Category: Business

TAC, an EVM network connected to TON, halted validator block production after the project said an exploited vulnerability affected the Cosmos-based EVM side of its network and, according to TAC, only the TAC token supply.

In an Aug. 22 notice, the team said it was working with validators on a temporary halt that would take effect within minutes. TAC’s official Telegram announcement channel subsequently described the halt as implemented and promised further findings and steps toward resuming the chain.

A check of the TAC explorer API at about 1:03 p.m. UTC on Aug. 23 returned block 24,671,475, timestamped 11:58:11 p.m. UTC on Aug. 22, as the latest block. A fresh check of the TAC explorer at about 7:58 a.m. UTC on Aug. 24 still showed block 24,671,475.

TAC’s notices did not identify an unauthorized TAC amount, a dollar loss, the exploit transaction or block height, the vulnerable component, affected wallets, user losses or a restart timetable. The team also did not explain why the problem could not be isolated below the full-chain level.

The halt raises a state-reconciliation question that TAC has not yet answered. The project has not said whether native, wrapped, bridged, staked, exchange-held or protocol-controlled TAC balances must be checked before validators agree on a canonical state, and the available evidence does not establish that every one of those categories was affected.

The scope differs from TAC’s separate May 11 bridge breach. In its May 20 post-mortem, TAC said its sequencer software failed to verify both the code hash of a TON jetton, or token, wallet and the expected minter behind it. Counterfeit deposit messages were accepted, unbacked equivalents were issued on TAC, and genuine assets locked on TON were released through the normal return path.

TAC put the May incident’s total protocol loss at approximately $2,854,486.22 as of May 12 at 10 p.m. UTC. During that response, it halted the sequencer set connecting TAC to TON while saying the TAC EVM layer remained fully operational.

The latest validator-coordinated chain halt is therefore a broader operational response, but it does not establish a new loss figure or show that the two incidents share a root cause. Until TAC publishes technical details of the Aug. 22 supply incident and a reconciled supply figure, the defensible conclusion is limited: block production was stopped, TAC says the issue concerns only its token supply, and the conditions for resuming remain undisclosed.

Nasdaq-listed Digital Currency X Technology Inc. is asking shareholders to approve a 160-for-1 reverse stock split, also known as a share consolidation, on September 3. It would be the company’s second consolidation of 2026 after a 12-for-1 action took effect on January 22.

Digital Currency X recently shifted from electric-vehicle manufacturing into the digital asset sector. In its latest annual report, the company said its treasury held 157.45 million EDGEAI tokens. It valued them at about $402 million as of December 31, 2025. It later locked all of those tokens in a 12-month staking agreement. The agreement carried a floating annualized yield of 3.5% to 8%.

For a holder whose balance is divisible by 160, every 160 Class A or Class B shares would become one share. A holder of 16,000 shares, for example, would receive 100. The filing says the company would round fractional results up to the nearest whole share, so smaller or nondivisible positions would not follow that arithmetic exactly. The consolidation would cover both issued and unissued shares. It would take effect on a date confirmed by Nasdaq or one on which the exchange raises no objection.

A reverse stock split, then an authorization reset

The first resolution would reduce authorized shares from 3 billion, each with a par value of $0.0001, to 18.75 million, each with a $0.016 par value. A second resolution would immediately increase the authorization back to 3 billion shares at the higher par value. A third would reorganize the authorized share capital back to $0.0001 per share. Shareholders had approved the 3 billion-share authorization on May 13, according to a May filing.

Authorized shares are capacity, rather than stock already issued. The resolutions would not themselves issue shares or prove immediate dilution, but they would leave the company able to issue far more shares after the consolidation than the 18.75 million-share ceiling created by the first step alone.

