📣 Message from Us
Welcome back. 👋 Each week we cut through the noise and explain what’s driving crypto. This week we unpack the revived debate over a major Bitcoin hack and what it shows about crypto transparency, along with updates on congressional progress, global adoption trends and new moves from US regulators.
- Validator Digital
📈 This Week in Markets
Crypto markets have struggled to regain momentum following the 10/10 flash crash and continued macroeconomic headwinds. Bitcoin appears to be testing a bottom around $90K; if that level holds, strong industry fundamentals could fuel a move higher. If not, be prepared for another leg down. Across the rest of the market, major altcoins are showing mixed performance, with some stabilizing while others remain under pressure as liquidity thins.
🔦 The Real Story Behind China’s Claim the U.S. Stole 127,000 BTC
What’s Happening
In 2020, about 127,000 bitcoin were stolen from LuBian, a Chinese mining firm, in one of the largest crypto hacks ever recorded. The identity of the original hacker has never been determined, but the stolen coins sat in publicly visible Bitcoin wallets, allowing investigators to track them in real time. As those funds later passed through intermediaries during attempted laundering, U.S. law enforcement obtained access to the private keys and legally seized the wallets as part of a criminal investigation. China’s cybersecurity agency is now reframing that seizure as the United States “stealing” the bitcoin — a political claim that conflicts with how the funds were actually recovered.
Recent Developments
The renewed attention has highlighted how the entire stash has been monitored from the moment it was taken. Because Bitcoin operates on a public ledger, analysts have followed the movement of the LuBian coins for five years, mapping every hop across wallets and identifying the intermediaries who eventually interacted with U.S.-based infrastructure. This transparency (anyone can trace the full history of a token from wallet to wallet) is what enabled law enforcement to freeze and recover the funds once the keys were obtained.
Why It Matters
Stories like this reinforce a common misconception that crypto is primarily used for crime. The data shows the opposite. Chainalysis estimates that 0.25% of crypto activity is illicit each year.
By comparison, global watchdogs estimate that 2–5% of global GDP is laundered through traditional fiat systems, mostly via banks, cash, and opaque offshore structures every year.
The difference is structural. Fiat transactions disappear inside private ledgers, shell companies, and bank-to-bank pathways. Crypto transactions happen on a public chain that anyone can audit, which is why large thefts are often tracked for years until enforcement agencies eventually gain access to the keys.
The Bottom Line
While China’s latest accusation injects geopolitics into an old case, the underlying mechanics tell a different story. Public blockchains make it possible to follow the full lifecycle of stolen funds, often for years, and that visibility has become one of the most effective tools for recovering digital assets. When compared with the scale and secrecy of crime in the fiat world, crypto’s transparency is not a weakness but one of its most misunderstood strengths.
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⏩ What Else You Need to Know
Congress Reopens With Fresh Bipartisan Push on Crypto Rules
After returning from the shutdown fight, Senators released a bipartisan crypto market structure proposal that builds on the House Clarity Act, which passed in July 2025. The bill continued circulating during the shutdown as staff from both parties refined language in the background. The Clarity Act is the House’s broad effort to define digital assets in federal law, a wider approach than the Genius Act that focuses on stablecoins. The new Senate draft is one of the first major bipartisan steps on digital assets in months.XRP ETF Sets a 2025 Launch Record Despite Market Declines
The first U.S. spot XRP ETF posted $58 million in first-day trading volume, the largest day-one total for any ETF launched in 2025, and drew more than $200 million in early inflows. That traction came during a broad crypto market pullback, signaling that institutional demand for regulated XRP exposure is stronger than the current price environment suggests.Bolivians Turn to Crypto as Inflation Accelerates
Bolivia is seeing a rise in everyday crypto use as inflation weakens the boliviano, with many people turning to Bitcoin and dollar-backed stablecoins simply because they’re easier to get and hold than physical U.S. dollars. Similar behavior is showing up in Argentina and Turkey, where residents convert savings into stablecoins to preserve purchasing power during periods of rapid price increases.SEC and CFTC Advance Joint Token Taxonomy Under “Crypto Sprint” Initiative
The SEC and CFTC said they will develop a shared “token taxonomy” to define which digital assets fall under securities rules and which fall under commodities oversight — this is part of the agencies’ broader Crypto Sprint effort to coordinate on digital-asset regulation. Regulators described the taxonomy as a first step toward reducing industry confusion and creating a consistent framework for token issuers, custodians and exchanges.Cash App Introduces Stablecoin Payments
Cash App, the popular peer-to-peer payments app with 57 million monthly users, is rolling out support for sending and receiving regulated dollar stablecoins. The update brings near-instant “digital dollar” transfers to a platform that moved more than $200 billion in P2P volume last year, marking one of Cash App’s biggest steps toward integrating blockchain-based settlement into everyday consumer finance.
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📊 Video of the Week
Despite Selloff, the Bitcoin Fundamentals Have Not Changed
John D’Agostino, Coinbase’s head of institutional strategy, explains why the recent pullback does not change the core Bitcoin story. He walks through the familiar four year cycle pattern, the history of deep drawdowns followed by strong recoveries, and the growing structural support from ETFs, endowments, central banks, and bank led stablecoin programs. His message is simple. If the thesis made sense in September, it still makes sense now.
🧩 Blockchain 101: Quiz Time
This week…it’s quiz time.
After ten weeks of building a real understanding of blockchain — one simple idea at a time — it’s time to put that knowledge to the test.
A quick, fun Blockchain 101 quiz is ready based entirely on what’s been covered so far. It only takes a couple minutes, and it’s a great way to see how much has sunk in.
Ready to find out how much you know? Take the quiz → here
Thanks for reading this week.
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See you next week,
Don’t speculate, validate.
- Validator Digital
Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This newsletter is for general educational purposes only, is not individualized, and as such should not be construed as investment advice.