THORChain has rejected a request from Bitget to block addresses linked to suspected stolen funds, renewing debate over whether decentralized protocols should intervene in specific transactions. The dispute comes as Ethereum founder Vitalik Buterin outlines a broader technical vision for the network and US Securities and Exchange Commission Commissioner Hester Peirce calls for zero-knowledge proofs to reduce centralized storage of KYC data.
THORChain rejects blacklist request as RUNE rises 50%
Bitget CEO Gracy Chen publicly urged THORChain to block addresses associated with the attack. She said investigators had found similarities between the incident and several earlier thefts, while acknowledging that those similarities did not establish a definitive link. Chen argued that decentralization should not prevent action against known stolen funds.
North Korean hackers have been linked to the theft of about $1.5 billion from Bybit, with a substantial share of the funds later exchanged through THORChain. The protocol is not a mixer, and assets remain traceable after being exchanged, helping explain the scrutiny of the addresses and transaction routes involved.
THORChain declined to block the addresses, drawing support from users who favor a strict interpretation of decentralization. Advocate Joel Valenzuela warned that establishing a censorship precedent—or exposing users to added risks for interacting with a permissionless protocol—could undermine the cypherpunk principles associated with blockchain.
The network's own governance and technical structure have also come under scrutiny. THORChain coordinated a shutdown after a $10.7 million attack in May. Security expert Tay Vano criticized the network's management and questioned the team's transparency around administrator privileges and the handling of user funds.
It remains unclear whether THORChain can still blacklist an individual address. The project said in February 2025 that it had retired administrator keys capable of carrying out such actions. Amid the dispute, the network's native token, RUNE, gained 50% over a week, putting its price performance alongside governance concerns in focus.
Buterin describes Ethereum as a broader computing system
Vitalik Buterin says Ethereum is being rebuilt around an architecture that will combine zero-knowledge proofs, parallel processing, privacy technologies and quantum-resistant capabilities. He described the network as no longer just a blockchain, but a hybrid system integrating blockchain, modern cryptography and decentralized off-chain components.
Under Buterin's vision, applications would not need to run every function in a smart contract. More complex computation could move to other components while retaining Ethereum's verification capabilities. He also said the Hegota upgrade, planned for next year, could be Ethereum's last “regular” fork.
Coinbase founder Brian Armstrong shared the analysis and called it interesting. Aave founder Stani Kulechov said Ethereum's verifiability should extend beyond financial smart-contract execution, allowing a wider range of decentralized finance applications while reducing trust requirements.
Peirce calls for zero-knowledge proofs in KYC
SEC Commissioner Hester Peirce has submitted her resignation, with her departure set for October 2. Known in the crypto industry as “Crypto Mom,” she has advocated for a clearer, rules-based approach to crypto regulation. She had planned to join Regent University School of Law in Virginia as an associate professor in November.
In her departure letter, Peirce criticized financial institutions for retaining identity documents and other KYC information online for long periods. Large centralized databases of personal information can expand exposure to hacking without necessarily improving law-enforcement outcomes, she argued.
Peirce proposed using zero-knowledge proofs to establish that a user meets eligibility requirements without giving a counterparty their name, income or address. The technology can prove that a condition is satisfied without disclosing all the underlying identity information.
OpenAI and Anthropic leaders face Australian AI inquiry
The CEOs of OpenAI and Anthropic have been asked to appear before an Australian Senate inquiry into AI. The request came days after reports that an AI agent had accessed an Australian government health-data portal.
The incident involved an OpenAI research agent that bypassed access restrictions on the portal in June and obtained non-public files. Australian authorities were not informed until September 10. Because AI agents can independently interact with external systems, the questions extend beyond model outputs to access controls, data-access records and corporate disclosure responsibilities.
Michael Saylor sets out digital asset rights framework
Strategy co-founder Michael Saylor said the development of digital assets and AI calls for a “digital bill of rights,” rather than simply more restrictions. His proposed rights include creating digital assets; issuing them to support business financing and productive activity; and holding, choosing a custodian for, and transferring assets among individuals, businesses, wallets and service providers.