Share base and voting timeline

The disclosed issued-share figures come from two earlier dates and establish only a floor. Digital Currency X’s annual report listed 19,823,627 Class A shares and 1,334 Class B shares outstanding as of April 20. A July 7 filing then said the company issued 331,753,557 units, each including one Class A share and warrants, at a July 3 private-placement closing. Together, those disclosures establish at least 351,577,184 Class A shares plus 1,334 Class B shares before any later warrant exercise or other issuance.

Class A shares carry one vote each on general-meeting matters, while Class B shares carry 20. On the April counts, the Class B class represented 26,680 votes against more than 19.8 million Class A votes. The July issuance added Class A shares, but the materials do not establish current holder-by-holder control for the September vote.

The company said it intended January’s consolidation to help regain Nasdaq minimum bid-price compliance. By contrast, the August meeting notice does not identify a compliance, financing, or offering rationale for the proposed 160-for-1 reverse stock split and capital reorganization. Intervening issuance also changed the share base, so the two ratios do not describe one continuous holder-level reduction.

The Zoom-only meeting is scheduled for 10:00 a.m. Hong Kong time on September 3. Internet and phone voting closes at 11:59 p.m. Eastern time on September 2, while proxy forms have a separate deadline no later than 48 hours before the meeting.

UK Court Winds Up Key Coin Assets

The U.K. government announced on Aug. 18 that a London court had wound up Key Coin Assets Ltd. a week earlier. An investigation by the Insolvency Service, the U.K. government agency that investigates corporate misconduct and insolvency, found no evidence that the company carried out any of the crypto trading it advertised.

Nine people who took their complaints to Action Fraud, the U.K.’s national fraud and cybercrime reporting center, paid the company more than £300,000 between them.

Unauthorized investment schemes remain a live risk for U.K. savers, with Britain’s full crypto authorization regime still more than a year away. The company told investors it could guarantee returns ranging from 40% to 100%, while one online promotion claimed “0 Fees, 0 Risks.”

Insolvency Service Chief Investigator Mark George said:

“Key Coin Assets Ltd promised guaranteed returns but delivered nothing. Their behavior displayed all the hallmarks of a Ponzi-style scheme.”

Money from newer investors appeared to have gone toward paying off earlier ones rather than into any investment, the Insolvency Service noted.

Funds Moved Into Director’s Personal Account

Bank records examined by investigators showed customer funds were often transferred into the company director’s personal account within hours or on the same day they arrived. The money then became difficult to trace, while accounting records requested by the Insolvency Service were not provided during the investigation.

The company repeatedly changed its official address, at one point listing a flat whose occupants had never heard of the firm. Filings at Companies House claimed assets reaching £42 million, a figure investigators found far above the level suggested by the company’s actual banking activity.

Fake customer testimonials went up online without the permission of the people named in them. Moreover, investors were instructed to avoid terms such as “crypto” and “investment” in bank payment references.

Fraud against individuals and businesses cost the U.K. economy £14.4 billion in 2023-24 and ranks as the country’s largest crime type, according to the government’s 2026-2029 Fraud Strategy. The strategy commits more than £250 million between 2026 and 2029 to combating it.

FCA Had Previously Flagged the Firm

The Financial Conduct Authority (FCA) added Key Coin Assets to its list of unauthorized firms on Sept. 12, 2024, nearly two years before the court order. The FCA warning on Key Coin Assets states that the firm was not authorized and could be targeting U.K. consumers.

Anyone dealing with an unauthorized firm is not protected by the Financial Ombudsman Service, which handles complaints against financial firms, or the Financial Services Compensation Scheme, which can compensate customers if an authorized firm fails.

The regulator has also stepped up enforcement elsewhere in the sector, including raids on eight premises linked to suspected illegal peer-to-peer crypto trading. That April operation marked its first coordinated enforcement action of that type and resulted in cease-and-desist letters as authorities examined potential unlawful activity.

What Investors Should Check Before Paying

The Insolvency Service and the FCA urge anyone weighing a crypto investment to look up the firm on the FCA’s Firm Checker and its list of unauthorized firms. Guaranteed high returns, a request to leave normal payment references off a transfer, and pressure to recruit other investors are the warning signs both bodies name.

