News Block #152: Bitcoin's Red Team Fights Back, the BIP-110 Moment of Truth Arrives, CLARITY Punted to September

**Natalie Brunell** (0:00)
Welcome to the Coin Stories News Block, powered exclusively by Ledn. I'm Natalie Brunell, and in about 10 minutes or less, I'll provide you with insightful updates on Bitcoin, financial markets and the global economy. Everything you need to know in one block. Let's go.
All right, let's start with the latest on the cold card hack, because while the numbers have gotten worse, the response from the Bitcoin community has been remarkable. Researchers now estimate roughly 1800 Bitcoins with over $116 million have been drained across multiple waves of attacks. But here's what should give every Bitcoiner a lot of hope. The highly technical volunteer group calling itself Bitcoin's Red Team, led by developer Kale and Rob Hamilton of Anchor Watch, who you heard on my emergency episode about the attack. Well, their mission has been to make sure nothing like this is hiding anywhere else in the ecosystem. So using cutting edge AI models and 16 researchers auditing hundreds of open source Bitcoin projects, they found nearly 5,000 security issues, including 85 critical vulnerabilities that they reported privately to the developers who maintain those projects, so that they can be fixed before attackers find them. The non-profit Opensats has been covering the computing and token costs. No computer ordered this, no government funded it, the community just did it. But the work isn't without major obstacles. Just this weekend, Rob shared that OpenAI's safety systems blocked him from continuing his analysis, even though he had completed their vetting process for security researchers months ago. His frustration was blunt. Attackers don't follow the rules, so restrictions like these only slow down the defenders. He says he's now forced to use Chinese open source AI models to continue protecting Bitcoin infrastructure. I really hope someone in Washington DC is paying attention.
Speaking of the community sorting things out, let's turn to a quick update on BIP 110
BIP 110's mandatory signaling period began Saturday, and it fell far short of the support it needed. 99.85 percent of Bitcoin's hash power remained with Bitcoin. A small minority chain briefly split off running the new rules and mined two blocks, but the main Bitcoin network immediately outpaced it. So Bitcoin's rules remained exactly where they were before the debate began. Whatever your view on the proposal, the outcome demonstrated something important about how Bitcoin works. Changing the rules requires overwhelming agreement across miners, node operators, developers and the broader economic community. That bar was not met with BIP 110, and that's the system working as designed. If you want to understand the perspective of those who supported the proposal, I sat down with Matt Cratter of Bitcoin University for a full conversation. It's streaming now, and I think hearing both sides of the debate matters, especially after months of so many people just talking past each other online.
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Let's turn now to strategy.
All right, now to the nation's capital where the Clarity Act, the bill that would finally establish a comprehensive federal framework for digital assets in the US did not get a vote before the Senate left for its August recess. Senate Majority Leader Thune confirmed the delay, blaming his Democrat colleagues for blocking it, saying, quote, we're getting that queued up first thing when we come back. The Senate returned September 14th, but the window is shrinking fast. The ethics provision, specifically whether senior government officials and their families should be restricted from profiting off digital assets remains unresolved. And prediction markets like Cal-Sheet now put the odds of the Clarity Act becoming law this year at just 15 percent, down from over 70 percent in May.
After nearly a decade of regulation through enforcement, Congress had a real opportunity to establish lasting rules. Whether they still can depends on what happens in September and whether midterm politics gets in the way. Michael Saylor had a great tweet about this development saying, Bitcoin doesn't need clarity. America needs clarity. Which brings us to Russia because the contrast couldn't be sharper. Russia just passed its first comprehensive crypto law and Putin signed it on August 4th. The law legalizes crypto trading through licensed exchanges under the Bank of Russia, but bans domestic payments in crypto entirely. So you can buy and sell Bitcoin in Russia now, but you can't spend it at a store. And there's another catch for ordinary citizens. Retail investors are capped at roughly $3,750 in annual crypto purchases. At that limit, a Russian citizen would need about 17 years to accumulate a single Bitcoin at current prices. But here's the part that tells you what this law is really about.