Weekly Recap: Ledger Blames an Organized Group for Wallet Implants

gm, Defiers!

Ledger spent the week tracing tampered hardware wallets from one Southeast Asian reseller to European stores, and on Thursday it blamed an organized group that worked for months. Bitquery counts $102 million taken from 324 wallets. The same week, a Wall Street Journal report said Tether paid a firm co-owned by Bo Hines while he led the White House push for the GENIUS Act, and the EU named USDC its first significant e-money token.

Onchain, Starknet opened a vote on leaving Ethereum to become its own Layer 1, while L2BEAT data showed almost no L2 value sits on chains where users can exit before an upgrade. Uniswap and PancakeSwap each moved to pay liquidity providers more, and Jupiter's 1,000x YOLO product logged $1 billion in volume in a day. Richard Heart was detained in Istanbul on an Interpol notice, and HEX fell 31%.

Enjoy!

As of 21:13 UTC, Oct. 16. Data: CoinGecko, Aave, Hyperliquid. Full list

WATCH

STRK’s L1 Bet: Eli Ben-Sasson on Starknet’s Exit Plan

Camila Russo asks StarkWare CEO Eli Ben-Sasson why Starknet is weighing a move off Ethereum, what has to be decided first, and when holders vote on a design. Watch the full conversation.

Top Stories This Week

Ledger Blamed an Organized Group for Its Wallet Implants

The week started with a second tampered Ledger from MediaMarkt in Germany. On Tuesday, Ledger said the implant reads the recovery phrase off the screen and sends it over LTE, and Genuine Check cannot detect it. Mark Karpelès found one in a Flex bought at Singapore's airport, MediaMarktSaturn pulled Ledger products in 11 countries, and Ledger halted sales in seven Asian markets. On Thursday, Ledger said an organized group spent months and millions fitting implants to genuine devices and reselling them. Authorized sellers must now keep stock off shelves. Every confirmed loss still traces to CryptoBilis buyers, and Ledger has not given a victim count. Our guide sets out what owners should do.

Tether's Payments to Hines Came to Light as the EU Named USDC Significant

Tether paid a consulting firm co-owned by Bo Hines while he led the White House push for the GENIUS Act, The Wall Street Journal reported. The firm, Nxum, has earned $6.3 million, and the Journal says Hines pushed to extend the deadline for exchanges to drop noncompliant stablecoins from 18 months to three years. Nxum says Hines was recused. In Europe, the EBA classified USDC as the EU's first significant e-money token, which moves supervision of Circle's French issuer to the EBA from Nov. 12. ESMA told crypto firms to wind down noncompliant stablecoin services by Jan. 8, including custody and transfers.

Starknet Opened a Vote on Leaving Ethereum

Starknet opened a non-binding poll on researching a move to an independent, post-quantum Layer 1. By Thursday afternoon, 99.9% of the 272 million STRK that voted backed research, about 3.7% of circulating supply. On our livestream, StarkWare CEO Eli Ben-Sasson said no Ethereum L2 can be quantum secure if Ethereum is not. L2BEAT data shows a second dependency: almost none of the $41.3 billion on Ethereum L2s sits on Stage 2 chains, where users can exit before an upgrade. This week, HashKey Chain's administrator swapped a contract for six minutes and moved a user's 142,818 USDT without a signature. The vote closes Oct. 22.

DEXs Moved to Pay LPs More as 1,000x Products Drew Volume

Uniswap Labs launched an ETH/USDC pool with separate buy and sell fees that charge a surcharge after sharp moves, so LPs keep part of what arbitrage bots take. PancakeSwap's Kitchen proposed raising the LP fee share to 88% and cutting CAKE emissions by 69%. By our arithmetic, the cut CAKE is worth about $12.7 million a year, against a $62 million fee gain the Kitchen estimates on 2025 volume. On the trading side, Jupiter said YOLO hit $1 billion in volume in under 24 hours at up to 1,000x leverage, with profits paid from a house pool that can queue them. Papertrade, built on the same model, showed $32.4 million in net trader losses two days after launch.

Richard Heart Was Detained in Istanbul

Turkish police detained Richard Heart in Istanbul under an Interpol Red Notice, NTV and Sözcü reported. Interpol's public record names Finland and lists aggravated tax fraud; a U.S. judge dismissed the SEC's civil case against him in 2025. Ethereum HEX fell 31% in 22 hours after the reports, and thin pool liquidity makes large sales costly. The same day, investigator Specter renewed his claim that Tornado Cash withdrawals into Heart's ProveX campaign came from earlier Heart-linked funds, a link no one has confirmed. It was the most-read story on The Defiant this week.

Other Stories

Three Ledgers Claimed More Than They Held — NEAR Intents' postmortem traced its $3.8 million loss to refunded deposits it kept counting, bOSMO paid 50% too much per redemption, and Pirate Chain's bug created 39.8 million ARRR.

MSCI Adopts Rules Putting Strategy and Metaplanet at Risk of Index Removal — MSCI publishes the final list on Nov. 11, and changes take effect after the Nov. 30 close.

AMC CEO Says Company Won’t Consent to Robinhood Stock Tokens in US — nine issuers have objected to OKX-ICE's planned venue, while Robinhood reported $15 billion in stock-token trading on its chain.

US Wholesale Inflation Accelerates to 6.3% as Bitcoin Slips — consumer prices rose 3.7% the day before, and traders raised the odds of an October Fed hike to about 27%.

BNY and Citadel Securities Use Tokenized Treasury in Overnight Repo — the trade links a private digital ledger to short-term financing.

Babylon Advances Native Bitcoin Collateral Plan for Aave V4 — BTC would stay on Bitcoin while backing stablecoin loans, with liquidators paid in WBTC.

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