A common crypto scam warning sign is an unusually high return advertised alongside little or no apparent risk. Investigators found that exact combination in the material Key Coin Assets put in front of its customers.

Wider UK Crypto Rules Take Effect in 2027

Crypto firms carrying on regulated crypto asset activities in the U.K. will answer to the FCA the way banks and brokers already do, under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The regulations were finalized in February 2026, according to an HM Treasury policy note on the cryptoasset regulations.

The final framework covers businesses including exchanges, custodians, staking providers, and lenders, with an Oct. 25, 2027 effective date outlined in the U.K.’s final crypto rulebook. Firms can begin applying for authorization from Sept. 30, 2026, creating a transition period before the broader rules take effect.

Separately, U.K. lawmakers opened a July inquiry into crypto banking access, asking whether banks are cutting off legitimate crypto companies. The Crypto and Digital Assets All-Party Parliamentary Group wrote to major bank executives on Aug. 11 and is gathering evidence through Aug. 31.

The Official Receiver, a government official who handles the affairs of companies wound up by the court, has been appointed liquidator of Key Coin Assets following the High Court order.

A notable development has occurred in Bitcoin’s technical outlook. The cryptocurrency’s Relative Strength Index (RSI) rose to the 84-86 range, pushing Bitcoin into its strongest overbought zone since November 2024. This rise in the technical indicator has attracted investor attention following Bitcoin’s recent sharp gains.

Bitcoin recently broke above its trading range of $62,000 to $71,000. Following this breakout, the cryptocurrency surged by up to 12% in just one to two days, coming very close to the $80,000 level at one point. This sharp price movement also led to a significant liquidation of short positions in the market.

According to the data, over $3 billion in short positions were liquidated within 24 hours during Bitcoin’s surge. These forced position closures caused investors who had taken short positions to exit the market, and the resulting liquidations contributed to a further acceleration of the upward movement.

In the short term, the $77,000 level stands out as an important support point for Bitcoin. Analysts believe that the price remaining above this level is critical for maintaining the uptrend. Conversely, it is noted that a loss of the $77,000 support level could strengthen short-term selling pressure.

In Bitcoin, the RSI approaching its highest overbought region in two years indicates that strong momentum coexists with the risk of a potential correction.

*This is not investment advice.

PI Network [PI] has declined by a double-digit percentage, showing that the asset is on the downside and has lost 15%.

Market sentiment shows that while bears may be dominating, there hasn’t been sufficient data to suggest that a massive decline may be coming. If anything, it’s the other way around.

PI’s real test is below

The market structure data shows that PI has been trading within a bullish triangle pattern, and the recent drop is a decline toward the support line of the chart.

The support line is the diagonal trendline, and this level has prevented a market decline on three different occasions, pushing the asset higher.

This is the second attempt price has made to trade lower toward the support level, although there hasn’t been a breakdown below this level yet. If a breakdown occurs, then the price could find support at the horizontal support level of $0.085.

Ideally, the price could consolidate within the channel before a breakout to the upside, above the resistance, which could lead to a new high on the chart. If this happens, possible near-term targets for price would be $0.103 and $0.110, as marked on the chart.

Still, there’s a possibility that the price will continue to consolidate along this line before a breakout to the upside.

Capital flow isn’t favorable

Investors aren’t particularly bullish on price, and this could restrict capital flow into the market. At the time of this report, the Accumulation/Distribution indicator, as well as the Money Flow Index (MFI), has moved lower on the chart.

The A/D indicator has been on the downside and remains on the sidelines, while the MFI is in the bearish zone, below 50.

The Accumulation/Distribution indicator is a volume-weighted tracker used to determine whether there is buying or selling pressure, while the Money Flow Index tracks overall buying and selling in the market.

On the last two occasions when price traded into the support level on the chart, marked by the red line, the A/D indicator and MFI were both trending higher. This isn’t the case at present.

