ROLLUP: Blue Wave, Black Swan | $6B Binance Heist | French Bank Robbed | ETH Goes Quantum-Proof

A blue wave and a black swan. Democrats sweep Congress, markets whipsaw into a $2 trillion selloff, and Bitcoin holds its 50-week moving average through the biggest heist in history: $6 billion stolen from Binance. Ryan and David break down how North Korea pulled it off, how a French bank got robbed with crypto as the getaway car, Ethereum's December 2028 quantum-proof deadline from DevCon, and Coinbase insiders' new sell plans. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near2026 🌍 RIPIO | LOCAL CURRENCIES, ONCHAIN https://bankless.cc/ripio 🛡️VIZOR | THE WALLET ZCASH DEVS USE https://bankless.cc/vizor 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless --- TIMESTAMPS 0:00 Intro 1:57 Blue Wave: Democrats Sweep Congress https://x.com/DCinvestor/status/2117789052573544873 3:33 $2 Trillion Erased: AI Bubble Popping? https://x.com/KobeissiLetter/status/2118362154558779411 https://pbs.twimg.com/media/HWX6J1hXwAAXczz?format=jpg&name=medium 7:41 Bitcoin Holds the 50-Week: Early Bull Intact? 10:59 NEAR AI Red https://near.ai/blog/the-right-to-run 11:44 Will the Dems Come for Crypto? https://x.com/0xGrimes/status/2111584181562290268 https://x.com/caprioleio/status/2118125380741795929 https://x.com/WatcherGuru/status/2118006193276805427 https://x.com/EleanorTerrett/status/2118041922011021418 https://x.com/hosseeb/status/2118080207664062720 https://x.com/TrustlessState/status/2118043617650491467 21:11 Binance Hack: The $6B Heist, 7 Days Later https://www.fbi.gov/investigate/cyber/alerts/2026/north-korea-responsible-for-6-billion-binance-attack https://x.com/zachxbt/status/2116030284261179538 https://www.binance.com/en/proof-of-reserves https://www.coindesk.com/business/2026/11/03/binance-s-usd6-3-billion-hack-began-with-a-fake-job-interview-exchange-says https://x.com/binance/status/2117626126214504729 https://x.com/hosseeb/status/2117650872603955542 27:26 THORChain & the Laundering Fight https://x.com/FBICyberBranch/status/2116660730745299426 https://thedefiant.io/podcasts-and-videos/podcast/thorchain-refused-to-block-the-usd387m-bitget-hacker-here-s-why-or-chad-barraford 32:49 North Korea: Too Close to the Sun? https://www.theblock.co/news/regulation/2026-11-02-kim-jong-un-sister-rejects-fbi-claims-linking-north-korea-binance-hack-432344 35:45 Polygon's Hard Fork & the Validator Bribe https://forum.polygon.technology/t/pip-proposal-recovery-of-funds-held-in-blocked-addresses-following-the-polymarket-and-binance-incidents/22497 38:25 How to Rob a Bank: Crypto Was the Getaway Car https://x.com/gregory_raymond/status/2117864901108432999 https://x.com/Jrag0x/status/2117878442309906695 48:37 DevCon 8: Ethereum Post-Quantum by 2028 https://x.com/EFDevcon/status/2117497506007576631 https://x.com/ethereumfndn/status/2117717427920498698 51:17 The Ethereum Economic Zone https://www.kucoin.com/news/flash/ethereum-economic-zone-unveils-three-cross-chain-breakthroughs-at-devcon 52:57 L2Beat Becomes ETHBeat https://x.com/ethbeat_org/status/2117913893796225035 https://ethbeat.org/crops 54:08 Vitalik's Keynote Controversy https://x.com/ethereumfndn/status/2117500382977102044 https://x.com/gakonst/status/2117668817082155157 https://x.com/uttam_singhk/status/2117673754574651760 https://x.com/fede_intern/status/2117993844159438993 58:58 Coinbase Earnings & Armstrong's Sell Plan https://www.fool.com/earnings/call-transcripts/2026/10/30/coinbase-coin-q3-2026-earnings-call-transcript/ https://thedefiant.io/news/cefi/coinbase-ceo-armstrong-adopts-plan-to-sell-up-to-1-31-billion-in-shares 1:02:53 STRC Back at $100 https://x.com/Strategy/status/2118036238741688626 --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03David Hoffman?

  Bankless Nation, it's the first week of November. We got a blue wave and a black swan. We got the midterm results in. First, the markets hated the Democrat sweep. Then it loved it the day after the midterms. And now on Thursday morning, we are seeing some of the worst selling that we have seen in many, many years. The worst decline in both the Nasdaq and the S and P since something like 2018. In just the first 40 minutes of trading, the S and P 500 has raised $2 trillion in the market cap. There was a midterm rally right after the midterms got over, and that's all completely gone. Crypto is getting hit as well, but I would say not as bad. Was this because of the midterms? Or was this the AI bubble popping? Or was this something else?

• 0:47Ryan Sean Adams?

  I don't know, David. It seemed like we were just out of the woods on the crypto side from the biggest hack in crypto history and the biggest heist ever, $6 billion Binance hack. That happened last Friday. Crypto went down, then it was recovering. Things looked good, and now we have this AI sell-off to contend with. But we got to go over the details of the Binance hack and put it in historic context and actually go through the retrospective of what happened. And it also wasn't just Crypto Bank, a major crypto bank that was hacked last week. A regular bank was hacked as well, and they used crypto as their getaway car. I want to tell you about this because last week we posed the question, hey, can this type of thing happen to traditional banks? Fiat, if so, how?

• 1:27David Hoffman?

  I thought trad banks are safe.

• 1:28Ryan Sean Adams?

  They're not safe, okay? I want to give you the story of how hackers got in, what they did with the funds, and what's going to happen next.

• 1:35David Hoffman?

  Also, it's Ethereum DevCon happening in Mumbai, India in the moment. So we get to go down onto the ground, get some takes from people who are there on the streets. There was updates to the lean roadmap for Ethereum from Justin Drake, making Ethereum post-quantum even sooner. We got updates from Layer 2B and also just a sample of what Ethereum and Vatalik are focusing on from the DevCon keynote that we get every single DevCon. But first, we got to just talk about the markets. The markets can't seem to make up their mind.

• 2:02Ryan Sean Adams?

  Yeah, there was a Democrat sweep, of course. This is the blue wave. The Senate flipped in favor of the Democrats. 54 senators elected, I think, two other seats in contention. That is a healthy majority. Also, the House flipped blue as well. So there's a full sweep, both chambers, pretty historic win. Both chambers flipping in this way. And also the numbers, governor races, like definitely this was a blue wave. Some calling it a blue tsunami. I don't know if I'd go that far, but this is definitely the Democrats pushing in to recent Republican gains. I think the answer to why is probably everyone, everyone kind of knows. This seemed like a self-inflicted wound from the Trump agenda. I think DC Investor had a, had a take where he just said, look, you know, people aren't

• 2:46Ryan Sean Adams?

  into the war. Energy prices going up, CPI going up. It seemed like Trump wasn't focused on affordability.

• 2:54David Hoffman?

  Trump had a mandate, and he just floundered all of it.

• 2:58Ryan Sean Adams?

  Yes. So even on things like border security, which was somewhat popular, the way it was implemented, ICE in cities with masks and people. I mean, this, this seemed like it was coming, and certainly Democrat voters showed up for it. But the question as to like what's going in the markets is still to be determined. In fact, David, maybe we should, in a minute, you could pull up some charts because a lot of this is playing out over real time. But you started, you said this was one of the largest crashes that we've seen in recent memory on the S and P, at least in terms of like volume and time scales here?

• 3:33David Hoffman?

