Blockchain & Digital Assets Briefing — November 2, 2026

Top stories

A self-hosted payments project tells merchants to switch off, and Binance's customers test the exits.

BTCPay tells every merchant to shut down their server after attackers sweep hot wallets
BTCPay Server, the open-source software merchants use to accept bitcoin without a processor, told operators at 22:25 UTC on Sunday to run ./btcpay-down.sh and keep instances offline after receiving reports that hot wallets on its servers were being swept. Founder Nicolas Dorier said the reports appeared to involve releases older than 2.4.2 and that the attacker had logged in as an administrator, without explaining how. By 04:07 UTC on Monday the project had narrowed the attack vector to version 2.4.1, released July 23, or older, and said it had no credible reports of drains on the current 2.4.7 release. That release shipped Thursday as an emergency update addressing 85 findings from an Anthropic-run security scan, including one critical and 13 high-severity issues. Hosting providers including LunaNode shut down older hosted instances on their own. BTCPay has published no loss figure and no count of affected servers.
Why it matters: This is the counterpart to last week's exchange hack, and the more instructive one. Nobody's keys were mathematically broken; merchants who had not updated software since July lost balances because a hot wallet stores the signing seed on the same internet-facing machine that accepts payments, so administrator access is spend access. Self-custody removed the counterparty but transferred the patch-management burden to the merchant, and there is no central operator who can flip a switch, which is why the only available response was asking every operator to do it themselves. The practical takeaways are unglamorous: watch-only or hardware-backed signing for balances above refund float, and treat a self-hosted payment stack as production infrastructure with a patch SLA rather than a plugin.

Binance customers pull $3.64 billion in nine hours as withdrawals reopen
Between 06:00 and 15:30 UTC on Sunday, Binance processed $4.649 billion of withdrawals against $1.01 billion of deposits, a net outflow of about $3.64 billion, or 2.1% of the $171 billion in assets it reported in its October 28 proof-of-reserves snapshot. All 15 networks and assets in the first reopening phase were live by 12:36 UTC, though the exchange's status page still showed withdrawals suspended for most of its 552 listed coins. DefiLlama put 24-hour net outflows nearer $4.05 billion, with the next ten exchanges by assets taking in about $368 million combined over the same window. Bitcoin slipped 0.4% to roughly $77,900 after touching $78,700 in Asian hours, and THORChain fell 6.4%, the worst performer in the CoinDesk 100, after the FBI, Secret Service and IRS Criminal Investigation urged node operators to block addresses tied to the hackers.
Why it matters: The headline number is smaller than the panic implied: 2.1% of assets compares with roughly $6 billion out of FTX over 72 hours and about $7 billion out of USDC during the Silicon Valley Bank weekend, and Binance says withdrawal demand peaked and then fell back. What matters more is where the money went and what it implies about the next breach. Deposits at competing venues rising by hundreds of millions within hours says customers now run counterparty triage in real time, which is a durable competitive tax on any exchange with a security incident. And the pressure on THORChain, where node operators were asked to censor specific addresses, is the laundering-side test case: the same decentralised infrastructure that makes cross-chain swaps useful is what makes stolen coins hard to freeze.

Markets & institutional adoption

Analysts cut the exchange trade, ether funds keep bleeding, and two tokenisation venues move forward.

Morgan Stanley cuts Coinbase to underweight and halves its price target on weak earnings outlook
Morgan Stanley downgraded Coinbase to underweight from equalweight and cut its price target to $120 from $258, with analyst Michael Cyprys writing that confidence in an earnings recovery had deteriorated. The bank cut 2027 revenue estimates by 28% and adjusted EBITDA by 47%, and 2028 figures by 18% and 25%, leaving 2028 EBITDA at $2.4 billion, about 14% below 2025 despite the company's expansion into derivatives, custody and stablecoin-adjacent products. It also reduced the EBITDA multiple applied to the business to 12 times from 20. The note followed third-quarter results last Thursday that showed $1.22 billion of revenue, down 35% from a year earlier, and adjusted EBITDA of $333 million. COIN traded near $140 on Monday, close to a 52-week low and down about 58% over twelve months. BTIG kept a buy rating and a $240 target, arguing Coinbase could win share if the Binance breach pushes customers toward its custody business.
Why it matters: The interesting part is not the price target but what it says about the model. Coinbase's revenue is still dominated by transaction fees, and the third quarter demonstrated that higher prices did not restore trading volume, so the operating leverage analysts underwrote in 2025 has not arrived. Morgan Stanley cutting its multiple as well as its estimates is the standard signature of a de-rating rather than a bad quarter: the market stops paying for cyclical recovery and starts pricing a smaller structural business. For the sector, that is the constraint on everything else in this briefing. Tokenisation and 24/7 settlement are being built by institutions, not by retail trading revenue, and the two trends no longer move together.

