Unchained - Crypto Kidnappings and Physical Attacks Are on the Rise—Here’s How to Stay Safe - Ep. 775

Episode Date: January 31, 2025

The kidnapping of Ledger co-founder David Balland in France sent shockwaves through the crypto community, raising urgent questions about security for high-profile crypto holders. How do you protect yourself when criminals are willing to go beyond digital attacks and resort to violence? In this episode of Unchained, Jameson Lopp, co-founder and Chief Security Officer of Casa, speaks about the growing trend of “wrench attacks”—physical assaults aimed at forcing crypto holders to transfer their assets. Lopp explains how these attacks are evolving, what makes someone a target, and which geographies are seeing the most attacks. Plus, he shares what behaviors put you most at risk, how criminals are getting more organized, and why relying on exchanges for security is not as safe as you think.  If you hold significant crypto wealth, this is an episode you can’t afford to miss. Show highlights: 2:02 How a Ledger co-founder was kidnapped and how the situation was resolved 6:46 Who tends to be targeted and which geographies see the most physical attacks 14:15 The riskiest behaviors that are likely to lead to wrench attacks 16:01 How attackers decide who to target  20:37 How the attacks have been accelerating lately  22:16 How the Ledger team ensured the kidnappers couldn’t access the ransom money  23:44 Jameson’s top tips on how crypto holders can stay safe 29:30 News Recap Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Mantle Polkadot Quai Network Guest  Jameson Lopp, co-founder and Chief Security Officer of Casa Links Previous coverage of Unchained on crypto security: Here’s How to Protect Your Crypto and Seed Phrases From Natural Disasters Reuters: Kidnapped co-founder of French crypto firm Ledger had his hand mutilated Learn more about your ad choices. Visit megaphone.fm/adchoices

If you pop up on somebody's radar because you're engaging in risky activity, then you could live in a completely safe neighborhood. But if you're getting specifically targeted, especially by organized crime, you know, they're not going to necessarily care about that. They're going to do what they can to bypass as many safeguards as possible and get to you the high value target. Hi, everyone. Welcome to Unchained.

You're a no hype resource for all things. crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today we have one from EXP Christ on YouTube on the recent interview with A16 Z Crypto's Chris Dixon. EXP Christ writes, quote, every time you have Chris Dixon on, I'm excited, because he really does represent someone who is advocating for the success of technology protocols. I think he's right that the change of administration is truly a watershed moment for the entire crypto and AI industry. This administration is to technology forward thinking. It's time to build. To have your comment featured, write a review of the

podcast overall or leave a comment on our YouTube or X video. This is the January 31st, 2025 episode of Unchained. Mantle is building the future of on-chain finance. Experience its enhanced index fund, mantle banking, and MantleX. Visit group.mantle.xy to learn more. Pocod is the original and leading layer zero blockchain with over 2,000 plus developers. and the Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Join the community at PogoDot.network slash ecosystem slash community. Kwai Network, the first decentralized energy dollar with unprecedented scalability. By reinventing proof of work, Quai enables next generation defy and global commerce.

Learn more at QU.aI. Today's guest is Jameson Lopp, co-founder and chief security officer of Kasa. Welcome, Jameson. Hi, good to be here. The crypto world was shocked to hear about a crypto-related kidnapping in Veers in France of David Balland, a co-founder of Ledger. Although such attacks have been happening for a while in crypto, what caught more people's attention about this particular one is that the kidnappers cut off one of his fingers and sent it with their ransom to his associates. And you have been chronically in these types of attacks for years on a GitHub page. but I was curious just to hear your thoughts and reaction to hearing this particular story.

Yeah, I mean, there were a few unique aspects to this. For example, in this particular case, even though the victim himself is kind of an OG in the space, it seems like the attackers were not trying to extract money from him, but rather using him as a hostage to go up the food chain, so to speak, to one of the other OG players at Ledger. And I think this is the first time that we've heard of someone, you know, cutting off fingers as a part of ransom. But it is by no means the first time that we've heard of torture and other types of

mutilation that have been used in these type of attacks. But usually that is to try to extract money directly from the victim themselves. And so I wasn't aware. So they were trying to extract the ransom from. what, other Ledger co-founders? Yes, my understanding is that they basically sent a video or a photo of the finger to Eric, who was one of the other co-founders of Ledger, and that he was really the primary person that they were trying to get money from.