  Yeah, I keep having to update my numbers on the S and P, but in the last just day and a half of trading, the S and P is down 4%. 4% is just gargantuan for the S and P. That takes it all the way back to June 2026 prices. But just like the, the level of red on this candle, it, it straight, straight down, straight down. And the QQQ Nasdaq is even worse because Nasdaq is just so heavily tech-oriented. Nasdaq is down 6%, taking it all the way back to April 2026 prices. And then you can kind of zoom into specific sectors. And so State Street Tech Sector ETF, that's down as 7%, Semiconductors, SOXX, is down 12%, just an index of semiconductors.

• 4:16David Hoffman?

  And then we can get into some individual names like Nvidia. Nvidia down 8.6%. Intel down 7%. But not only is Intel down 7%, but Intel is off, off of its all-time highs by 61%. MU Micron, just an AI build-out favorite, down 14% on the day, but also just down 45% from its all-time highs. There are some assets that I think are getting buffered from this, from this massive sell-off. Like Amazon is down 2%, but on the week it's flat. You know, Google's down 1.5%, but it hasn't gone down since it reported its earnings. Apple's actually doing okay. So if you're an Apple hortel, you're down 1.5%, but you're at your all-time highs.

• 5:00David Hoffman?

  So the AI infrastructure build-out companies are just getting absolutely walloped. A lot of the AI spenders, Amazon, Google, these aren't doing so bad, even though the whole market is down this week. And so I think you could definitely say that this is AI bubble popping, as well as you have some actual specific assets that are selling off specifically because of the Democrat blue wave, and these would be all the Elon assets. So Tesla's down really, really bad.

• 5:32Ryan Sean Adams?

  I would say, I would say still too early on this Thursday to call this an AI bubble pop. It does seem like a correction. Like, will it, you know?

• 5:41David Hoffman?

  It's been correcting, though. Micron down 60%, Intel down 40% from its all-time highs?

• 5:48Ryan Sean Adams?

  Absolutely. But these sectors have had tremendous games. I guess, I guess in general, we're back to what? Summertime in the S and P, summertime in the Nasdaq?

• 5:56David Hoffman?

  Yeah, so if you're an AI build-out, like semi or like Micron doing selling memory, you're back as bad as possible, which is back to April. If you're a Google, if you're an Amazon, you're back to like June.

• 6:10Ryan Sean Adams?

  It's weird, though. It's, it's hard to call the, the market reaction a result of the, the blue wave really, and the Democrats taking control of both, both chambers of Congress. Because it was, originally it was up, right? So like, we had kind of a run-up.

• 6:25David Hoffman?

  We had a very green day that everyone was like, oh, turns out like getting, kicking Trump's chaos out of office is actually good for a variety of reasons.

• 6:34Ryan Sean Adams?

  This morning, Thursday morning, everyone changed their mind. Everyone just suddenly changed their mind.

• 6:39David Hoffman?

  Yeah. Well, my attitude is that this is, there was AI tech stock sell-off going into the midterms, and then midterms took center stage, and we focus on that. And now that midterms are in the rearview mirror, actually, people still want to sell tech stocks.

• 6:54Ryan Sean Adams?

  I guess so. There were some specific losers, like, you know, Trump. The Trump media asset was down like 30%. Even this was on the back of the election results. I wonder what it's at this morning.

• 7:05David Hoffman?

  And then there's also the Trump meme coin. Don't look at that chart. That chart is down 30% post the blue wave. And so, and as I kind of said, like Tesla and SpaceX, while everything else was rallying post-midterms, Tesla, SpaceX were down bigly just because Democrats are going after Elon. So there were specific assets that did respond, as you would expect them to, to the blue wave. Overall, though, you can kind of just look at the AI industry and see that the AI build-out assets have been down the most.

• 7:41Ryan Sean Adams?

  All right, so AI markets in carnage. Let's talk about our beloved crypto assets because it seemed like on Wednesday, we were out of the woods. We just survived this Binance hack somehow, some way. We were above on Bitcoin, the 50-week moving average, which has been a key. We're in early bull cycle territory. We somehow stayed above that. Now, where are we at the time of recording? What's Bitcoin price?

• 8:05David Hoffman?

  Yeah, post-midterms Bitcoin jumped up to above 80,000. So we got above 80,000 for a moment, almost touched 81,000. And now we have set a new low, just a smidge of a new low, but a new low nonetheless, of 75,500. We're up to 76,000 right now. Maybe the worst is over.

• 8:22Ryan Sean Adams?

  Do you know what the 50-week moving average is, David?

• 8:25David Hoffman?

  Tell me.

• 8:26Ryan Sean Adams?

  It's right at 76.

• 8:27David Hoffman?

  76?

• 8:28Ryan Sean Adams?

  Yeah, right at 76. Is 75.9 or something like that?

• 8:34David Hoffman?

  There it is. Yeah, there it is.

• 8:36Ryan Sean Adams?

  So we're just hanging above it. Like, this, this is, you know, Galaxy, Alex Thorne talked about the 50-week moving average. Michael Nato from the DeFi Report talks about the 50-week moving average. In previous, early bull cycles, we've always stayed above that. And even in the Binance hack, we were kind of like bouncing on that 76K number. We bounced back up, which is a bullish indicator, back to 80. Now we survived that. The question is, are we going to be able to survive the AI sell-off with the Bitcoin bull market above the 50-week intact?

• 9:10David Hoffman?

  Yeah, not all assets kind of responded the same. So Bitcoin set a new local low. ETH did not. ETH actually performed, has performed better than Bitcoin on the week. I think Bitcoin is down like 2% or 3% on the week and ETH is kind of flat on the week. Zcash as well is kind of holding its own at the moment. Like, we'll see if that continues to play out. Overall, I would say crypto has fared this sell-off. Like, it's gone down, but I wouldn't say it's gone down uniquely. And so as a crypto holder, I'm somewhat pleased that like prices are a little bit more favorable. But my, my industry, my assets aren't getting hammered specifically.

• 9:50Ryan Sean Adams?

  I mean, I was ready to come into this episode fully bullish before the sell-off this morning, which was just like, oh my God. I was expecting after a 6 billion, the largest crypto exchange get hacked, which by the way, we'll talk about in a little bit. I would expect to be down like 15%, down 20% on Bitcoin in a week. And yet we recovered. And that was a, you know, like a bullish fact and now we're back down again. So overall, I would say I'm like, it's just still feels net bullish from a market structure perspective. Of course, if there was a massive AI sell-off, of course Bitcoin and crypto, we're going to, you know, take it on the chin for a bit. But there's still a lot of strength here in the numbers I'm seeing and the Binance hack and our recovery from that really proved that.

• 10:31David Hoffman?

  Right. Resting on the 50-week moving average means that you're getting a great deal. But also we could break through it and it could be even worse. The AI sell-off could continue. You know, Ben Cowan could be right. We could go set like a new actual low, low. You know, now place your bets, place your bets. I think there's more to talk about with like, are the Dems, now that the Dems are in power, are they going to come after crypto? Are they going to come and mess up, mess up, mess us up and get some retribution? Before we talk about that though, we've got to talk to our friends and sponsors over at Near AI. They have a new product called Near AI Red. And this is for people who don't have access to things like OpenAI or Anthropic's top-tier coding models.

• 11:12David Hoffman?

  Because you are not on the inside of the AI tech elite, you are not given permission to have uncensored coding models to defend your systems. If that's you, if you're on the outside, Near AI Red is what you need. It is uncensored, obliterated models with all the safety restrictions removed. So you can defend your systems against AI attackers. So don't get refused by your AI provider while trying to protect yourself. Use Near AI Red and keep your shit secure. There is a link in the show notes.

• 11:43Ryan Sean Adams?

  David, you sent me this meme right before we started recording. Is this an actual Warren Buffett quote?

• 11:49David Hoffman?

  This is the funniest meme I have seen in forever. It is a, for the listeners, it is a picture of Warren Buffett with a quote next to him saying, freak the fuck out and sell everything right now. It's fucking over.

• 12:02Ryan Sean Adams?