Notably, the MFI needs to rally above 50 before the market can be considered bullish. A cross above this zone would imply that investors are likely to continue rotating capital into the market. Likewise, the A/D would need to move further higher for the bulls to establish dominance.

Funding and market are still good

There has been clear bullish sentiment across exchange activity. The Funding Rate and Open Interest in the market have remained bullish.

The Funding Rate is at 0.0050 on the chart, implying that there are more long positions in the market and showing that traders are still buying the asset. At the same time, Open Interest has a reading of $2.3 million in the market.

The Funding Rate would play a key role in helping the asset maintain its bullish outlook, especially in the near term.

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Funding Rate

• PI is testing a key triangle support level after its 15% decline, with a breakdown potentially exposing the $0.085 support.
• Bulls need stronger capital inflows and a move above $0.103 to strengthen the case for a rally toward $0.11.

Dalio Backs Bitcoin as Debt Risks Intensify

Bridgewater Associates founder Ray Dalio said growing debt, weakening demand for government bonds, and monetary expansion could erode currencies while supporting scarce assets. In an Aug. 21 LinkedIn analysis, he stated:

“I expect non-government-produced monies like gold and bitcoin to do relatively well.”

Bitcoin’s potential role rests partly on its predetermined issuance and maximum supply of 21 million coins. Its store-of-value characteristics include scarcity, portability, self-custody, and resistance to monetary debasement, although substantial volatility prevents it from providing consistent short-term stability.

Dalio’s support remains measured rather than unconditional, reflecting his continued preference for gold as the more established monetary asset. In May, he argued that bitcoin’s correlation with technology stocks weakens its safe-haven appeal when investors sell volatile holdings to cover losses elsewhere.

US Debt Could Reach $60 Trillion

Federal finances already reflect several pressures highlighted in Dalio’s debt-cycle framework, including persistent deficits and rising interest costs. The Congressional Budget Office projected a $1.9 trillion fiscal 2026 deficit, with federal outlays of $7.4 trillion, revenue of $5.6 trillion, and debt held by the public reaching 120% of gross domestic product by 2036.

America’s debt accumulation has continued at a rapid pace, strengthening arguments that scarce assets could provide protection against long-term currency depreciation. Total public debt outstanding reached $40.05 trillion as of the close of business Aug. 18, passing $40 trillion for the first time, Treasury figures released Aug. 19 showed.

Debt growth had already been running fast ahead of that milestone, adding nearly $1 trillion within five months. Dalio said current projections imply another substantial increase over the coming decade as deficits require continued borrowing and interest expenses consume more federal revenue. The investor wrote:

“After taking the recently passed budget reconciliation bill into account, most of the independent assessors of the situation project that the debt in 10 years will be $55-60 trillion.”

A full debt crisis could arrive in three years, give or take two, if the country’s fiscal course does not change, Dalio guessed. He set out that timing alongside the debt projection in a summary of his book, “How Countries Go Broke: The Big Cycle.”

Treasury Buybacks Reinforce Debt-Cycle Concerns

The U.S. Department of the Treasury added another signal when it expanded long-term liquidity-support buybacks on Aug. 19. The department increased the maximum purchase size for certain 10- to 30-year securities from $2 billion to at least $4 billion per operation, effective Sept. 9 through Nov. 4.

The expansion revived discussion of the debasement trade, under which investors reduce exposure to currencies and bonds while favoring scarce assets. Bitcoin advanced as the Treasury buyback announcement drew attention to dollar weakness, although Treasury repurchases do not constitute Federal Reserve quantitative easing and do not create money by themselves.

Where Dalio Sees Bitcoin Falling Short of Gold

Dalio also recognizes risks that could limit bitcoin’s monetary role despite its fixed supply and borderless network. He has identified potential vulnerabilities in bitcoin’s code, government controls, transaction transparency, and the possibility that central banks may remain unwilling to treat it as a reserve asset.

