Key News from Last Night and This Morning (October 11–October 12)

Microsoft CEO: In the era of superintelligence, we cannot rely on AI "black boxes"; external control and audit systems are needed

Microsoft CEO Satya Nadella published a post stating that as the capabilities of superintelligence (Super Intelligence) systems rapidly improve, the industry needs to rebuild the AI trust architecture and cannot leave the responsibility for AI execution behavior to model providers.

Over the past few decades, when traditional software systems were widely deployed, people could trace the specific code paths corresponding to program behavior. But today's frontier AI models, although their capabilities have surpassed traditional software systems, cannot clearly attribute model outputs to specific training data or model weight configurations. Companies are currently letting complex AI agents access sensitive data and granting them the ability to execute critical tasks, so superintelligence systems cannot be treated as incomprehensible "nested black boxes" whose suggestions are simply accepted or rejected; instead, controllable systems need to be built that can observe behavior, test boundaries, and restrict actions at any time.

In terms of governance principles, Nadella proposed that superintelligence systems need to have:

- Model diversity: avoid a single model becoming the sole dependency for critical decisions;

- Comprehensive observability: all important AI behaviors should leave tamper-proof and human-readable records;

- Continuous verification capability: continuously test system performance in the face of failures, attacks, and anomalies;

- Independent control and auditing: models should not simultaneously control system behavior and the evidence verifying their own behavior;

- Risk isolation mechanism: assume by default that models may fail, and provide the ability to pause or shut down at any time;

- Incident disclosure mechanism: promptly disclose causes and improvement measures when failures or security incidents occur.

Nadella also emphasized that chain-of-thought (CoT) transparency is an important foundation for AI governance, but CoT transparency alone is not enough, because it is still impossible to guarantee that model outputs always have reliable interpretability. The most trustworthy superintelligence systems of the future are not "the most trustworthy models," but systems that can still operate safely even when the model cannot be fully trusted.

Ledger incident continues to escalate: attacker has transferred $7.45 million in ETH to Tornado Cash

An attacker address related to the CryptoBilis Ledger hardware wallet incident deposited 2,990.3 ETH, worth about $7.45 million, into Tornado Cash between October 9 and 10.

Monitoring data shows that the attacker previously dispersed the relevant funds to 14 addresses, then cross-chain converted the funds to the ZEC network via NEAR Intents and further processed them for privacy protection. There were signs of address linkage during the attacker's fund transfers. Among them, some withdrawal transactions reused wallet addresses previously used for deposits; other withdrawal transactions were initiated by wallets associated with the wallet addresses that paid gas fees when the funds were stolen, thereby helping researchers trace the flow of funds.

At present, the relevant funds have been transferred and hidden through multiple on-chain paths. Previously, CryptoBilis was exposed as being involved in a Ledger hardware wallet supply chain security incident. Ledger has confirmed that an affected user's device had an unauthorized hardware implant and stated that it is cooperating with relevant parties and law enforcement agencies in the investigation. Ledger previously reminded users who purchased devices from affected distribution channels and have not yet completed initialization to refrain from using them; users who have completed setup may consider migrating assets to a new device with a new mnemonic phrase.

Data: CRO, ARB and other tokens will see large unlocks next week, with CRO unlocking about $69.5 million

Token Unlocks data shows that tokens such as CRO, ARB, and STRK will see large unlocks next week, including:

Cronos (CRO) will unlock about 1.17 billion tokens at 9:03 a.m. Beijing time on October 17, about 2.33% of circulating supply, worth about $69.5 million;

Arbitrum (ARB) will unlock about 92.65 million tokens at 8 p.m. Beijing time on October 16, about 1.56% of circulating supply, worth about $18.4 million;

Starknet (STRK) will unlock about 127 million tokens at 8 a.m. Beijing time on October 15, about 3.37% of circulating supply, worth about $13.9 million;

deBridge (DBR) will unlock about 618 million tokens at 8 a.m. Beijing time on October 17, about 10.25% of circulating supply, worth about $12 million;

Aptos (APT) will unlock about 11.31 million tokens at 4 a.m. Beijing time on October 12, about 0.64% of circulating supply, worth about $9.5 million;

Sei (SEI) will unlock about 55.56 million tokens at 8 p.m. Beijing time on October 15, about 0.84% of circulating supply, worth about $3.7 million.

Michael Saylor posts Bitcoin Tracker information again, may disclose position change data next week

Michael Saylor once again posted Bitcoin Tracker-related information on the X platform, with the caption "There's always room for more orange." Based on previous patterns, Strategy usually discloses Bitcoin position change information the day after such messages are posted.

US Treasury Secretary Bessent: Trump expects no military conflict before the midterm elections

US Treasury Secretary Bessent said that US President Trump expects no military conflict before the midterm elections, that diesel transactions with Russia are beneficial to Americans, and that we will use all legal authority to conduct diesel transactions with Russia.