  It's so funny how in this market, just like the, I mean, the VIX is hitting like 2018 highs, but we are whipsawing from like, oh, we're so back to it's so over in 24-hour increments. So maybe Warren Buffett has some good advice for us here. All right. So with Democrats back in charge of Congress, the question is, what does that mean for crypto? Are they going to come and F up crypto? There's a number of different takes on this, David, and I'd love to get yours. First of all, we should probably zoom out and say the structure of a Republican president and a Democratic sweep where it's sort of divided. You have the executive branch, one party, and you have another party with the halls of Congress. Markets have traditionally liked that.

• 12:44Ryan Sean Adams?

  They sort of like the standoff. They like the, the balance of power. It means

• 12:48David Hoffman?

  The gridlock?

• 12:49Ryan Sean Adams?

  Yeah, they like the gridlock. That means no, no

• 12:51David Hoffman?

  You guys aren't going to get anything done. Thanks. We will take control from here.

• 12:55Ryan Sean Adams?

  Yeah, yeah. So traditionally that has been good. I think here's a chart. Stocks after the midterm, like doing quite well in the three-month, the six-month, nine-month and the 12-month. When it's been Republican president, you specifically, and then Democrat-controlled House and Senate. That said, of course, Democrats, at least previous versions of Democrats, you're thinking of maybe Maxine Waters, you're thinking of maybe Senator Elizabeth Warren. They have been fairly hostile to crypto. And we should recall that they are coming back into power with some of these key positions. So Warren leads Senate Banking. She has previously, Waters has been on the House Financial Services.

• 13:35Ryan Sean Adams?

  These are former members of the anti-crypto army. So that's also seems bearish on its face. So like, what's your take on this? What's your way in? Do you think this will be okay? Do you think it will be bullish? Do you think it'll be bearish for crypto?

• 13:51David Hoffman?

  Well, I think you can kind of sense that the markets are pricing something in. So the Trump tokens, the Trump meme coin, WFLI, and also Trump media assets in the equity side, those are down bad. And I think that Democrats are going to come and like seek retribution for Trump using the crypto industry as his grifty piggy bank. Just extrapolating, just extracting billions of dollars from the crypto industry. I do not think that is the same thing as them and coming and just like cudgelling the crypto industry in the same way that they did it under the Biden administration with Gary Gensler. I don't think that there's

• 14:26Ryan Sean Adams?

  You don't think they're just going to be like, oh, crypto is corrupt, Trump is corrupt, Trump uses crypto, let's just nuke all of crypto from orbit. We're just like, take it all down.

• 14:34David Hoffman?

  Yeah, I don't think that that is happening. What I do think is on the table is that the banks get a second attempt at stablecoin yield with the Clarity Act. And so maybe the banks go into Maxine Waters and Elizabeth Warren and being like, hey, let's like revise the Clarity Act to be more favorable for the banks. I think we could see a round two on the Clarity Act. But in terms of like stamping out the crypto industry, I, I don't see any evidence for that. I think there is no evidence for that to say that they want to do that. And I think it's far more likely that they've learned their damn lesson. Like, they got walloped by crypto. And I think their battles, their political battles, and I know like crypto was kind of,

• 15:14David Hoffman?

  they were trying to get some political wins, right? Like the Elizabeth Warren graphic of I'm recruiting an anti-crypto army. That wasn't really smart calculus by her then. And it's even worse calculus to do something like that now. AI is the bigger fish to fry. And so like, why, why would they go out of their way to come after crypto?

• 15:32Ryan Sean Adams?

  Yeah.

• 15:33David Hoffman?

  I don't think we are very high up on their priorities.

• 15:35Ryan Sean Adams?

  I'm not super bullish that say Elizabeth Warren has, has learned her lesson and will not mess with crypto. But I am more bullish on this, your second point, which is like they have bigger fish to fry. I think it'll be an anti-data center army that Elizabeth Warren and

• 15:48David Hoffman?

  Elizabeth Warren is recruiting an anti-data center army. That is probably the new thing.

• 15:52Ryan Sean Adams?

  The other thing I would say is when the anti-crypto army started in 2022, 2023, that era, right, was post-SBF, is a different world. The banks and BlackRock and kind of the big financial money that supports a lot of these Democrat legislators. They were on the sidelines. They had not yet entered crypto. And so their incentive was like, hey, slow down, slow down, slow down. Till we have ETFs, till we figure out a path to tokenized securities. Now I think they're on more on the side of like full steam ahead. Like they see the opportunity, Larry thinks, he's opportunity in tokenization, right? And they're fully bought in on crypto and there's some of the Democrats' funders as well. So ironically, you have kind of like big asset manager, Wall Street, sort of on the side of crypto.

• 16:38Ryan Sean Adams?

  And that's different than it was in 2022, 2023. So, and like what we've seen so far, this was mild asks from the Democrats. Of course, it is incredibly early, but this is Haseeb tweeting out that Maxine Waters, she's proposed something called the Crypto Investor Bill of Rights. And it would include things like all exchange withdrawals have to happen within 24 hours, customer assets segregated, bankruptcy remote, monthly proof of reserves. Like some of this stuff is great. And honestly,

• 17:06David Hoffman?

  And also we're already heading that way anyways.

• 17:09Ryan Sean Adams?

  We're headed that way anyway. That's good. That's reasonable. And honestly, like uncovering any sort of Trump or Trump family grift in crypto. I mean, you made the point. You said this is just like medicine that we have to take, right? You said this. One of the biggest constraints on crypto's upside was Trump turned crypto into his grift piggy bank. This is probably a rough but necessary, necessary exorcism for the crypto industry to get rid of sort of Trump. So they can come after Trump corruption, Trump meme coins, all they want.

• 17:37David Hoffman?

  Welcomed. Welcomed behavior.

• 17:39Ryan Sean Adams?

  That's very good for crypto, right? It's like, I feel like crypto always knew doing this kind of like Trump thing was a little like a deal with the devil.

• 17:47David Hoffman?

  A deal with the devil. Yeah. But now, now we get all the upside. So long as the Democrats leave the SEC and CFTC alone and allow Paul Atkins and Mike Selig to continue what they're doing, which is good, responsible, productive legislation. So that, so long as that stays put, they can do whatever they want with all Trump grift crypto stuff. Have at them.

• 18:09Ryan Sean Adams?

  That's a happy, happy case though. I gotta say, David, it's not clear whether they'll take that path or they'll just

• 18:14David Hoffman?

  Right. If they'll go even further.

• 18:16Ryan Sean Adams?

  Anti-crypto, like everything. And that could also happen as well.

• 18:20David Hoffman?

  I'm hoping that the absolute overperformance of the crypto packs, the fair shake, all, all the crypto money, like, can't that be a carrot for them to like, agree with us, right? Like they like money. We all know the Democrats like money. All politic, all political parties like money. Maybe they would want to get some of that money by doing stuff that we want.

• 18:42Ryan Sean Adams?

  I'm just hoping it's a "don't notice us." The problem is, we have big hacks in the news, like the Binance hack, $6 billion. Like, everybody notices that. It's impossible for senators and legislators not to weigh in. And that's what we're going to talk about next. Binance was hacked. This is the biggest heist in human history. We've got the retrospective of how this happened in the first place. Also, David, I gotta tell you about the French bank.

• 19:05David Hoffman?

  The actual, the normal bank that got hacked? I thought banks were immune to getting hacked.

• 19:09Ryan Sean Adams?

  They are not. We'll talk about all this and more, but before we do, we want to thank the sponsors that made this possible.

• 19:14David Hoffman?