Ether ETFs post a 23-day outflow streak as bitcoin funds lose $203 million for the week
U.S. spot ether ETFs recorded net outflows of $432 million in the week to October 30, against $203 million out of bitcoin funds and $71 million out of solana funds, with XRP products the only category to take in money at $4.32 million, according to SoSoValue data reported by Wu Blockchain. Fidelity's FBTC accounted for $166 million, about 82%, of the bitcoin outflows. Ether funds logged as many as 23 consecutive days of redemptions during October, the longest run since the products launched in July 2024, and combined October outflows across both asset classes cleared $1 billion. Bitcoin ETFs have taken in roughly $57 billion net since January 2024 and hold about $98 billion to $99 billion of assets, while ether funds have attracted roughly $12 billion to $14 billion cumulatively.
Why it matters: Direction matters more than the dollar totals here. Bitcoin's flows were mixed through October, alternating inflow and outflow days; ether's ran in one direction for almost the entire month, which is the signature of a persistent seller rather than tactical positioning, and it arrived while ether fell 16% in October, its second-worst October on record. That combination, a shrinking marginal buyer plus a 23-day redemption streak, is the backdrop for every treasury-management decision at an ether-adjacent protocol or restaking venue heading into year-end. The lone inflow, into XRP products, is too small to call a rotation, but it is worth tracking as evidence capital is moving between assets rather than out of the asset class entirely.

HKMA moves tokenised central bank money to 24/7 settlement and queues stablecoins for trials
The Hong Kong Monetary Authority said Ensemble TX, the live pilot phase of Project Ensemble, now settles interbank transfers of tokenised deposits in tokenised central bank money around the clock, with participating banks rising to 12 and industry pioneers to 20. The project had launched in November 2025 on the Hong Kong dollar RTGS system, which confined settlement to banking hours. The HKMA also said Recognised Dealers had completed trial secondary-market trades in tokenised Exchange Fund Bills, and that it will soon extend the trials to regulated stablecoins without naming issuers or a date. Separately at Hong Kong FinTech Week, HSBC Group chief executive Georges Elhedery said the bank's Hong Kong dollar stablecoin RedCoin had reached 50,000 users about ten days after its October 23 launch, and that HSBC offers tokenised deposits to wholesale clients in Hong Kong and roughly half a dozen other jurisdictions.
Why it matters: The settlement-hours constraint is precisely what kept tokenised money market funds and tokenised collateral from being more than a pilot: an instrument that can be transferred at 3am but only settled at 9am has not removed the friction it was built to remove. Putting tokenised central bank money behind those transfers closes that gap with the least credit risk available, and doing it on government paper rather than a commercial token gives the pilot a benchmark asset. The stablecoin line is the one to watch. Licensed private money joining the same rails as central bank money is the arrangement U.S. rules under the GENIUS Act will eventually have to interoperate with, and it turns a competition question, whose token wins, into an infrastructure question, whose rails settle the overnight flow.

tZERO plans to go public in a $350 million SPAC deal and list on the NYSE American
tZERO, which has built blockchain-based securities infrastructure since 2014, announced a business combination with FG Imperii Acquisition Corp, a Nasdaq-listed shell, valuing it at $350 million before new capital and providing up to $231 million of trust cash subject to shareholder redemptions. The combined company expects to trade on the NYSE American under the ticker TZRO in early 2027, with investors holding roughly 62% of the capital already signed up to support the deal and chief executive Alan Konevsky expected to stay on. tZERO holds more than 100 tokenisation patents and is a design partner on the NYSE-affiliated digital trading platform being built by Intercontinental Exchange, which took a patent licence and an equity stake in August. A patent dispute with rival Securitize is outstanding, and the deal still needs shareholder and regulatory approval.
Why it matters: Tokenisation infrastructure is now a public-market asset class rather than a venture bet, and this is the first clean way for equity investors to own the picks-and-shovels layer without buying an exchange or a bank. The structure deserves scepticism on two counts: SPAC trust cash is only nominally $231 million until redemptions are known, and a $350 million mark for a company with a decade of history and modest revenue is a narrative price. The substantive signal is the ICE relationship, because it puts tZERO's patent portfolio inside the plumbing of a legacy exchange's on-chain venue. If that platform launches, tokenised U.S. equities get a regulated venue, and the licensing layer around it becomes the thing worth owning.