Trader Killa: BTC may rally before the US midterm elections, with a target around the $95,000 range

Trader Killa published a post sharing his views on Bitcoin's (BTC) future trend. He said the most ideal scenario at present is for BTC to continue rising before the US midterm elections, strengthening the bullish market narrative and breaking through previous highs; subsequently, the market may, as in past cycles, see a correction after the midterm elections end, but this pullback is expected not to form a new cycle low, and may instead establish a higher low.

Killa said that if BTC chooses to fall before the midterm elections, he believes the market is more likely to rebound after the elections, with a target around $95,000. Midterm elections are usually viewed by the market as a potential bullish or bearish catalyst. But judging from the current price trend, market sentiment, and recent long liquidations, he believes shorts currently face higher risks than longs. He also cited historical data saying that in the past four US midterm elections, three saw weak market conditions one to two months after the election; based on that sample, the probability is about 75%. Therefore, he believes the market may be more inclined to see significant risk release after, rather than before, the midterm elections.

However, Killa emphasized that his judgment is based on historical data and market statistics, not simply a hope that the market will rise. He said he still holds the previously established 10x BTC long position, as well as long positions set up near $62,600 and $76,400, and all positions remain fully allocated.

Ledger supply chain attack suspected to have spread to Europe; user says hardware implant found in device from official dealer

Security researcher Johannes disclosed that a hardware wallet purchased by a user from an official European Ledger dealer was found to contain an unauthorized hardware implant several weeks after purchase. According to reports, suspicious wiring that does not exist in normal Ledger hardware appeared inside the device, indicating that the device may have been physically tampered with before sale. The researcher said the implant is suspected to use an earlier design, while newer implant components may be hidden behind the screen, increasing detection difficulty.

Notably, no funds have been stolen from this device so far. The researcher said it is unclear whether the implant is faulty, or whether the attacker is still waiting for more user devices to be controlled.

Previously, the CryptoBilis Ledger incident had already raised supply chain security concerns for hardware wallets. As suspected related cases have successively appeared in Asia, South America, and Europe, market concerns about the scope of the supply chain attack have further intensified. In addition, the researcher pointed out that Ledger's official Genuine Check software is mainly used to verify device authenticity, and may not be able to detect unauthorized physical hardware modifications when the original Secure Element has not been compromised.

Analyst: Bitcoin may need to break through $84,000–$85,000 to determine the next trend

Crypto analyst Darkfost said that when Bitcoin's price reached $83,000, about 53% of capital costs were above that price, meaning current buyers' holding costs are already higher than those of more than half of market participants.

Darkfost pointed out that the $84,000 to $85,000 range is Bitcoin's largest chip distribution area, where many investors will react at this key price level, and this area is an important resistance level that Bitcoin needs to break through for its subsequent trend. If the price pulls back, the $79,000 to $77,000 range may become a potential support area.

PaperTrade responds to fairness and manipulation questions: queue mechanism ensures fairness, some users manipulating BBO cannot sustain profits

PaperTrade published a post responding to community discussions after its launch, stating that its fair launch mechanism, small-order priority, and BTC/ETH market volatility issues were all considered during the design phase, and that trading volume in the first six hours after launch already exceeded the stock market's trading volume over the same period. One day after launch, the platform had already grown into an exchange supporting 1000x leverage, with a liquidity pool (LP) size of $5 million, and had distributed $25 million in rewards to staking users.

Regarding the controversy over the fair launch mechanism, PaperTrade said that under technical constraints, it is impossible to give small orders and large orders exactly the same priority; otherwise the frontend could face a large number of spam requests causing congestion and affecting the overall trading experience. The team said the existing queue mechanism is the fairest possible solution designed under these constraints. Regarding the abnormal trading and manipulation questions in the BTC/ETH market during launch, PaperTrade said this was not an omission in a mechanism designed over six months, but rather because a relatively loose open interest cap (OI cap) was set in the early launch period to cope with heavy demand. The team said that during periods of high queue pressure, tightening position limits too early could further worsen user experience.

PaperTrade said that as early-launch traffic declined, the team has begun tightening OI limits at the on-chain and relay levels to reduce the space for market manipulation. The team said that in such systems, manipulation can always occur, and the key is to adjust parameters so that manipulation is difficult to profit from economically and related attempts bear high costs. Some users who attempted to manipulate Hyperliquid's BBO (best bid and offer) ultimately did not sustain profits; one of the relevant users continued to attempt operations after profiting, and ultimately returned most of the profits to the platform through subsequent operations. Some users also chose to cancel affected trades and receive corresponding Paper points rewards in exchange. The team hopes to build a trading mechanism that operates at scale in an adversarial environment, and to continuously optimize market parameters to avoid either the platform or traders gaining unreasonable advantages.