  Your checking account isn't public, so why should your crypto be? As AI gets more powerful, your privacy gets weaker. Connecting your identity to your financial history, on-chain or off, is the easiest it's ever been and will only get easier from here. Every data breach adds another piece to the puzzle, and every public transaction leaves a trail back to you. And when your wealth is visible, you become a target. Money that can be seen can be stolen. Being in control of your money should include controlling who sees what you do with it. Zcash fixes this. Zcash is private digital money, with privacy enforced by zero-knowledge cryptography. Zcash shielded transactions that you send and spend without publicly revealing who you're paying or how much. When it comes to privacy, there is no second best.

• 19:54David Hoffman?

  Get started with Zcash using Vizor, the wallet Zcash devs and enthusiasts use to encrypt their money. Zcash wallets are non-trivial, and Vizor goes the extra mile to make sure your money and privacy are fully protected. Open source, self-custodial, fully private. Use the link in the show notes to download Vizor on mobile or desktop. Protect your future. Use Zcash. I've been trading crypto for almost a decade, and I've used so many different wallets, exchanges, aggregators, or front-ends. And I'm basically always looking for the same thing, just one interface with a deep liquidity across a bunch of chains and assets, where I can access markets like perps, earn yield, trade confidentially, and still control all of my funds. And I've never really found it, and I'm just always switching wallets, juggling gas fees, or getting eaten by slippage. But near.com feels fundamentally different to me.

• 20:38David Hoffman?

  I can do anything I want from any chain and keep all of my activity confidential. Crypto, tokenized assets, perps, payments, I can even earn yield confidentially. One account over 30 chains, confidential by default. It's the way that crypto ought to work, and it's powered by Near, which has moved over $30 billion cross-chain, uses post-quantum signatures, and has run over five years on mainnet with zero downtime. Near.com is the best way to be on-chain and be in control. Get 20% of your trading fees back on near.com using the bankless link in the show notes, not investment advice. The largest bank heist in human history, $6.34 billion hacked by North Korea. The FBI sent out an alert saying the DPRK, the Democratic Republic of North Korea,

• 21:21David Hoffman?

  was responsible for a theft of more than $6 billion from cryptocurrency exchange Binance. Specifically, the Trader Traitor, which is the Lazarus group.

• 21:34Ryan Sean Adams?

  Well, it's like a subgroup. Is it the same as Lazarus? They have these little sub-teams in North Korea.

• 21:39David Hoffman?

  It was North Korea. $2.85 billion was frozen and intercepted, mainly USDC and USDT. So $1.77 billion of Tether, $825 million of Circle, of USDC. Ripple froze $40 million. I've never actually seen them freeze, or at least I haven't remembered that they did that.

• 22:01Ryan Sean Adams?

  This happened so quick, didn't it?

• 22:03David Hoffman?

  So quick, yeah. Even WFLI, the same contract call that froze Justin Sun's assets, froze North Korea's assets. And then assets on Arbitrum. Arbitrum froze assets when, what was the other exchange? Bybit got hacked. They hit that same button again. So 8,426 Ether and 74 million Arb tokens were frozen by Arbitrum on Arbitrum and are presumably going to be returned to Binance customers.

• 22:33Ryan Sean Adams?

  This was the big one, though. This is the world's largest crypto exchange. It's always been sort of the Black Swan event that crypto has feared would happen is someday, some exchange is going to get hacked. This was not Binance's cold storage, but this was one of its hot wallets. And $6 billion, that's absolutely massive. I think the second-largest heist, you know, money heist in history is probably the Bybit hack, and that happened a year ago, is 1.5 billion. Right? So this is like a 3, 4x that. Now, it looks like $2.8 billion will be, you know, like, frozen. So there's still a question.

• 23:06David Hoffman?

  Frozen and returned, yeah.

• 23:06Ryan Sean Adams?

  Frozen and returned. There's still a question of what about the $3.2 billion? And there was some talk on Friday with all of the fear of the uncertainty out there as to whether Binance had the funds to actually back up its reserves, right? Could this be another FTX-type of unwind? So, pretty chaotic Friday. Binance came out, though, and they said they would provide coverage for the full $6 billion, okay? Even the amount that's still kind of frozen, they still don't have access to. They published proof of reserves, up to about 100% of the $6.3 billion in lost funds. They showed that there had been some proof of reserves there.

• 23:48Ryan Sean Adams?

  They took this out of their Seifu insurance kind of fund, which had, I don't know, a billion dollars or something. And the remainder was just like money that they had on the balance sheet. They pulled from other locations and they bought back the assets. So Binance, with a good, firm, kind of like, recovery response, and they published these proof of reserves too, publicly. So these could be, like, authentically verified that the funds were there. The hack, to begin with, is pretty concerning, obviously, and that calls into question, you know, Binance's handling of these funds. We'll talk about the details in a second. I will say their response was top-notch, though, including some of the transparency of what happened

• 24:28Ryan Sean Adams?

  and their response over the weekend to publish these proof of reserves, like, a fairly good response. I think that calmed down the market and was part of the reason that Bitcoin didn't lose 20%, that we were only down 5%, and that we rebounded so quickly.

• 24:43David Hoffman?

  Yeah, yeah. I mean, the core difference between this and FTX was that FTX had just so much contagion. And that was downstream of the other contagion from 3R's capital, so.

• 24:54Ryan Sean Adams?

  Well, it's also like, he was lying about it. He was like.

• 24:57David Hoffman?

  He was also lying, right. Whereas Binance was like an upstanding, valuable business that had cash on hand, so much cash on hand that it can just pay the customers the size of the loss of funds. And so, to your point, like, this sent Bitcoin down like $3,000 or $4,000, but not really anywhere near what you would expect from the headline "Binance hacked", the worst, like, fear headline that has been in our, you know, potential brains for years now. And so, people were bullish post that. It's like, yeah, Bitcoin got hit, but like, it wasn't that bad. That's how North Korea got access.

• 25:36David Hoffman?

  So I think this is kind of the thing worth reading about so that we can kind of see what AI attacks of the future look like. Whether or not it was, I'm sure AI was getting involved somewhere, but it wasn't really, like, AI-driven. They set up a fake job interview with a Binance employee. So somebody who works at Binance was given the opportunity to interview with another company. They gave this person a coding task for the job interview, but the said coding task that the person downloaded was actually malware, actually spyware. So that got onto that person's computer, because that Binance employee's computer was inside the Binance network. That software was able to spread to other people's computers,

• 26:20David Hoffman?

  which gave them permission to, like, run malicious code and gave access to move crypto, because one of the computers that the software got access to had the private keys. They abused an Ethereum feature called EIP7702. This is something with the smart contract wallet that Binance uses. But when, once they got access to that, they could make unapproved transactions approved and allowed them to transfer the funds outside the Binance's normal withdrawal process. So it was a social engineering attack, namely. And then you can imagine that, like, AI helped write the actual software to do some of the more sophisticated stuff behind the scenes.

• 26:56Ryan Sean Adams?

  It played out over months, too, right? So, you know, the first infiltration was detected in July, and then sort of they gradually kind of like ramped this out, social engineered this employee. But this employee was doing a job interview on a work laptop, downloading software on a work laptop, a fake company, completely socially engineered. You can kind of see how this type of thing would happen unless companies completely clamp down on the social engineering attack vector. This, of course, causes so many other ripple effects in crypto, and there's so many stories in the week, and we probably can't cover them all, but one to at least touch is probably the ThorChain story.

• 27:36Ryan Sean Adams?

  Because once North Korea hacked some amount of funds, and of course, this was many different assets, this is stablecoins, this is also Ether, this was even, we'll talk about, like, Polygon, tokens like that, then they have to launder these funds somehow. So they might use a protocol like Tornado Cash. They also commonly use something called ThorChain, which has some different attributes versus Tornado Cash, which is like, nobody runs Tornado Cash, it's just smart contracts. There's no, like, there's no engineers or there's no team involved. But there are validators in the case of ThorChain, so what happened here?

• 28:15David Hoffman?