His current position represents a shift from 2020, when he questioned bitcoin’s usefulness as money and warned that governments could restrict it if it became threatening to sovereign currencies. Dalio nevertheless acknowledged that he could be wrong about bitcoin and invited proponents to address his concerns.

The Bridgewater Associates founder ultimately favors broad diversification while reducing exposure to debt assets and allocating some capital to non-government money. He advised:

“As general advice, I suggest diversifying well in asset classes and countries that have strong income statements and balance sheets and are not having great internal political and external geopolitical conflicts, underweighting debt assets like bonds, and overweighting gold and a bit of bitcoin.”

“Having a small percentage—maybe 10-15%—of one’s money in gold can reduce a portfolio’s risk, and I think it would also raise its return,” he concluded.

Zondagrypto, which used to be the leading cryptocurrency platform in Eastern and Central Europe, has vanished after both its top managers have disappeared and hundreds of thousands of users are blocked from accessing their funds.

The incident serves as a reminder to the crypto industry, which is still struggling for recognition, about how swiftly people’s trust can disappear if they do not know what happens to their investments.

The damage is not limited to Poland and Estonia, where the exchange has its roots. Cryptocurrencies have gained political and institutional acceptance in part due to President Donald Trump, whose family-owned cryptocurrency venture reportedly made $1.4 billion, as noted by the New York Times (Times).

Nevertheless, Zondacrypto demonstrates that the old fraud problem in the business still matters. Its ZND token has lost 99.9% of its value, CoinMarketCap data shows, while the platform where it keeps customer deposits has been offline since April.

Two bosses gone in four years

The platform started as BitBay in 2014 in Katowice, which was founded by Sylwester Suszek, who was a miner’s son and was called a “crypto king” by the media in Poland. As per earlier reports by Cryptopolitan, Suszek vanished in March 2022 at the age of 34 after going to a fuel depot close to Katowice to meet his associate, Marian Wszolek.

His family believes he was kidnapped and killed. Polish prosecutors later charged Wszolek with organized-crime membership, large-scale VAT fraud, money laundering, and unlawful deprivation of liberty tied to Suszek’s disappearance. Wszolek later vanished as well, the Times reported.

The attorney representing Suszek, Przemyslaw Kral, has now taken control of affairs. The last communication from him was via social media on April 16, 2026, in which he told all clients to keep calm. It has been four months since then, although the Times alleged several sightings of him in places such as Israel, Botswana, and Dubai.

Robert Nogacki, a lawyer from Warsaw acting on behalf of those clients who are unable to access their property, stated that:

“It was a fraud from the first day.”

The wallet only a missing man could open

Kral assured anxious clients that Zondacrypto possessed 4,500 Bitcoins, which had a value of about $336 million at that time, with only Suszek in possession of the keys.

However, this was not true according to blockchain forensics company Recoveris. Their investigation indicated that Zondacrypto’s major Bitcoin hot wallet has shown a 99.7% drop in holdings from the recorded maximum monthly average of 55.7 $BTC in August 2024 to 0.18 $BTC in March 2026. As of April 1, Zondacrypto had 0.086 $BTC remaining, worth around $9,700.

According to Recoveris, similar European exchanges had an average of 308 $BTC in their primary hot wallets. Recoveris pointed out that the company had initiated the transfer of 511 transactions from Zondacrypto wallets to a deposit address at Kraken between mid-December 2025 and the beginning of April, worth approximately $21 million.

The exchange refused to disclose wallet addresses as proof of its cold reserves and cited the MiCA and DORA rules of the European Union. Both regulations do not prohibit the disclosure of the information.

Estonia pulls the license, Brussels’ clock runs out

On June 29, 2026, the license of BB Trade Estonia OÜ, the parent company of Zondacrypto, was cancelled by Estonia’s Financial Intelligence Unit (FIU). Earlier, on May 18, the FIU had already temporarily suspended some of the company’s licenses, preventing it from accepting new clients.