Protocols, products & regulation

A permission bug gets a deadline, and Russia's main exchange sets a crypto start date.

XRP Ledger is set to close a loophole that let burn-only accounts mint new tokens
The XRP Ledger expects to activate the fixCleanup3_4_0 amendment around 14:46 UTC on November 4, closing a loophole that let an account authorised only to destroy an issuer's tokens create new ones under certain conditions. The practical case is a stablecoin issuer that gives a payments partner burn rights so it can redeem tokens for dollars at the counter, where that partner should need a separate grant to issue more. The ledger's documentation currently tells developers not to hand out the burning permission until the fix takes effect. The amendment has 33 of 35 tracked validators behind it against a threshold above 80% held for two uninterrupted weeks, after support briefly fell to 26 on October 21 and pushed activation from October 23. XRP's own supply is unaffected, and the bundle also corrects trading-pool recovery, vault and lending calculations. The lending service and the vault system it depends on still lack the validator support to launch.
Why it matters: Permission separation is the least glamorous and most consequential property of an issued asset. A stablecoin's redemption desk needs to burn supply when customers cash out; if the same grant quietly allows minting, the issuer's stated reserve backing stops being a verifiable claim and becomes a promise about its partners' operational discipline. That this surfaced as a ledger-level bug rather than an issuer incident is the good outcome. The governance detail is also a lesson: an 80% threshold held for a full fortnight means a two-hour dip in validator support costs two weeks of exposure, so amendment scheduling, not just code review, is part of the risk surface.

Moscow Exchange plans to start bitcoin, ether and USDT trading on December 1
Moscow Exchange confirmed it intends to begin trading bitcoin, ether and USDT on December 1, 2026, running through the infrastructure it already uses for securities, according to a report by RBC on an appearance by senior managing director Boris Blokhin at the Smartlab investment conference in Moscow. Blokhin said the exchange has begun testing crypto transactions with professional participants and will admit more firms as their systems are ready, and that its existing trading-organiser licence covers the service. Orders will match on an electronic order book, with swap transactions offered for liquidity management in a structure he compared to repo and FX swaps, and trading running from 06:50 to 23:50 Moscow time. The launch sits inside rules that took effect September 1: nonqualified investors face a knowledge test and a 300,000 rouble annual purchase limit per intermediary, while qualified investors face no cap. Domestic crypto payments for goods and services remain prohibited.
Why it matters: A venue with sovereign-market infrastructure, exchange-grade clearing and a broker network is a different distribution model from the crypto-native exchanges that dominate the U.S. and Asian markets, and it drops onboarding cost to roughly nothing for firms already connected to the exchange. The retail architecture, a knowledge test plus a hard annual cap per intermediary, is also the most explicit attempt yet to admit crypto exposure while structurally limiting it, and it will be watched by other jurisdictions weighing the same trade-off. The open question is not technical but jurisdictional: ruble-denominated USDT liquidity sits directly on the sanctions and correspondent-banking fault line, so the volume that matters will be measured by which foreign counterparties are willing to clear against it.

Bottom line

Three things moved today and only one of them is about price. Security first: BTCPay's sweeps show that patch lag, not broken cryptography, is where merchants lose coins. The project's own public servers on 2.4.7 were untouched while instances on 2.4.1 or older were drained through administrator access. Second, trust: Binance's $3.64 billion net outflow is 2.1% of the $171 billion it reports holding, modest beside FTX's $6 billion over 72 hours, but roughly $368 million landed at the next ten exchanges in the same window, so customers reprice counterparty risk in hours rather than quarters. Third, economics: Coinbase's third-quarter revenue fell 35% year over year and Morgan Stanley now models 2028 EBITDA 14% below 2025, which means price recoveries are no longer converting into volume, the input every exchange fee model depends on. Against that, the plumbing kept shipping: the HKMA put tokenised central bank money into 24/7 settlement, tZERO filed to list on the NYSE American, and the XRP Ledger is about to enforce a boundary between permission to burn and permission to mint. Tuesday's U.S. midterms decide the next variable, a statute or another year of agency discretion.

As of

November 2, 2026, 15:00 UTC. Prices are spot snapshots. This briefing was researched and generated for NPDev News subscribers; it is a news summary, not investment advice.