  The difference, the comparison, is that the people running Tornado Cash software are Ethereum node operators. You're just running all of Ethereum, because all of the smart contracts lives on Ethereum. With ThorChain, the ThorChain is run by node operators. So there's a direct one-to-one relationship with the node operators of ThorChain and people running the transactions that are coming out of North Korea. So it's like as if you could go directly target the people who are running Tornado Cash software, which is not what you can do in Ethereum. Money was laundered through ThorChain, so like, TRX was sent through ThorChain, a bunch of Solana was sent through ThorChain, and then Bitcoin and Ether came out the other side, because those are the immutable assets.

• 29:00David Hoffman?

  The FBI sent out an alert explicitly naming ThorChain node operators, saying like, hey, don't process those transactions associated with the North Korean wallets. Like, obviously, not just ThorChain, but like, regular RPC node operators. Anyone who's like a service provider who manages these transactions, they're saying, hey, don't process those.

• 29:21Ryan Sean Adams?

  If you have the ability to freeze or stop processing these transactions, then stop processing.

• 29:27David Hoffman?

  Then don't do that.

• 29:28Ryan Sean Adams?

  Specifically, they named.

• 29:30David Hoffman?

  ThorChain node operators.

• 29:33David Hoffman?

  And I don't know what's going on behind the scenes there, but like if I was a Thorchain node operator, I would be very worried about not listening to the FBI. I know it's been in the social contract of Thorchains, like, hey, we don't censor transactions. We're totally neutral. We can't even stop it if we could. But like, interestingly, Thorchain had like a fault in the bug when there was an Ethereum block reorg. And so as a result of that, Thorchain, something bad happened and they stopped the Thorchain from processing blocks because there was a bug in the code. Then this happened on October 31st, which was right around the same time as the Binance hack. It was just completely adjacent. So

• 30:17David Hoffman?

  they clearly will stop running transactions, stop the Thorchain protocol when there's a bug in the code, but they have been resistant to doing anything else as a result of the hacks. I'm kind of confused as to why we haven't actually seen any stories about like the FBI raiding Thorchain node operators' houses. That's something that you would expect. But like, I don't know. My only plausible answer is that the FBI is running Thorchain nodes and the CIA is like, they're inside the Thorchain house. That's my only explanation. So like, why Thorchain node operators aren't in jail?

• 30:52Ryan Sean Adams?

  Either that or they're incredibly like bold, right? So I mean, I think there's the stance that if you do have a button, right, then, and if you can be regulated to go push that button, then the state will regulate you to push that button and probably should in these cases.

• 31:09David Hoffman?

  Probably should.

• 31:09Ryan Sean Adams?

  So the only answer is to go fully decentralize and not have the ability to do these types of things. But Thorchain is somewhat in the squishy middle. It's not like Tornado Cast, which just deployed a mutable code. Nobody could turn it off without turning off the entire Ethereum network. Thorchain can be, it's just like much more squishy. It can be censored, can be turned off, things can be reversed. But I saw a post, this is a podcast, the, one of the founders of Thorchain, it's from the Defiant, Thorchain refused to block the BitGit hacker. Here's why, you know, and they're talking, like, I just, I don't know what the incentive is to go, like, we've seen what's happened with, with

• 31:51Ryan Sean Adams?

  Roman Storm. If you're kind of a Thorchain operator or a dev, right, this is just like, the FBI has asked you politely to not do this. What are the next steps there? If it's not kind of hands off the buttons, complete decentralization, and you have some ability to press, like knock at the door type of step?

• 32:10David Hoffman?

  Not only that, but like, what gives him the like audacity to go on the Defiant podcast and being like, yeah, we don't, sorry, we don't do that. We don't freeze stuff. I know the FBI asked us not to, but like, yeah, fuck you. Like, we don't care. My only explanation is that they're working with the FBI and the FBI wants the information. Like, if you're running the RPC node, you have a specific vantage into the funds being routed and the FBI needs that to trace the money. That's my only explanation, is that like the Thorchain operators are NARCs.

• 32:45Ryan Sean Adams?

  It could be. Yeah, I have no idea. It's just an unexplained phenomenon going on. I do wonder, though, if this attack from North Korea was flying a little too close to the sun. And I know you had someone from TRM Analytics helps FBI and authorities kind of trace these types of things. I know you had them on last Friday to talk about this, but this is a story, Kim Jong-un's sister is apparently saying, coming out and saying, hey, this wasn't us. This wasn't North Korea. And I don't recall her saying these types of things in the past. This is a massive hack, biggest ever, international. The FBI was clearly involved, you know, seconds after receiving notice that this happened.

• 33:27Ryan Sean Adams?

  And I almost wonder at what point in time the US or other world authorities start to go on the offensive with respect to North Korea, right? This is a form of cyber warfare and the US or the countries have offensive capabilities here. They could even bounty it out such that, hey, if you can go and, you know, like get some of the $6 billion back and restore it, then maybe the US will pay a 10% bounty, maybe they'll bounty this out, bounding this out privately. Maybe the US will begin to go on the offensive here. If they did, and if they were doing that, we wouldn't know about it, right? This, we would, we would know about it maybe possibly after it happens and not before. But do you

• 34:10Ryan Sean Adams?

  think this is like a Do Kwon moment for Kim Jong-un? You think this, this hack is like, sort of like, wow, you've, you've tripped over something that has the rest of the world now coming after you?

• 34:21David Hoffman?

  It's, if so, then if it is too close to the sun, then we would have to say that this $6 billion hack was too close to the sun, but the Bybit, like $1.6 billion hack was not too close to the sun. We had Ari Redbird on after the Bybit hack and he was like, yeah, one of the big solutions here is like, allow people, vigilantes, to go get the money back and to say like, hey, if you get any of the $6 billion back from North Korea, we'll give you 10%. Do something like that. I feel like that's been a conversation. May, I don't know to what degree of money moves the FBI to become motivated, more motivated than $1.6 billion?

• 35:06Ryan Sean Adams?

  Well, I mean, it's a national security thing. It's like, it's like these hacks are a significant double-digit percentage of North Korea GDP and it's going right into their missile program.

• 35:14David Hoffman?

  I think it's like their number one source of revenue, not even close.

• 35:18Ryan Sean Adams?

  I mean, so it's a national defense reason why you'd want to restore these funds. I sort of just wonder if things are going on in the background that might, we might read a headline someday that some of these funds were mysteriously restored. Maybe Trump would, this would be a win for Trump, right? For crypto that everyone would, would basically support, rather than a new meme coin. It's like, hey, we're going on the offensive. Look, we just took back X billions of dollar from.

• 35:40David Hoffman?

  It's very generous of you to credit Trump for that.

• 35:42Ryan Sean Adams?

  It's a possibility here. There's some other things that were happening, including, I don't know if you saw this, David. So part of the funds were Polygon funds, ended up on the Polygon chain and Polygon proposed a hard fork to recover it. So validators have already frozen about 6.5 million in Pol. Some of this was from the Binance hack. Actually, some of this was another hack we didn't even have time to cover, which is the Polymarket hack that happened on Friday, too.

• 36:10David Hoffman?

  All right.

• 36:11Ryan Sean Adams?

  All right. So the, the Pol is frozen on Polygon right now. And now they are proposing an improvement proposal, which would actually roll back the chain. So this would be the biggest rollback since the Dow.

• 36:25David Hoffman?

  The V rollback, yeah.

• 36:27Ryan Sean Adams?

  This would actually like roll back the chain and actually delete the Pol from the hacker's accounts. And this was crazy, too. Here's, here's a kicker. The hackers actually bribed validators to unfreeze the Pol, okay? And they did this by way of broadcasting a transaction with an incredibly generous Polygon fee, a 20K fee in order to move it.

• 36:54David Hoffman?

  Oh, interesting. They're just saying like, hey, and plus, it only takes one validator to, to process that transaction, take that bribe, defect from everyone and then release the funds. And so that was probably North Korea's only option left is like, hey, let's bribe, let's bribe them with like one-third the value of the funds.