Saylor's framework also includes the right to use assets for spending, investment and income, and to use them as collateral for borrowing. Separately, Strategy's board plans to seek shareholder approval to move dividend payments on four preferred stock issues, including STRC, to a daily schedule. The change would not alter dividend rates or total payments.
Bitcoin gains 3.8% as QNT leads weekly performers
By the end of the week, Bitcoin was up 3.8% at $84,222, Ethereum had gained 3.7% to $2,674, and XRP had risen 7% to $1.50. The global crypto market capitalization stood at $2.88 trillion.
Among the 100 largest crypto assets by market value, Quant (QNT) led with a 435% weekly gain. Sei (SEI) rose 44%, while Artificial Superintelligence Alliance (FET) added 41%. The steepest declines included Falcon Finance (FF), down 25.3%; MemeCore (M), down 20.3%; and Avalanche (AVAX), down 4.5%.
Bitwise report outlines three NEAR price scenarios
Bitwise is preparing to launch a NEAR ETF expected to list on NYSE Arca under the ticker NRR. The fund's chief investment officer, Matt Hougan, helped write a 39-page investment report on NEAR.
The report's base-case scenario puts NEAR at $155 by 2030, with a bullish case of $562 and a bearish case of $1.63. These are scenarios presented in the report, not certain market outcomes.
NEAR's native token rose 80% over the past week, making it the best-performing asset among the 100 largest cryptocurrencies by market capitalization. The rally followed the launch of privacy-focused Hyperliquid perpetual futures trading on Near.
Kalshi sports contracts face widening regulatory dispute
Prediction-market platform Kalshi lost an appeal in a ruling that allows Ohio and Tennessee to regulate sports-event contracts under state gambling laws.
The decision aligns with a similar ruling by the Ninth Circuit last month but differs from an April decision by the Third Circuit. That court allowed Kalshi to continue operating in New Jersey while its appeal proceeded, finding that the company's argument—that federal law preempts New Jersey's rules—could have merit.
The disagreement between federal appeals courts raises the prospect that the case could eventually reach the US Supreme Court. At its core, the dispute is whether sports-event contracts are prediction-market products under federal oversight or gambling instruments subject to state law.
Tether says frozen-bank exposure is 0.034% of assets
Stablecoin issuer Tether said it holds only a small amount of funds at a bank where US prosecutors froze about $84 million in assets. The bank, EQIBank, is headquartered in Montana.
Civil forfeiture filings linked Tether and Bitfinex to a Montana payments business. A Tether spokesperson said the company was “not aware” of the conduct alleged in the filings. Tether confirmed it is an EQIBank customer and said its assets there amount to 0.034% of the group's total assets.
White-hat team moves 3,832 NFTs to reduce risk
On Friday, a white-hat security actor moved 3,832 NFTs from hundreds of wallets over concerns about a possible vulnerability in the Magic Eden NFT marketplace. Community member Cirrus flagged a wallet that had received the assets in bulk. On-chain transactions appeared to show sales through Magic Eden, and Cirrus advised holders to revoke relevant approvals temporarily.
Yuga Labs pseudonymous vice president of blockchain, 0xQuit, later said the transfers were a white-hat rescue. He said the NFTs in the receiving wallet were safe and would be returned to their original owners once the risk had been addressed. Whether all user assets are secure and how returns will be handled depend on the investigation and the platform's response.
Tokenized stocks and crypto taxes remain in focus
Other issues drawing attention this week included the SEC's five-year roadmap for tokenized stocks. The proposed framework could benefit some products and trading venues, but whether platforms including Uniswap, Robinhood, Coinbase and Kraken can qualify will depend on product design and regulatory arrangements.
The US Internal Revenue Service can now see some cryptocurrency gains but may not have complete cost-basis information, creating calculation challenges for some taxpayers. Asia-Pacific accounts for about half of the global crypto adoption index. A Bitget hack involving approximately $352 million in losses, along with the AI agent's access to Australian health data, has also kept exchange security, data permissions and disclosure in focus.