Not Your Hardware Wallet, Not Your Keys

··6 min read
Crypto/Web3DeFiRegulation
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AI Summary

This newsletter covers the growing Ledger hardware wallet compromise linked to CryptoBilis reseller, with over $93M in losses and Tether freezing $10M of stolen funds. Other key stories include Papertrade traders losing $32.4M, ESMA's stablecoin wind-down deadline for MiCA firms, Citi's stablecoin checkout plans, and Robinhood reporting $15B in Stock Token DEX volume.

Key Facts

✓Ledger hardware wallets sold by CryptoBilis were found with spy implants, causing $93M+ in losses, and Tether froze $10M of stolen funds.
✓Papertrade traders lost $32.4M in two days after its HyperEVM perps launch, making it DefiLlama's top revenue earner for Oct. 11.
✓ESMA ordered MiCA firms to wind down noncompliant stablecoins by Jan. 8, 2027, which could force EU USDT holders to move or convert.

Author Takes

Skeptical

Self-custody limitations

Self-custody is now narrow: buy direct, generate visible entropy, and split keys across vendors via multisig, but even then the only partial recovery came from Tether's blacklist, not self-custody itself.

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