Okay, Eric Larcebeck, I guess. I don't speak French, but I'm guessing that's how you pronounce his last name. Yeah, I'm not sure. And explain how this particular incident got. resolved? Well, thankfully, the ledger team really jumped into action, and it seems like law enforcement in France is also quite responsive. So, you know, they started working with law enforcement immediately. We don't know many of the details of what happened, but somehow they were able to locate David, and then shortly after that locate his wife, who was at some other differently,

location. And as this was going on, I think it was like a one to two day long incident. They were dealing with the attackers. They were sending some partial ransom payments. And then they had a whole team of people behind the scenes that was working on the money aspect of things of basically trying to keep track of the money. And then as a result of those efforts, they were successful, I think, in freezing and seizing a large amount of the ransom payment. So, all in all, once this got wrapped up, I think it was a pretty big operation. It sounded like 10 people got arrested, and who knows if there still might be other people out there that were involved in the incident. But I think this is kind of showing that these type of attacks are

becoming more sophisticated, and they're becoming more organized. It's not just the random one-off guy trying to attack someone with a weapon, but we're seeing now. groups of people coming together and, you know, some people may specialize in certain things. And, you know, they're continuing to play this game of, you know, figuring out what is the return on investment for performing this type of attack. And so I think we should expect that these type of attacks are going to continue to be more sophisticated, especially against the well-known public figures who are either explicitly or implicitly expected to have many, many millions of dollars worth of crypto assets.

Yeah. And what was interesting, too, about this case involving David Balland is that he hadn't even worked at Ledger for four years or something. So, you know, it wasn't like he had a current role there. But, yeah, they used him to target, I guess, other executives who are currently there. you know, I got to, I got to give it to Dave or David because he updated his ex profile, like pretty much right after an all God, resolved saying kidnapping championship 2025 with like a trophy emoji. And then he wrote Ledra co-founder, Fingers 9 of 10, which definitely seemed cheeky and, you know, showed like a certain kind of resilience very shortly after what must have been a terrifying experience. So let's now talk about your GitHub page where you have been chronicling these types of attacks, which are also known as wrench attacks.

Why did you start doing that? Mainly because I'm a numbers nerd. I mean, I do all types of metrics and analytics. Track all types of different trends in this space. And I felt like this was an interesting trend because it's not like directly like a part of any blockchain or, you know, network metrics. This is more meat space metrics like real world adoption, but it's real world adoption by criminals attacking known people in this space. It was also, you know, it was somewhat self-serving because, A, I work in the security space, so I want people to have a better understanding of, you know, what is the actual risk and frequency of these type of attacks. and it was very personal because I myself am on the list.

I got swatted in 2017, and that turned into this whole multi-year ordeal of me trying to get justice for the attack against me. Yeah, I recall that incident. And yeah, I feel like you came on the show maybe and talked about it even. Quite possible. I've talked about it to so many people I've lost track. Right. Well, you know, as you've been chronicling this over time,

what trends have you noticed in these types of attacks in terms of where they're located or who they tend to target or, you know, you kind of already mentioned they are, it seems like they're getting more organized. Yeah. Now, I think one of the big caveats that kind of has to go along with this is the fact that there's absolutely no guarantees of accuracy in my archive due to the nature of how I get these stories. And it's basically mostly through word of mouth or Google alerts. So I think it likely vastly underreports the true number of attacks for several reasons. One of those is that I and really a lot of security professionals in the space are well aware that a lot of these attacks never get publicized because the victims don't want to talk to anybody,

even law enforcement, because they're afraid that that will make them an even bigger target and result in follow-up attacks. And there have been people who have had follow-up attacks in this space. So it is a legitimate concern. Also, I probably miss out on a lot of attacks that happen in non-English-speaking countries, unless an attack gets published by the media and that gets picked up and syndicated and somewhere translated into English, it's probably not going to make its way to me and into the archive. So, you know, we don't really know, for example, like how many attacks have been happening in Russia. You know, there have been a few, though I think it's been a few years. More recently, some of the trends that I've been seeing, there seem to be more attacks

happening in like the Thailand, Philippines, South Asia areas. I've been hearing some interesting trends where it seems like organized crime in China is targeting Chinese nationals that are like vacationing or living abroad somewhere else in Asia. And I've seen similar trends where it seems like organized crime in Russia is targeting Russian nationals who are living or visiting abroad. I'm not entirely sure why that's happening. Maybe it's, you know, they learn about the people because they're from that area. And then maybe they think for some reason it'll be safer for them to perpetrate the crime abroad and then go back to their nation. I don't know. I think it's just an interesting point to note. And, you know, we haven't had, I think, as many wrench attacks in places

that are considered safer, you know, whether that's like America, Europe, England, whatever. But then in the past month or so, there have been like four different attacks in France and right along the French border in Belgium. So I think it's hard to say that there's like, any specific place that's more dangerous than another. The main thing that I've been trying to tell people is that it's really, it's more about your personal risk profile than it is of like the nature of crime in your area because this is not a normal type of crime, right? This is a really fringe edge case, at least right now.