• 37:13Ryan Sean Adams?

  Isn't that fascinating?

• 37:14David Hoffman?

  To process the transaction. And no one, no one did it? No Polygon validator defected?

• 37:19Ryan Sean Adams?

  Not so far. You probably don't want to be put on the list.

• 37:21David Hoffman?

  I mean, I don't want to go to jail, so.

• 37:23Ryan Sean Adams?

  Well, they've also directly contacted validators and said they'd offer them side cash as well. So it doesn't even have to be kind of an on-chain publication of this type of thing.

• 37:31David Hoffman?

  Oh, interesting. They should say yes, but then go talk to the FBI on the side.

• 37:36Ryan Sean Adams?

  Well, it's just fascinating. Now we're getting to the level of validators having to make decisions. And I think there's a clear split between chains that are completely immutable, that will never, cannot roll back. So this is sort of, you know, the Bitcoins, Ethereum's, the Z-caches of the world. And then everyone else who's like doing the Arbitrum thing or doing the Polygon thing, where they're going to freeze, they're going to roll back. And at some level, that's also a feature of the chain. Like, if you're a user, maybe you kind of like want that to happen. So.

• 38:07David Hoffman?

  I mean Arbitrum has been two for two on the last two big hacks, Bybit and then Binance on not losing customer money. Not their customers. Well, it was their customer because it was Binance as their customer, but like Arbitrum saved two for two times.

• 38:23Ryan Sean Adams?

  Yeah, exactly. Do you want me to tell you that story of how an actual bank got robbed?

• 38:29David Hoffman?

  Let me just set up the premise of crypto has always felt very insecure because of the acceleration of AI exploiting technologies. So especially for bearer assets, because once they are stolen, they are stolen because it's set on a blockchain.

• 38:44Ryan Sean Adams?

  It's gone.

• 38:45David Hoffman?

  Banks don't have that problem because if you send a bank transfer, you can just call your bank and say, hey, undo that. And there is no transaction finality in the bank context. You can undo a transaction that's like 60 days old, a year old. You can go really far back with a court order. And so there has never been the notion of bank heists in the trad bank world because they can just ledger entry update and undo the heist. And so you're telling me that that narrative was violated by a trad bank getting heisted. How did that happen?

• 39:20Ryan Sean Adams?

  Yeah. And this is a crazy story. And by the way, that's the reason I've always been skeptical of these takes of like, oh, you know, traditional banks are going to be hacked. It's just like, well, not in the way of crypto. They're not bearer instruments. Everything is AMO KYC. You know, like it moves at the speed of people approving paperwork. Like, how could a hack happen? Well, we saw exactly how a hack could happen. So there is a bank called Credit Mutual. I'm mispronouncing this because this is a French bank. They were robbed, estimated. It's not fully reported, about $130 million. This was a fiat stolen from a bank. So this is actually a pretty large French bank.

• 39:59David Hoffman?

  A physical, like people with guns in the bank lobby?

• 40:02Ryan Sean Adams?

  Nope, digitally hackers. So similar in some ways to the Binance attack and also very differently. This is a big bank, I should say. So about $200 billion balance sheet. So five and a half million customers. It's a co-op and they have over 10,000 employees. It's a co-op. So it's not publicly traded. This is a major French bank. Okay. Here's how it happened. And a entry was made by some hacker through a third-party vendor system. So this is not internal human error. It's probably some sort of API, some sophisticated external attack. Okay. Once they were in, then the hacker, because fiat is not a bearer asset, essentially,

• 40:45Ryan Sean Adams?

  if you want to move fiat from a bank system, you have to do so through a SWIFT. You have to do so through a messaging protocol. You're not actually physically moving the assets. You're just sort of, you know, launching these communication messages through something like the SWIFT protocol. So the hacker did that and sent this out to a bunch of mule accounts. So these mule accounts were other bank accounts that received these funds in small amounts. So it sort of shorted it out.

• 41:11David Hoffman?

  What's a mule account? You mean like a horse and mule?

• 41:14Ryan Sean Adams?

  Fake account at some other bank, like almost like a drug mule type of musician here. So it had all of these organized mule account networks across all of these banks. So the $130 million was stolen from this bank, was pushed out, just like with regular fiat transfers to all of these other banks, went below the radar somehow. And then these smaller banks then pushed out the funds to crypto exchanges. Okay. So Kraken, crypto.com, OKX, mule accounts in these crypto exchanges that then moved the fiat from fiat into stable coins. Once in stable coins, ended up on chain, ended up in true bearer assets and then sort of disappeared. Okay.

• 42:00David Hoffman?

  Huh. Okay. The only way that this works is that this slipped under the radar because they would need time for all of these bank transfers to settle before they can send another bank transfer to Coinbase Kraken. And then once the money is credited in Coinbase Kraken, then they are free to buy bearer assets.

• 42:20Ryan Sean Adams?

  It just looks.

• 42:20David Hoffman?

  Do we know how much time that was?

• 42:23Ryan Sean Adams?

  Not sure. It looked very innocuous from the bank's perspective, of course. It was just like, oh yeah, regular bank transfers being made and then it's going to other banks and then kind of they lose track of it. But here's the craziest thing is Zach XBT was actually the first person to notice this. So he saw it on chain. He saw it on chain, November 2nd, before maybe even the bank noticed that this was happening. And he flagged $106 million, who knows, through his methods, right? He saw this was sort of an aberration. This looked suspicious. And then he tweeted out that this, it looks like there's some sort of, you know, bank hack that has happened, didn't know the details. And now the banks have since confirmed this.

• 43:03David Hoffman?

  Did Zach, was Zach able to see to identify as a trad bank hike? I'm assuming it's because the money ended up in known thieves wallets?

• 43:15Ryan Sean Adams?

  Probably, right?

• 43:16David Hoffman?

  But like how he sourced it from like a trad bank hike is interesting.

• 43:20Ryan Sean Adams?

  I mean, Zach XBT is just like very sophisticated when it comes to kind of like on-chain analytics. And so he just saw this suspicious behavior. So anyway, if this can happen.

• 43:30David Hoffman?

  Zach XBT has got to be the CIA.

• 43:34David Hoffman?

  I've asked him like, I think like twice over the years, like, hey, like, you want to do like a written interview on Bankless? Like, no, not even any voice modification because he said no to that. He's like, no, no, I don't. Because he's the CIA.

• 43:47Ryan Sean Adams?

  Maybe. I don't know. I mean, so, so anyway, that's how a bank gets hacked. And I'm sure there's so many open doors through third-party tools for hackers to get inside of a bank network and fire off these innocuous looking fiat-type transactions to correspondent mule-type banks to then move it into crypto and then exit. That's how a hack can happen. This was 130 million, but can you imagine a major US institution getting hacked for billions of dollars and it ending up in crypto on the other side of this?

• 44:19David Hoffman?

  Right. Yeah. This reminds, so there was a clip I saw from CZ after Binance got hacked. And he talked about how crypto banks have to deal with this, but also trad banks are also totally under duress from exactly this type of event. And when I saw that clip, I was like, what are you talking about CZ? Like, for example, the reason we started, it's just like, you can't hack a bank. So I think my big question is like, was this kind of a one-off? Or is this a very repeatable strategy of you can get behind decently insecure banking security apparatus with AI? And then just with the right sophistication, you can move money around under their radar

• 45:03David Hoffman?

  because they have so many customers moving so many trillions of dollars a day, that you can actually squeeze out a couple million dollars here and there, or 134, or 106 in this case, because there's so much money over there that it just flies under the radar.

• 45:19Ryan Sean Adams?

  It remains to be seen, but there's got to be so many holes into their internal networks.

• 45:23David Hoffman?

  So many holes.

• 45:24Ryan Sean Adams?

  Right? It's like these social engineering attacks that are so sophisticated in crypto, yet crypto has hardened itself because it has a bearer instrument. Imagine how many holes exist in every single major bank around the world.

