The crypto market ended the week lower as security and regulatory concerns intensified. HEX lost $246 million in market value after its founder, Richard Schueler, known as Richard Heart, was detained in Istanbul. Ledger unveiled an $849 hardware device, while Starknet opened a vote on whether to move from an Ethereum layer-2 network to a quantum-resistant layer-1 blockchain. Standard Chartered also revised its stablecoin forecast, and major crypto assets broadly declined.
HEX market value falls from $561 million to $315 million
Turkish authorities detained Schueler on October 14 in Istanbul's Besiktas district. Turkey's Justice Minister Akın Gürlek said police recovered $7.15 million in cash, firearms and ammunition during an early-morning operation and searched 15 associated addresses. Nine luxury cars registered in Schueler's wife's name were also reportedly seized. The items recovered additionally included 28 watches, 300 bags and 19 graphics cards.
Interpol issued a red notice for Schueler two years ago after Finnish authorities sought his arrest over tax-evasion and assault allegations. A spokesperson for Finland's National Bureau of Investigation declined to comment. Turkish coverage has referred to Schueler as 'Whale James' and linked him to a US case involving an alleged $1 billion unregistered securities offering. A US judge dismissed that case in February 2025.
Images circulated in Turkey appeared to show Schueler without trousers, with the lower half of his body blurred, prompting discussion on social media. Eric Wall, who has publicly criticised and debated Schueler on multiple occasions, said he initially thought the images had been generated by artificial intelligence before concluding they could be genuine. Some HEX supporters said authorities had not confirmed whether Schueler had been formally arrested or charged. The legal status of the detention and the investigation remains unclear.
Ledger prices tamper-resistant Atom device at $849
Ledger, the French hardware-wallet maker, announced its new Atom device on Thursday at a price of $849, with release scheduled for summer 2027. The product uses a smartphone-like design to combine a crypto wallet with everyday applications, while separating Android applications from sensitive wallet operations.
Ledger said Atom includes protections designed in response to recent incidents involving malicious implants in wallets distributed through Asian channels. The device can detect tampering even while powered off. The company also said Atom will support artificial-intelligence agent approvals, encrypted communications and post-quantum cryptography.
Days before the product announcement, Ledger confirmed that some wallets sold through Asian resellers had contained malicious implants. The company suspended its Asian reseller channels after the incident. The thefts associated with the episode were reported to have exceeded $90 million.
Mark Karpeles, the former chief executive of Mt. Gox, said at least two people had alerted Ledger to spyware found in tampered devices as early as December 2025, and that the company had mentioned the issue on its website in March 2026. He criticised Ledger's handling of its reseller supply chain. Ledger CEO Pascal Gauthier responded on X that Karpeles was not a 'white knight' and referred to management problems before the Mt. Gox hack. Karpeles said he had expected Ledger to learn from Mt. Gox's mistakes. Their dispute centres on when the company received warnings and what steps it took in response.
Starknet weighs a shift to a quantum-resistant layer 1
Advances in quantum computing have renewed attention on the long-term security of cryptographic systems. Google demonstrated a process known as magic-state distillation on its Willow quantum processor, reducing the error rate by 40 times. A specialised quantum state used for advanced computing reached an accuracy rate of 99.99%. Theta Labs also released three new quantum circuits and said they could reduce the number of quantum bits needed to break elliptic-curve cryptography by 28% from Google's current estimate of 1,175 logical qubits.
Against that backdrop, Starknet opened a vote on whether to move from an Ethereum layer-2 network to a quantum-resistant layer-1 blockchain. StarkWare CEO Eli Ben-Sasson said Ethereum's post-quantum roadmap may not respond quickly enough to challenges created by artificial intelligence, leaving Starknet to consider a more extensive architectural change. More than 99% of votes cast supported the proposal at the time of writing. The STRK token fell 46.7% this week after posting a sharp gain the previous week.
Standard Chartered delays $2 trillion stablecoin forecast to 2030
Standard Chartered said stablecoin transaction activity continues to grow, but the overall market has recently stabilised. That suggests existing stablecoins are circulating more frequently rather than growth being driven mainly by new issuance. The bank now expects total stablecoin market capitalisation to reach $2 trillion in 2030, two years later than its previous forecast. The market had reached approximately $309 billion at one point this year.
The European Banking Authority has classified Circle's USDC as a significant e-money token under the European Union's Markets in Crypto-Assets Regulation, or MiCA. There are now 45 projects in that category. The classification provides greater clarity for USDC's position within the EU regulatory framework, but it is separate from forecasts for the size of the overall stablecoin market.
Binance.US seeks funding at potential $1 billion valuation
US crypto exchange Binance.US is seeking up to $100 million in private funding at a potential valuation of about $1 billion. The platform plans to use the financing to expand its business. If completed at that valuation, the transaction would be below the $4.5 billion pre-money valuation attached to its $200 million seed round in 2022.
Bitcoin drops 3.8% as STRK leads weekly declines
By the end of the week, Bitcoin was down 3.8% at $81,484. Ethereum fell 5.7% to $2,386, while XRP declined 8.3% to $1.28. CoinMarketCap data put total crypto market capitalisation at $2.72 trillion.
Among the 100 largest crypto assets by market value, the biggest gainers were Monero (XMR), up 9.7%; Injective (INJ), up 5.6%; and Celestia (TIA), up 5.1%. The steepest declines came from Starknet (STRK), down 46.7%; Pump.fun (PUMP), down 27.1%; and Raydium (RAY), down 26.5%.
Bitwise says the third quarter may mark a crypto recovery
Bitwise Chief Investment Officer Matt Hougan said the third quarter could rank among the stronger quarters in crypto market history, pointing to a price rebound and growth in on-chain markets as signs of improving conditions. Bitwise's quarterly market review, released Thursday, showed its broad crypto asset index gaining 46.4% during the quarter. US spot Bitcoin ETFs recorded $6 billion in inflows, pushing net flows for the year back into positive territory.
Hougan said the recent strengthening in chart patterns was a development worth watching when assessing whether the market had entered a recovery phase. That view coexisted with weekly declines in major tokens, highlighting the difference between performance over a quarter and movement over a single week.
New MSCI rules could affect corporate crypto reserves
Index provider MSCI has adopted new rules that could remove Strategy, Metaplanet and Upexi from its global indexes. Other companies holding large crypto reserves could also face exclusion. Strategy opposed the change but said the potential effect would be limited: funds tracking the MSCI Global Investable Market Index hold about 13 million shares of the company, equal to 3.1% of its common stock and less than one day's trading volume.
Russia plans to ban direct peer-to-peer crypto transactions between individuals from July 1, 2027. Such transactions would have to go through authorised intermediaries. Regulators also said individuals would not be allowed to transfer crypto assets from digital accounts to their own non-custodial wallets. The rules would affect both the channels available for trading and how users retain direct control of their assets.