Hopefully it stays that way, but with the trends going the way they are, I doubt it will. And so essentially if you pop up on somebody's radar because you're engaging in risky activity, then you could live in a completely safe neighborhood. But if you're getting specifically targeted, especially by organized crime, you know, they're not going to necessarily care about that. They're going to do what they can to bypass as many safeguards as possible and get to you, the high value target. Yeah.

What you said about the data being incomplete, I definitely can say, for sure, there are more attacks than are reported. So, you know, people should should be aware of that. Yeah, this archive is a great resource, but it's just limited in its nature. So in a moment, we'll talk a little bit more about some of the factors that Jameson mentioned, but first a quick word from the sponsors who's make the show possible. Mantle is revolutionizing its on-chain financial hub. powered by a $4 billion treasury and proven products like Mantle Network and Emmeth Protocol. Mantle is launching three innovation pillars. Enhanced index fund for optimized crypto exposure,

Mantle Banking for blockchain-powered banking, and Mantle X for AI-driven innovation. Experience the future of finance with Mantle, and follow Mantle on X to stay tuned. Behold Kwai Network, born of Proof of Work, layer one to end the system's Merck. With energy and currency entwined, the first energy dollar is designed.

Decentralized, it stands both stable, strong. To scale commerce the globe sought so long. Unstoppable, it fuels the defy dream, where global trade and power cross the stream. Kauai carves paths for monetary change, a platform where these forces rearrange, sustainability and money blend. Discover how at QU.aI transcends. We have another listener comment. This one in response to Christics in talking about just how bad deep banking and crypto was, under the previous administration. On X, P.R. Murphy said, quote, it's not just debanking.

It's also excessive K.Y.C. at both banks and crypto exchanges. It took us six months to get approved at an exchange you've probably heard of. And debanking has become so normal, we always try to keep two spare corporate accounts. Massive time suck. Again, if you want to hear your comment featured on the show,

please write a review or leave a comment on an episode on YouTube or X. Back to make conversation with Jameson. One comment I want to make before I ask you my next question is just when you mentioned the Southeast Asia area, that is a center for the pig butchering scams. So I wonder if more people are like understanding crypto there. And that's maybe one of the reasons that there's been an uptick in these types of crimes in that area. So something that you mentioned was you said that you felt it's not so much about any particular geography or anything, but it's about somebody's personal risk profile. when you use those words, what exactly do you mean?

Well, you know, we have nearly 200 cataloged physical attacks at this point, which is starting to get to be enough of a data set that you can start to try to tease out some patterns. And there are definitely some patterns in terms of activity by the victim that I think people should be aware of because I think if you avoid those things, then you make yourself less likely to become a target. And some of those are engaging in face-to-face high-value OTC trades, which basically means buying or selling crypto assets for large amounts of cash. Regardless of which side of that transaction you're on,

if you're going physically to some location where you're meeting with someone that you don't trust with your life, then that's a big potential for them to basically, basically defraud you, right? They show up and they say, okay, you give me your stuff, and then they don't give you their side of the trade. And I've seen this seems to be happening a lot in both like the Middle East and in Thailand, I believe, where we're seeing people essentially meet up in hotel rooms. And then, you know, you go into the hotel room and you immediately get jumped and tied up and they take everything they can and run away. So don't do that. If you're going to engage in a transaction of that nature, you should do it somewhere that's

either highly secure or highly public, someplace that has lots of video surveillance, preferably physical security. It sounds kind of silly, but if I was going to engage in something like that, I would do it in a bank or in some sort of high security financial institution. Next biggest issue that seems to come up a lot is basically people flaunting their wealth. So in this case, it really is more the influencer types who are like the lifestyle influencers. And they're out on social media and they're spending lots of money, showing off spending lots of money, showing off watches, other types of goods that are high value and easily stolen. And if you're throwing crypto in the mix, you know, that just kind of makes it even more palatable.