• 45:38David Hoffman?

  Okay, that's actually a crypto bull case.

• 45:42David Hoffman?

  I mean, crypto isn't immune from this either, but our defensive practices are already like a generation ahead of the banks. And so if the banks have to do cybersecurity, because they've always been in the beneficial position of just like, if somebody hacks us, we will just undo it.

• 45:55Ryan Sean Adams?

  Yeah.

• 45:56David Hoffman?

  But that's no longer the case anymore, apparently, according to this one single story.

• 46:00Ryan Sean Adams?

  Well, it's crazy. Like, banks aren't used to just losing money. I mean, this is like the 1800s, right? It's like when banks used to get actually robbed by bandits, Billy the Kid and that sort of thing. We're moving back to that era. And so this bank doesn't, isn't publicly traded, so we can't see the effect in the stock market, but they have to go eat $133 million loss and also realize this could be, could have been much bigger. So the whole banking industry is going to have to react to this and respond in some way. We got more coming up. We got to talk about Ethereum's DevCon. There's two things that I feel kind of bullish about coming out of that. And maybe one thing I'm not so bullish about. Also, David, you have some takes on the Coinbase earnings report that just happened earlier

• 46:43Ryan Sean Adams?

  this week. So we'll get to all that and more. But before we do, we want to thank the sponsors that made this possible.

• 46:47David Hoffman?

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• 47:31David Hoffman?

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• 47:46Ryan Sean Adams?

  Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato, he runs the DeFi Report. This is the guy that sent me a sell alert before the 10-10 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year, we started recording weekly podcast episodes. Each one, we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most, so let's do it together. Go subscribe to this podcast, search The DeFi Report, wherever you get your podcasts, YouTube, Apple,

• 48:30Ryan Sean Adams?

  Spotify, or find a link in the show notes. There's a new episode waiting for you now. DevCon 8 was in Mumbai, India, part of this week. One of the things I was most bullish on was Justin Drake's plan. He announced to make Ethereum PQ, that is post-quantum, I should say, by December 2028. So moving these timelines up. He stated the problem, which was all quantum attacks, and then also AI breakthroughs in math. And so the solution is Ethereum has to become post-quantum sooner than we all thought. This is a clip from DevCon from his presentation.

• 49:06Speaker 02

  And so with all of this, we today are announcing a material update to the straw map. We're pushing timelines forward very significantly to the J-Star fork.

• 49:21Speaker 02

  More specifically, we would like to have all three layers of Ethereum L1, the EL with post-quantum transactions, the CL with post-quantum attestations, and the DL with post-quantum sampling, all wrapped up by J-Star. And just a couple of months ago, this was in L-Star, you know, a year and a half after this.

• 49:47Speaker 02

  And behind all of these pieces of infrastructure, we have a very powerful tool, a very powerful engine called Lean VM. And Lean VM, over the last few days and hours, has reached a very significant milestone of end-to-end formal verification.

• 50:06Speaker 02

  Now, the other thing that we would like to do is set a timeline with Mission 2028. We are hoping that in January 2027, we will be launching Glampstam on mainnet. And our hope is that by December 2028, we'll be able to wrap up the full post-quantum and post-AI transition, which gives us 24 months to ship the three forks after Glampstam.

• 50:37Ryan Sean Adams?

  So I think the question is, can Ethereum ship post-quantum in 24 months? Justin Drake is bullish that they can. Some of the AI tools, some of the formal verification kind of breakthroughs make him more bullish that that's possible. But the big message is quantum dates are coming sooner, so the roadmap has to adjust, and Ethereum has a plan. That was probably the most bullish thing I saw personally coming out of DevCon. But again, I'm not there, you know, so I'm watching all of this from afar. The other thing that was pretty cool was the Ethereum Economic Zones from kind of the Gnosis team. I know you've interviewed them in the past, David, but

• 51:16David Hoffman?

  Yeah.

• 51:17Ryan Sean Adams?

  this is the idea of L2s tapping into the liquidity of L1s. The path was for Gnosis Chain to become an Ethereum Economic Zone sort of rollup. And there's some pretty impressive demos. They showed three demos here of progress in the Ethereum Economic Zone types of rollups, including just like CowSwap, tap into the liquidity of mainnet, pretty sleek. Gnosis is going to become the first of these chains, these rollups, I should say, in the first, by spring, I guess, of next year. So it was good to see some updates there. And I think there will be a case for some L2s to become Ethereum Economic Zone L2s who just tap into the liquidity.

• 51:59Ryan Sean Adams?

  Those with their own distribution, like Robinhood, Coinbase, for example, maybe not so much.

• 52:05David Hoffman?

  Probably not, probably not.

• 52:06Ryan Sean Adams?

  No, they're making so much on MEV, right? But there is another cadre of L2s that I think will become much more like, you know, there's always been this idea of the United Chains of Ethereum, where it kind of, you know.

• 52:19David Hoffman?

  Right. This has been what feels like what Ethereum's main arc could have been, should have been, maybe now is, and is now coming into fruition, especially with parts of Justin Drake's roadmap that he updated, like he updated the straw map. And parts of that are components to bolster the capacity, capability of the Ethereum Economic Zone.

• 52:40Ryan Sean Adams?

  Exactly. So I think these are actually true aligned L2s and aligned behind the value proposition of Ethereum and Ether the asset. And I think almost another sign of the times is L2B is becoming ETHB. Did you see this?

• 52:55David Hoffman?

  Yeah, yeah. And the reason why is because Layer 2s are not, no longer the intermediaries between people's relationship with Ethereum. And so like, historically, the whole thing has been like, all users are going to use Ethereum via Layer 2s, intermediated by Layer 2s. And so, you know, checking the power of Layer 2s becomes very, very important. And so Layer 2B was like a watchdog to show that like, okay, here is the power that a Layer 2 has over its users as it relates to connection to Ethereum. Well, since we are trying to do things like the Ethereum Economic Zone, but then also there's other Layer 1 things as well, they have rebranded Layer 2B to ETHB to be a little bit more expansive

• 53:39David Hoffman?

  of their mandate of protecting user sovereignty, but then also focus a little bit more on just the Layer 1 and all of the intermediated relationships that people have with the Ethereum Layer 1, such as like node providers or just smart contracts in general.

• 53:54Ryan Sean Adams?

  Both of these things make me, like, all of these things, I think, make me a bit more bullish on the direction Ethereum is taking. It's kind of the right focus. That said, I heard a lot of conversation about DevCon that it was like not attended as well, that there was kind of like the energy was a bit lower than previous years. In particular, I think there was some murmurings on crypto Twitter anyway of criticism of Vitalik's keynote. So he gave like a 15-minute keynote. I watched this. Only mentioned Ethereum once, didn't mention DeFi. This is Georgios with his comments on it. "It's kind of painful to see DevCon keynote after 10 years building Ethereum's OSS stack. Is this what's left? Where's the accountability?

• 54:37Ryan Sean Adams?

  How are you going to inspire the next wave of strong devs, not the B players and the Ren Seekers in the age of AGI? Come on." He was talking, I think, specifically about Vitalik's keynote. And I gotta say, I came away from watching the keynote and I was just, you know, it didn't seem that relevant to the topics of like facing Ethereum. It almost seemed like he was talking about like kind of a different project or a different thing altogether. I don't necessarily think that's bearish Ethereum, but it does seem to mean that like, it did signify that Vitalik was kind of on a different wavelength, I think. But, you know, that was a little different than what holders, investors, like Ethereum devs actually, actually wanted from him.

• 55:22Ryan Sean Adams?

  Like, it wasn't really about Ethereum, the project. You know, there's mention of Farcaster, there's mention of Lens, decentralized AI. And those things aren't core use cases of Ethereum these days.

• 55:35David Hoffman?

