This week’s news recap highlights Binance’s explanation of a $6.34 billion theft, discussions among Democrats about alternative U.S. cryptocurrency regulations, and a return to outflows for Bitcoin funds. The news from November 1 to 7 also included updates on retirement investment rules, a proposed tZERO listing, and blockchain enhancements.
Summary
- Binance traced its security breach back to compromised employee devices and confirmed that it would cover customer losses.
- Democrats are looking at enhancing SEC oversight while aiming to revive protections for investors within a new crypto market structure initiative.
- During the November 5 session, spot Bitcoin ETFs in the U.S. experienced net withdrawals totaling $430.2 million.
- A new Labor Department rule regulating alternative retirement investments has reached the White House for final assessment.
- tZERO has proposed a merger via SPAC, boasting a pre-money equity valuation of $350 million.
Binance reveals details of the $6.34 billion breach
- In a report on November 3, Binance identified the breach as stemming from fraudulent hiring interviews, compromised developer software, and an internal AI system. The attackers accessed wallet signing processes using stolen deployment credentials during the theft on October 29.
- On November 1, Bitcoin withdrawals resumed as Binance began to reactivate its services. The exchange noted it had restored 98% of affected token assets and was in the process of acquiring the remaining less liquid cryptocurrencies. CEO Richard Teng stated that customers would incur no losses, as about $2.85 billion was either frozen or intercepted.
Democrats reassess SEC oversight
- House Democrats commenced discussions on legislation aimed at enhancing SEC oversight, potentially diminishing the CFTC’s authority, as reported by Eleanor Terrett. These talks came after the midterm elections and focused on plans for the upcoming Congress.
- This approach includes elements from previous proposals by Representative Maxine Waters, which cover bankruptcy-remote custody, withdrawal protection mechanisms, and monthly reserve disclosures. Restrictions on the cryptocurrency interests of federal officials were also tabled, remaining as concepts rather than adopted regulations.
Withdrawals from Bitcoin ETFs return
- On November 5, U.S. spot Bitcoin ETFs recorded a loss of $430.2 million, reversing the $74.6 million in inflows seen the day prior, according to Farside Investors. Collectively, the first four sessions of November resulted in total net outflows of $869.8 million.
- Fidelity’s FBTC shifted from a $236.7 million inflow to a $199.9 million outflow during this timeframe. BlackRock’s IBIT saw outflows on both days, with a decrease from $201.2 million to $105 million.
Crypto retirement regulation heads to the White House
- The Labor Department’s finalized rule on selecting retirement investments has moved to the White House for review, received by OIRA on November 5, and covers alternative assets, including digital assets.
- The review process is still ongoing. The submission does not imply that cryptocurrencies will automatically be included in 401(k) plans or that employers will be required to offer them.
Challenge against stock perpetual futures in court
- A federal judge has denied a request to halt U.S. stock perpetual futures after the CFTC approved them. The ongoing lawsuit involves contracts at KalshiEX, Bitnomial Exchange, and Coinbase Derivatives.
- Judge Valerie Caproni raised questions about the agency’s jurisdiction but did not find sufficient proof of imminent harm. Her preliminary ruling did not resolve the case definitively.
Proposal to drop the $250 transfer rule withdrawn
- FinCEN and the Federal Reserve have retracted their initiative to lower the threshold for recordkeeping and information sharing on cross-border transfers from $3,000 to $250.
- This withdrawal will take effect on November 9, and existing regulations will remain unchanged. The agencies hinted at the possibility of future rulemaking.
Strategy and Strive enhance Bitcoin holdings
- Strategy and Strive reported acquiring Bitcoin worth about $75.5 million on November 2, with Strategy purchasing 811 BTC for $65.5 million and Strive adding 124 BTC for approximately $10 million.
- These acquisitions brought their total reported holdings to 849,327 BTC and 43,124 BTC, respectively.
Circle announces $864.9 million in quarterly revenue
- Circle reported a 17% increase in revenue, reaching $864.9 million, with reserve income climbing as well. Adjusted EBITDA saw a notable rise of 85% to $317 million.
- This included $182 million from an ARC token presale. Reserve income faced an 8% drop, while on-chain transaction volume for USDC surged by 49%, totaling $13.9 trillion.
tZERO proposes $350 million SPAC merger
- tZERO has revealed plans to merge with FG Imperii Acquisition Corp., aiming to list on NYSE American under the ticker TZRO, expected to close in early 2027.
- The proposed valuation of $350 million includes performance-linked compensation, with potential trust proceeds of $231 million subject to shareholder redemptions and transaction costs.
France eliminates crypto budget amendments
- France’s National Assembly overwhelmingly voted to discard the revenue section of its proposed 2027 budget, with a vote count of 458 to zero.
- This rejection has removed tax provisions related to crypto-to-stablecoin conversions and a €100,000 self-custody reporting requirement from the bill going to the Senate. Lawmakers may revisit these topics in future budget discussions.
Zcash activates quicker block intervals
- Zcash successfully launched its NU7 upgrade on November 6 at block 3,543,405, decreasing its target block interval from 75 seconds to just 25 seconds.
- The upgrade also set new limits on shielded transactions and allocated 60% of transaction fees for future miner incentives.