You know, there have been a handful of what you might call like crypto influencers who have been hit. I actually just last week as a part of some of these French attacks, and I was looking into more French attacks, I realized that there was a French YouTube crypto influencer guy who had a home invasion like three years ago and just never heard about it until I started digging into these things more recently. I suspect that a number, or at least of the ones that I'm aware of, some of the undisclosed, unpublished attacks are against fairly big names, fairly influential people in the space.

But you don't have to be a big name. You can certainly be a nobody. And if you are in a data leak, for example, we believe we don't have like hard evidence, but we believe that at least a few of these attacks are the result. of data leaks from various crypto provider services over the years because some of those leaks had a lot of personal identifiable information, including home addresses for people. And how do you think it is that people, that attackers are deciding on their targets? Is it literally just what you said, they meet a stranger and the stranger agrees to meet them in some way that puts them at risk or their influencers where they're flaunting their wealth?

or, you know, aside from those that are somewhat obvious kind of risky behaviors, like how else do you feel like they're finding out about who they'd like to target? Yeah, I mean, I think a lot of it is what you would just call open source intelligence, which is, A, if people are voluntarily posting stuff on social media, that can get people's attention. That's how I got attacked was basically I was pissing people off during the Bitcoin block size wars in 2017 and the wrong person took something the wrong way and then they happened to know somebody who specialized in swatting people and they're like hey you should hit this guy and extort him

so um you know it can be somewhat random like that this is something that i try to get people to understand with regard to privacy is that you know the internet is a double-edged sword on one hand it's great because we now have essentially access to all of human knowledge at our fingertips instantly. The flip side is that when you start publishing information, you can go in a matter of minutes or hours from being a nobody, nobody's paying attention to you, to being somebody who may have the ire of millions of people drawn to them. And this, you know, this happens all the time on social media where one person just says the wrong thing that triggers people and that goes viral. And there can be real world consequences from that.

You know, people losing jobs, having folks like showing up at their house, getting swatted. It happens on a daily basis now on the Internet if you are a controversial person or even if you're usually not and you just say one thing that gets taken the wrong way and becomes controversial. It's, it can be a very fickle thing. You know, that's why I think you have to be very careful about what you're doing or saying and what you're putting out there because it can all be used against you. And oftentimes the information that you put out there is used against you in ways that you never really considered.

Yeah. Yeah, this isn't like necessarily a negative example, at least initially, but the Hoctua girl is a perfect example, where she was a nobody and she just said one thing and, you know, became. instantly famous. So crypto at this moment, as everybody in crypto is very much aware right now, it's just been put under the spotlight in a much bigger way than it ever has been. I mean, we literally just had the president give crypto a national priority status. And I wonder, do you feel like the attacks have been on an upswing because of that?

Yeah. I mean, they roughly are correlated with the price. and I will say specifically over the past month or two, it has been accelerating at a rate that we've never seen before. Now, of course, plenty of caveats there. Maybe more of the attacks are getting reported because the media is just getting more interested in crypto. Maybe there actually are more attacks happening.

And that's because, once again, the general public consciousness and understanding and interest in this space is increasing because more public people who have large audiences are talking about it. Therefore, more people are just thinking about it. And that kind of trickles down to the fact that sociopaths and criminally minded people then start thinking about it more. So, you know, in general, I'm optimistic about humanity in the sense that I think like most people are good people and they don't want to hurt others for their own gain. But I do work in the security space.

I've seen kind of the worst side of things. And there's some tiny fraction of people out there who just don't have the same ethics and morals as the rest of us. And they are willing to harm others for their own game. So let's talk a little bit more about the solution that they used in this ledger attack. They basically contacted a bunch of these different

like stable coin companies and things like that to freeze the funds. What do you think of that solution? I mean, it's not surprising. The vast majority of quote unquote stable coins are highly centralized and can be frozen and seized by their issuers. The main problem that usually you run into with that is just speed of being able to get the messages to the administrators fast enough to actually be able to stop it before it gets sent off to some either centralized or decentralized exchange where it's moved around. and transferred to other networks and fast early action is a very key aspect of being able to intervene in cases like that. You know, if you wait even a few hours or a day or two, then oftentimes the proceeds from crime has already been dispersed through so many different

networks and mixers and whatnot that it becomes very difficult to track. Yeah, I think that I read that while they were dealing with the kids, numbers, they were making calls frantically to have the solution in place so that way they could immediately freeze the funds at the exact right moment. So, of course, I'm sure you're aware that people listening to the show will want to know how they can limit these types of wrench attacks. So what would you recommend, especially for people who do want to maintain some sort of self-custody or, you know, maintain or adhere to some principles of decentralization? Yeah, well, I mean, the first thing, like I said, is just don't engage in high-risk activities, don't flunt your wealth.