  Yeah, yeah. My kind of take on the keynote is just like it's Vitalik to be continually nerd-sniped by DIAK, so Defensive Acceleration, which Ethereum has a role to play in and perhaps a significant role to play in, but it is not really the main course. And so like Vitalik has just, really ever since Zuzalu in like 2023, Vitalik has just really been focused on just other frontier technologies that are of the same vibe as Ethereum, so like protecting user rights and, you know, individualism. And especially with the rise of AI, you know, AI gives a lot of power to the incumbents and to totalitarian dictators. And so Vitalik is interested in technologies that helps individuals resist that.

• 56:19David Hoffman?

  Even in the keynote, he also talked about how like health devices need to become more trustworthy. He talked about how social media needs to give users more control. He talked about how private communication platforms, things like Signal, need to be more than just encrypted messages and give user control over data management and end-user verifiability. These are kind of things he talked about. I did like the closing principle that he said where just collecting data is bad and apps and platforms and companies should use, treat personal data as toxic waste and just like not collect it. And these are all, this is all great, this is all noble. But if you're looking to Vitalik as like a startup leader

• 57:01David Hoffman?

  over the inspirational direction of Ethereum, the project of the EF DevCon, the event, I think you were disappointed in just the off-focus-ness of the subject matter.

• 57:12Ryan Sean Adams?

  That was Georgios's take anyway. And there was some pushback to that take, you know, some people saying, you know, you went Georgios and you're working for Tempo now on a corporate slop chain. There's a lot of mud throwing back and forth there. I will say though, at the end of the day, Paradigm, Georgios, they are shipping, at least for the EVM. This is part of the, I think, hidden bullishness of Ethereum is there's so many talented devs now working on the EVM stack. So Georgios and Paradigm shipped Solar, which is 100x faster solidity. So criticizing Ethereum, but yet working in the EVM.

• 57:48David Hoffman?

  He's contributing to Ethereum as much as anyone.

• 57:51Ryan Sean Adams?

  Yeah. I guess I see all sides of this and I understand the take. I'm not as bearish as Georgios on one specific Vitalik keynote. I just, but I do think it's indicative of him taking a different leadership role in the Ethereum ecosystem than he has previously. And other things I was much more bullish on coming out of DevCon, other talks, not his.

• 58:12David Hoffman?

  Yeah, it's kind of downstream of the same critiques of Ethereum that we've seen in the past, which is like, it just doesn't have focus. Like, what is Ethereum for? Like, if you can go to Vitaly and be like, okay, Ethereum is for protecting users from AI. It's from like, secure healthcare data. It's for this. I'm like, okay.

• 58:29Ryan Sean Adams?

  I'm pretty sure, David, it's for ETH asset.

• 58:32David Hoffman?

  Yeah, I'm pretty sure it's for ETH, the goddamn asset, which was not mentioned at all in the DevCon keynote.

• 58:36Ryan Sean Adams?

  This is something I've been hearing a lot of from the Zcash roadmap. They're very clear on what the application of asset is.

• 58:42David Hoffman?

  Yeah, Zcash is for Zcash.

• 58:44Ryan Sean Adams?

  Yeah, Zcash the asset. I think Ethereum could get back to that a bit more, but we've talked about that so many times here. Tell me about Coinbase, the earnings report, stock is down. What's going on over in Coinbase land?

• 58:56David Hoffman?

  Yeah, so there are some just like normal earnings things that we will get through. So, trading revenue, Coinbase made $590 million, which is flat quarter over quarter. They made more money from their prediction markets, which offset the 10% drop in spot volume. More money than previous quarters, not more money than trading revenue. Consumer spot volume on Coinbase is down 60% year over year. They now make more money on subscriptions and services, which is always kind of the plan. So, they make 49% of net revenue from subscriptions and services. They made $307 million in stablecoin revenue. Oh, that's great. These are all kind of normal quarterly earnings report stuff. The unique thing was

• 59:39David Hoffman?

  that they filed a new 10B5-1. I don't know what that is, but apparently it's just the plans that insiders who have a lot of coin shares need to file with the SEC if they want to sell shares. And so, this relates to CEO Brian Armstrong, Fred Arissim, and Emily Choi. Emily Choi is the president. Really, the interesting thing, I think, is about Brian Armstrong, who in this plan, made a plan to sell 24% of his shares at specific price targets. So, this is not Brian--

• 1:00:13Ryan Sean Adams?

  You should also say, have the option to sell. Doesn't have to actually hit the sell button.

• 1:00:17David Hoffman?

  At specific price targets. And so, this is not a market dump Brian Armstrong has filed, giving himself the option to sell 24% of his shares at specific price targets. And so, that is 3% of the total supply of Coinbase. Fred and Emily, they both are kind of doing the same plan. So, Fred can sell 70% of his shares, which is 1.5% of the total supply, and then Emily Choi--

• 1:00:41Ryan Sean Adams?

  But Fred's out. He's no longer kind of like, executively, like, leading the thing. I think the big news is really Brian Armstrong. So, apparently, he had 8.5%, or he owns 8.5% of coin today. And if you comp this, like Vlad Teneth, who's also founder-led CEO, which in general, I think you're bullish on companies that are led by founder CEOs, so am I, he has about 5.2% of Robinhood. But this is still a large amount that Brian is potentially going to be selling, right? It's 25% of his stack.

• 1:01:15David Hoffman?

  Yeah. So Vlad, and this is just normal, Vlad also has a plan just like this one to sell hood shares at specific price tiers. Probably, this is probably similar across many, many, most companies. Just the difference is in the amount of shares and the direction of travel. So Vlad's plan allows him to sell 4% of his shares. Brian Armstrong's plan allows him to sell 24% of his shares. And while Brian, to your point, he owns 8.5% of Coinbase, where Vlad only owns 5.25% of Robinhood, it's still the direction of travel that I think is like, if you were a coin investor, which I'm not currently, I would

• 1:01:56David Hoffman?

  be, it's kind of just a downer to see the stock down 60%. It's at 970-day low. And then, in the new quarterly earnings report, like, the CEO has filed to meaningfully raise the amount of shares he is potentially going to sell.

• 1:02:14Ryan Sean Adams?

  I think, I mean, there could be the argument, this is all part of normal diversification, but I would agree with you. As an investor, what you want to see is like, well, coin stock is down 70% from all-time highs? You'd rather see Brian be like, I am buying coin.

• 1:02:28David Hoffman?

  I'm buying. Fuck you guys. Fuck you, I believe in my company, I'm buying. Not the opposite.

• 1:02:33Ryan Sean Adams?

  Yeah. So, we'll see what is in store for Coinbase in the years to come. It's definitely underperformed the rest of crypto, at least on the year, and certainly recently.

• 1:02:44David Hoffman?

  Last thing to note before we go, Stretch has hit $100, which means that Michael Saylor can just hammer the ATM if he wants. I actually don't think that's true, since we are all dumping this morning, but at least for a moment yesterday, STRC from Strategy hit $100. It was off the peg for 174 days.

• 1:03:08Ryan Sean Adams?

  It's a long time.

• 1:03:09David Hoffman?

  It has now finally returned. I think it's at like $98, $99 now. But I think it is pretty notable that my strategy did get Stretch above $100. We don't have these in the notes, because we don't have enough time to talk about them today, but like, there is actually a lot of incoming debt that is coming due and since MSTR price is not above the thresholds that it would need to be, that is going to be cash that Saylor needs to come up with to pay these convertible notes. So, that is looming ahead once again for Strategy over the next like, six to nine months, I think. But hey, at least Stretch is at $100. Bankless Nation, that was it for this week. Hopefully, we have some green candles next

• 1:03:51David Hoffman?

  week to talk about. For some reason, I feel like it's either going to be big up or big down one way or another, but we will see. We will see you in seven days. That has been the Weekly Roll-Up. Crypto is risky. You can lose what you put in, but this is a frontier. It's not for everyone. And we're glad you're with us on the Bankless journey. Thanks a lot.