South Korea's KOSPI index falls 1%, SK Hynix drops over 2%

South Korea's KOSPI index's decline widened to 1%, at 6,557.84 points. SK Hynix fell more than 2%, and Samsung Electronics fell nearly 1%.

Billionaire Adam Weitsman buys 117 Pudgy Penguins NFTs

Billionaire Adam Weitsman posted that he purchased 117 Pudgy Penguins on-chain last weekend. Weitsman said the project is currently going through a difficult period, but he hopes to support one of his favorite collections.

Last August, Adam Weitsman purchased more than 5,000 NFTs from Yuga Labs, including Otherdeeds, Mega Kodas, and Weapon Kodas, to continue expanding his collection.

XRP Ledger Foundation clarifies misunderstandings about security fix: vulnerability did not mint additional XRP, community consensus drove the patch

The XRP Ledger Foundation published a post clarifying questions raised by the recent XRP Ledger security fix. First, the vulnerability did not create any new XRP. The total XRP supply was fixed at 100 billion at the ledger's launch, and no transaction can mint additional XRP. The vulnerability could have bypassed this rule and was fixed in version 3.4.1 (about two weeks ago). All ledger data is publicly verifiable, and about 99.986 billion XRP currently exist.

Regarding why the vulnerability was not discovered earlier, the Foundation said that ordinary payment transactions are far from sufficient to trigger the vulnerability, which requires hundreds of deliberately crafted operations. AI has made it faster for both malicious attackers and security researchers to discover such vulnerabilities. Going forward, it will strengthen formal verification, AI adversarial testing, collaboration with security researchers, and enhance the bug bounty program.

Regarding decentralization and the fix method, the Foundation said that a public amendment vote would expose the vulnerability's location in advance. The community (including XRPLF, RippleX, core developers, and validators) reached social consensus and directly released the fix patch. No single party could make this decision unilaterally. Every validator and node operator can independently choose what software to run; the mandatory implementation of version 3.4.1 was carried out based on the regular "amendment" voting mechanism: it required support from more than 80% of validators and had to be maintained for two weeks. Protocol changes still follow the amendment process.

Coinbase CEO: Fine-tuned Qwen3.5-9B model performs better, cheaper, and faster for fraud prevention

Coinbase CEO Brian Armstrong said that after the company internally fine-tuned the open-weight model Qwen3.5-9B using proprietary data, it outperformed frontier large models on the specialized task of fraud prevention, while being cheaper and faster. Armstrong said this pattern will appear more often within enterprises in the future: frontier models excel at general tasks, while specialized models targeting niche domains will perform better. Coinbase is simplifying the process for internal employees to fine-tune models, even providing internal skill instructions to help quickly start training, and expects some backend services to be fully replaceable by such architectures.

Two Ethereum Foundation-linked wallets transferred 4,393 ETH, about $11.13 million, to Kraken four hours ago

Two Ethereum Foundation-linked wallets transferred 4,393 ETH (about $11.13 million) to the Kraken exchange four hours ago. The wallet that transferred ETH today received 59,751 ETH from an Ethereum Foundation wallet 10 years ago, of which 49,751 ETH has been gradually transferred to the Kraken exchange over the past 10 years at an average price of about $658.

South Korea's Jeonbuk Bank launches Korean won loan program collateralized by Bitcoin

Jeonbuk Bank, under JB Financial Group, has launched South Korea's banking industry's first Korean won loan program linked to digital assets. Initially available only to corporate customers, it uses Bitcoin as the sole collateral, and the loan purpose is limited to business operating funds. The bank does not directly hold or manage Bitcoin; instead, it is custodied by qualified virtual asset service providers. In the event of default, the bank does not acquire ownership of the virtual assets, but rather recovers its claims by converting the collateral through procedures such as court auctions in accordance with the revised Civil Execution Rules. At present, Jeonbuk Bank has completed stress testing and established a valuation system based on the weighted average prices of multiple global exchanges.

Binance bStocks to distribute Micron Technology stock dividends to MUB holders

Binance will distribute Micron Technology (MU) stock dividends to users holding MUB through bStocks. After deducting applicable withholding taxes, fees, and other related expenses, the net cash dividend will be automatically reinvested in the same underlying security, and eligible users will receive the dividend in the form of MUB stock tokens. Users holding MUB balances on-chain will receive bStocks dividends through a multiple adjustment.

The dividend eligibility snapshot time is 8:00 on October 14 (UTC+8). Binance will suspend the 1:1 conversion service between MU stock and MUB bStocks, as well as MUB deposit/withdrawal and conversion functions, at 07:30 on October 14 (UTC+8), and these will automatically resume after the distribution is completed. Dividends generated by other accounts will be credited to spot accounts.

South Korea's KOSPI index decline widens to 3%, SK Hynix drops over 4%

South Korea's KOSPI index's decline widened to 3%, now at 6,427.08 points. SK Hynix fell more than 4%, and Samsung Electronics fell nearly 4%.