Beyond that, especially if you're going into self-custody and thinking more about the technical aspects of security, you know, you want both good physical security and good digital security. And I've written about this extensively. If you're thinking about wrench attacks, you basically have to envision a scenario in which you are a single point of failure. You know, essentially your body, your mind, you're no longer under control of yourself. You have to assume you're under duress and that you will do whatever you are instructed to do. So from a purely technical perspective, the only way that you can then protect your assets against yourself is to actually have them spread out such that you cannot immediately directly access them. And this is where things like what we do at CASA with multi-signature, multi-key distributed wallet solutions comes into play.

And it gets really complicated because it's personal for everyone's situation and, you know, what physical places they have access to, you know, what friends or family they may trust enough to give one or two keys to. And it's something. that I think you either have to spend a ton of time researching and building for yourself or hire an expert like us and consider us basically a security consultant because we've done this thousands of times and we've seen basically every permutation of situation under the sun. So a lot of people out there are kind of bearish on self-custody.

They're like, oh, you can't protect against all of these things. And I'm like, well, it's possible. it's just not simple. You have to have a fairly high level of knowledge and understand all of the things that can go wrong so that you can architect a solution that will protect you from them. And we've had a number of successes in that case because I guess the short version of what we do is we architect solutions that eliminate single points of failure. And that includes you as a person. That includes us as a company and as a security service. Yeah, and just to make clear for people who feel like, oh, it's such a hassle and I would put myself at risk, I would just want to hire another company to, you know, manage my custody for me. You know, the reason why places like CASA exists is that especially early on in the crypto world, exchanges were hacked all the time and people lost so much money by entrusting the security of their assets to another exchange or just any other entity.

So, you know, there's risks that you have to weigh on both sides. Yeah, no, there's always risks. And, you know, we definitely hear a lot of people who say, well, I'm just going to, you know, leave all my money on reputable exchange X because they haven't had a major hack. And, you know, they have dozens or if not hundreds of employees who do nothing but specialize in the security for their platform. And, you know, that is a valid way of looking at it. but you also have to understand that even a lot of these reputable exchanges that haven't had

their primary wallets hacked and drained, individual account holders at those services get hacked and drained all of the time. Like there are still single points of failure all over the place. You could get hit by a sim swap. You could get hit by some sort of impersonator that has all your private information. You can get fished. And if they get into your email account, they can usually own basically all of your other accounts and drain everything of value. So, you know, just because you have it with a highly reputable service doesn't mean that you're still not in danger.

Like even if they're able to protect their cold storage, your account could still potentially get compromised and drained. Yeah. Yeah. There's definitely like a lot of research people should do to figure out kind of what tradeoffs, they're willing to make or, you know, what solution feels most comfortable for them. All right, Jameson, well, this has been a great conversation. Thank you so much for coming on Unchained. You bet.

It's an unfortunate topic to talk about, but I think the reality of it is that it's going to become more and more prevalent in the coming years. Yeah, yeah. Well, let's hope not, but people should definitely be wary. Don't forget, next step is the weekly news recap today presented by Wondercraft AI. Stick around for this week in crypto after this short break. Pocodot is the original and largest layer zero blockchain with over 2000 plus developers. The anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem.

Upgrading the infrastructure with 8 times higher transaction throughput and twice as fast block times, tailored court time for the needs of every protocol, trustless bridges to multiple chains, and revise tokenomics with a token burn to reduce inflation. Perfect for GameFi and DeFi to build, grow, and scale. Get your Web3 ideas to market. fast. Think big, build bigger with Pocodot. Join the community at Pocodot.network slash ecosystem slash community. Welcome to this week's crypto roundup. Today, we dive into DeepSeek's AI shaking markets, triggering tech and crypto selloffs. Trump-linked crypto moves, including a $2 million dollar move token

buy and the launch of truth.fi, make headlines. Elsewhere, FDIC's Travis Hill questions the crypto-debanking narrative and AI16Z Dow rebrands to Eliza OS amid its AI expansion. Venice AI's VV-V-V-Token launches at a $1.6 billion valuation, then faces insider trading scrutiny. On the regulatory front, Czech Central Bank eyes Bitcoin reserves, finance faces deeper fraud probes, and Q-coin exits the U.S. after a $297 million settlement. And in a twist, former SEC Chair Gary Gensler shifts from crypto crackdowns to AI research at MIT. Thanks for tuning in to the weekly news recap. Let's begin. DeepSeek's AI disrupts markets. Bitcoin's price fell below 100,000 on Monday as China's Deepseek

