News Block: Jobs Shock Rocks the Fed Debate, Metaplanet Under Fire and the $319M Bitcoin Hack on Liquid

**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.
Welcome to the Coin Stories News Block, powered exclusively by Ledn. Well, just when it looked like the Fed might finally have a reason to leave interest rates alone, the labor market threw another complication into the mix. The US added 162,000 jobs in August, almost three times what economists were expecting, while the unemployment rate stayed at 4.1 percent. So the labor market appears pretty resilient. And that matters because the Fed is trying to figure out whether inflation is cooling enough to stop raising interest rates. And after Friday's job report, markets pushed the probability of another September rate hike back towards 60 percent. I've got to highlight this tweet from Eric Weiss who said, quote, The idea that 162k jobs is somehow inflationary enough to justify higher rates is absurd. Only 59.1 percent of Americans 16 and older are employed. Labor force participation is just 61.6 percent. And millions who want jobs aren't even counted as unemployed. Meanwhile, Fed rates are already three and a half to 3.75 percent. So well said. And this week, we'll get the numbers that can really decide things. Producer price inflation comes out Thursday. Consumer inflation comes out Friday. And Friday's CPI report is pretty much the last major inflation reading before the Fed meets on September 15th and 16th. So if inflation comes in hot after a strong jobs report, another hike is much easier for the Fed to justify. But if inflation cools, the case for waiting gets stronger. All right, this was one of the biggest stories breaking in Bitcoin over the weekend. Nearly 4,000 Bitcoin worth roughly 319 million dollars moved out of the reserve backing Blockstream's Liquid Network. It happened on Sunday. Liquid is a Bitcoin side chain designed to let exchanges, institutions, and traders move Bitcoin more quickly and privately. Unlike Bitcoin itself, Liquid uses a federation of designated members to collectively manage the Bitcoin backing the network. And moving that Bitcoin is supposed to require approval from 11 of the network's 15 member companies. That is why this transaction immediately got attention. Liquid's federation holdings reportedly dropped from roughly 4200 Bitcoin to about 207 after the movement. But then things got even stranger. A transaction connected to the movement included an on-chain message from an unidentified party saying, We are White Hats. Contact us on-chain. Now, a White Hat hacker is someone who finds or exploits a vulnerability with the intention of disclosing or fixing it rather than stealing the funds. But right now, that's simply what the party behind the transaction is claiming. And of course, Blockstream responded. Blockstream has now confirmed a software bug, not stolen keys, allowed the withdrawal. And in a twist you could only see in Bitcoin, the two sides negotiated on the blockchain itself. And once the bug was fixed, the hacker sent back 3,400 Bitcoin, roughly $268 million, keeping about 600 as a self-claimed reward. Now, importantly, this is not a vulnerability in Bitcoin itself. Liquid is a separate federated network built on top of Bitcoin with a very different security model. So the bug gets fixed, most of the Bitcoin comes home and the hackers walk away with about $47 million. And that makes this one of the biggest Bitcoin native stories to watch heading into the week.
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Metaplanet is facing a wave of shareholder criticism right now over a compensation arrangement that dates back years before the company became one of the world's largest holders of Bitcoin. The arrangement involved stock options for some executives, the right to buy company stock later at a set price. What's unusual is that Metaplanet's old program was not a fixed size. Every time the company issued new shares, the option pool automatically grew too. Imagine executives have options for 10 million shares in a company with 100 million shares outstanding. If the company later doubles its share count to 200 million, those original 10 million shares would normally represent a much smaller percentage of the company. But Metaplanet's old formula could increase the number of shares behind the options too, which helped protect option holders from that dilution. That did not attract nearly as much attention a few years ago. Beginning in 2024, the company issued huge amounts of new stock to raise money and buy Bitcoin. But as the total share count increased, that old option pool increased too. And by this summer, Metaplanet said the potential share count behind those options had reached about 319 million shares. Most of those options belonged to a very small group of insiders. CEO Simon Gerovich holds roughly 60% of them with the rest held by two other executives and two employees. The exercise price is just 10 yen per share.