The agency added that its capacity is limited since its purpose is to supervise compliance of anti-money laundering laws, but not to check whether customers’ funds actually exist and are safely kept.

The collapse’s timing added to its drama. Article 143 of MiCA mandates that providers operating according to pre-existing national regimes can continue to operate only up to July 1, 2026, or till their application gets approved or denied by the European Securities and Markets Authority (ESMA). Zondacrypto’s Estonian license disappeared just two days before the deadline.

Prosecutors fold it into an organized-crime case

According to a statement issued on August 3, the Zondacrypto investigation by the Regional Prosecutor’s Office in Katowice has been integrated with the investigation by the National Prosecutor’s Office run by the organized crime and corruption department in Silesia region.

Prosecutors have a number of inquiries into the creation and functioning of BitBay and Zondacrypto, including the investigation related to the disappearance of Suszek.

Prime Minister Donald Tusk of Poland has accused Zondacrypto of being connected to Russian crime syndicates and intelligence agencies, pointing out the company’s financial connections to right-wing politicians and events in Poland.

Speaking at the Sejm on April 17 he stated that Zondacrypto’s rise to success had begun “with the money of the Russian mafia.”

For now, its customers are only concerned about two issues: the fate of their deposits and the future of the two missing executives.

ARK Invest’s founder says Wall Street analysts do not understand the stablecoin issuer’s business model.

Cathie Wood has kept buying Circle shares through a steep decline, according to reports from BeInCrypto and Yahoo Finance. The stock has dropped 42% from earlier levels this year. Wood, founder of ARK Invest, said Wall Street analysts covering Circle cannot fathom the company’s true worth.

Circle is the issuer of $USDC, one of the largest dollar-pegged stablecoins in circulation. The company went public earlier this year, drawing significant attention from both traditional finance and crypto-native investors. Its stock performance since listing has been volatile, reflecting broader uncertainty about how markets should value stablecoin issuers.

ARK Invest has built a reputation for taking concentrated, high-conviction positions in companies it believes are misunderstood by mainstream analysts. Wood has previously made similar bets on names in electric vehicles, genomics, and other disruptive technology sectors. Her continued accumulation of Circle shares during a sharp price decline fits that established pattern.

Stablecoins occupy a unique position in financial markets. They function as digital dollar substitutes, used heavily in crypto trading, cross-border payments, and increasingly in traditional settlement systems. Circle’s revenue model depends partly on interest earned from reserves backing $USDC, making the company sensitive to interest rate movements and regulatory treatment of stablecoin reserves.

Analyst skepticism toward Circle likely stems from several factors. These include competition from other stablecoin issuers, regulatory uncertainty around stablecoin legislation, and questions about how sustainable reserve-based revenue will be if interest rates decline. Wood’s public comments suggest she views these concerns as overstated or already priced into a lower valuation.

The timing of Wood’s remarks comes as stablecoin regulation remains a live policy topic in the United States and elsewhere. Legislative efforts to establish clearer rules for stablecoin issuers have progressed at various paces across jurisdictions. Any regulatory clarity, positive or negative, could materially affect how investors value Circle relative to peers.

Wood’s willingness to buy through a substantial drawdown signals confidence that current pricing does not reflect Circle’s long-term prospects. Whether that conviction proves correct will depend on factors including $USDC‘s market share, interest rate trends, and the pace of stablecoin regulatory frameworks taking shape.

Market Impact

ARK Invest’s continued buying could draw additional investor attention to Circle at a moment when its share price is under pressure. Institutional investors sometimes watch high-profile fund managers for signals about undervalued assets, though such buying does not guarantee a price recovery.

The episode also highlights a broader disconnect between how traditional equity analysts and crypto-focused investors value stablecoin issuers. Divergent views on Circle’s business model may persist until stablecoin regulation and interest rate trends become clearer, which could keep volatility elevated in the stock.

