network is a Bitcoin sidechain built by Blockstream that enables faster and more confidential transactions for Bitcoin. It is used by exchanges and institutional traders to move Bitcoin more efficiently between platforms and offers features like confidential transactions and asset issuance on top of the Bitcoin protocol.
**Q: Were the stolen Bitcoins recovered?**
A: The article does not specify whether the funds have been recovered. The attackers claimed to be white hats and left an on-chain message inviting contact, but the outcome of that communication has not been confirmed.
**Q: What caused the exploit on the Liquid Network?**
A: Blockstream later confirmed that the L-BTC used in the withdrawal was created through a bug in the Elements software, which is the underlying technology for the Liquid sidechain. The attack did not involve a compromise of any signing keys.
**Q: Why are Bitcoin ETFs significant?**
A: Bitcoin ETFs allow investors to gain exposure to Bitcoin through traditional brokerage accounts without needing to manage private keys or navigate cryptocurrency exchanges. They have been a major catalyst for institutional capital flowing into Bitcoin.
**Q: Is tokenized stock legal?**
A: The legality of tokenized stocks remains a gray area. Robinhood argues its practices fall within existing regulatory frameworks, while companies like AMC argue that tokenization without their consent may violate securities laws. The matter is expected to face increasing legal scrutiny as more platforms explore tokenized equities.
**Q: What is the stablecoin consortium and what will it do?**
A: The consortium is a group of 21 major financial institutions pooling resources to develop a new US dollar-denominated stablecoin. The stablecoin aims to provide a regulated, institutional-grade digital dollar for use in payments, settlements, and other financial applications.
**Q: What is RevStealer malware and how does it work?**
A: RevStealer is a Windows-based malware strain designed to steal cryptocurrency wallet data, browser credentials, and other sensitive information. It is distributed through fake software downloads and is designed to leave minimal traces on infected systems.
## Conclusion
This week underscored both the promise and the peril of the cryptocurrency ecosystem. The Liquid Network heist exposed the vulnerabilities that still exist in Bitcoin’s layer-two infrastructure, even as Bitcoin ETFs and institutional stablecoin initiatives point toward deepening mainstream adoption. The clash between traditional companies like AMC and blockchain-native platforms like Robinhood signals that legal and regulatory frameworks are still catching up to rapid innovation. Meanwhile, threats like RevStealer remind users that security awareness remains critical in an era where digital assets are increasingly targeted. As the market digests these developments, one thing is clear: the crypto landscape is evolving at a pace that demands constant vigilance from participants at every level.
Thank you for reading