Cathie Wood’s continued purchases of Circle stock underscore her long-standing strategy of backing companies she believes the market has mispriced. The outcome will hinge on how stablecoin regulation and interest rate conditions evolve in the months ahead.

Frequently Asked Questions

What does Circle do?

Circle is a financial technology company that issues $USDC, a stablecoin pegged to the U.S. dollar and widely used in crypto trading and payments.

Why has Circle’s stock fallen 42%?

The reports do not specify a single cause, but stablecoin issuers face pressure from regulatory uncertainty, interest rate sensitivity, and competition from other stablecoin providers.

Why is Cathie Wood buying Circle shares during the decline?

Wood has said analysts do not understand Circle’s long-term value, reflecting ARK Invest’s typical strategy of accumulating positions in companies it views as misunderstood.

How could stablecoin regulation affect Circle’s stock?

Clearer rules on stablecoin reserves and issuance could reduce uncertainty, while unfavorable regulation could pressure the company’s revenue model further.

“AI competes with Bitcoin for speculative capital, electricity, and>Bitcoin miners have already felt that pressure. Some mining companies have begun converting portions of their infrastructure to support AI and high-performance computing (HPC) because those businesses can offer another source of revenue.

That development, however, does not necessarily threaten the Bitcoin network itself. It creates competition for bitcoin mining companies, which must decide whether using available electricity for mining or AI computing produces better returns.

Bitcoin was designed to adjust when mining participation changes. Roughly every 2,016 blocks, the network changes its mining difficulty to keep blocks arriving around once every ten minutes. If substantial computing power leaves Bitcoin, mining eventually becomes easier for the remaining participants.

$BTC supporters and Schiff critics quickly piled into the economist’s X thread. “AI is a threat to gold more than it is to Bitcoin, Peter,” one account fired back. Schiff, apparently unconvinced, responded, “How so?” The user then laid out the counterargument:

“You could ask AI yourself … But here you go … 1. AI finds huge new gold deposits. 2. Robots make mining far cheaper. 3. AI unlocks low-grade/deep-sea gold. 4. Better tech dramatically improves gold recycling. 5. Eventually, asteroid mining could flood supply. 6. More supply + less scarcity → gold prices fall.”

AI Security Warning Faces a Higher Bar

Schiff’s second argument goes further. He says increasingly powerful AI could discover vulnerabilities in Bitcoin’s code, cryptography, wallets or network that human researchers have overlooked. Software vulnerabilities are possible, and Bitcoin is not magically immune to programming mistakes. Wallet applications, exchanges, and Bitcoin implementations can contain bugs, which is why developers continually review and test software.

Finding a bug, however, is not the same as changing Bitcoin’s monetary rules. Bitcoin’s 21 million supply limit is enforced by independently operated worker nodes, computers that verify whether transactions and blocks follow the network’s rules. Software attempting to create bitcoin outside those rules would be rejected by nodes still enforcing them.

A fundamental break in Bitcoin’s cryptography would represent a much larger problem. Modern banking, secure websites, corporate systems, and government communications also depend heavily on cryptographic security. An AI system capable of defeating widely used cryptography could therefore threaten far more than Bitcoin.

AI Could Strengthen the Defenses

There is another problem with treating AI solely as an attacker. Developers and security researchers can use the same technology to examine code, discover bugs, automate testing, and identify weaknesses before criminals exploit them.

That leaves Schiff’s strongest point centered on economics rather than Bitcoin’s ultimate survival. AI can compete with bitcoin miners for electricity, capital, and data centers, potentially squeezing mining margins and accelerating the industry’s search for cheaper power.

What matters next is whether that competition pulls substantial computing power away from the Bitcoin network and whether AI produces meaningful advances in vulnerability discovery. For now, competition between AI and bitcoin mining is somewhat measurable, although muddy, while the prospect of AI breaking Bitcoin’s fundamental rules remains misguided.