AI shook the financial landscape, rattling tech stocks and triggering widespread liquidations across the crypto market. The AI startup unveiled Deepseek R1, an open source model that claims to rival Open AI's most advanced systems at 98% lower costs. A revelation that sent shockwaves through big tech just ahead of major earnings reports. The NASDAQ dropped 3.5% as investors reacted to DeepSeek's potential to disrupt the AI economy, while Bitcoin's price slipped by percent to $99,600 amid broader risk-off sentiment. Markets have since recovered with Bitcoin trading around $105,000 as of Thursday. While AI-related tech stocks, including Nvidia and Tesla, saw declines,

crypto-a-I tokens were hit even harder. AI-based projects such as launchpads, agents, and meme tokens were among some of the worst performing categories in a 24-hour period on Monday. DeepSeek's open-source breakthrough also sparked debate over AI decentralization. Deepseek became the top mobile app on Apple's app store, surpassing OpenAI's chat GET, which some viewed as a shift in AI power dynamics. Jake Brookman, co-founder of venture firm Coin Fund, called Deepseek's success the biggest validation story of decentralized AI to date. He challenged the long-held belief that

Big Tech's GPU dominance would create an insurmountable advantage, adding, the cracks in OpenEi's traditionalist Web2 strategy are showing. Despite the sharp decline in AI-related crypto tokens, Matthew Graham of RISE questioned the sell-off's logic, invoking Jevin's paradox. The idea that greater efficiency can drive more adoption, not less. The barrier to entry for AI agents will trend to zero, just as it did with meme coins, he said, suggesting Deepseek's model could fuel further AI innovation rather than hinder it. Trump-launched Crypto project buys Move tokens. The price of Move, the native token for the Ethereum Layer 2 network movement,

surged nearly 20% on Tuesday after World Liberty Financial. A decentralized finance platform tied to U.S. President Donald Trump, purchased roughly $2 million worth of the asset. The transaction occurred just minutes before reports emerged that Movement's developers might be in discussions with Elon Musk's Department of Government Efficiency regarding blockchain integration. Blockchain records from Arkham Intelligence revealed that World Liberty Financial executed multiple transactions acquiring move tokens as prices climbed. The timing led some market watchers to speculate about possible insider buying.

Movement co-founder Rushi Manchi told Unchained in an interview that he couldn't confirm whether any discussions had taken place with the Doge team. He said he was, not in the loop with World Liberty Financial's decision to buy the tokens, and when asked to address the insider trading allegations, said, We make blockchain infrastructure, so I have no knowledge of anything that transpired. Trump Media expands into crypto finance. Following its recent blockchain-related activities, Trump Media and Technology Group has unveraged, truth.Fi, a financial services platform designed to integrate cryptocurrencies and exchange-traded

funds. The company, which also operates the social media platform, Truth Social, announced that its board has approved an investment of up to 250 million in digital assets, traditional investment vehicles, and crypto-related securities. Truth.Fi is a natural expansion of the truth social movement, said Trump Media CEO Devin Nunes in a press release. The investment strategy will be guided by asset management giant Charles Schwab, which will advise on Truth.offe's portfolio allocations and the development of separately managed accounts. With Truth. Dot fees launch, Trump continues his pro-cryptoprptune stance, a position that played a significant role in his campaign messaging.

FDIC's Travis Hill, skeptical of crypto-debanking conspiracy, while many in the crypto industry believe that Operation Chokepoint 2.0, the alleged systematic debanking of crypto firms ended with the new administration. Acting FDIC chairman Travis Hill remains unconvinced that such a scheme ever truly existed. In a Jandrutin speech that caught the industry's attention, Hill stated that the FDIC would not tolerate pressuring banks to deny services to law-abiding businesses. Sources familiar with his stance clarified to unchained that this was not confirmation of a past anti-cryptop conspiracy, but rather a stance against potential future discrimination.

Hill has acknowledged reports of crypto firms struggling to maintain banking relationships and considered evidence such as pause letters from the Coinbase lawsuit. However, he also weighs regulators' arguments that risk concerns, rather than bias, drove decisions. As Hill awaits a potential permanent appointment to the FDIC, the search for conclusive evidence continues. With Coinbase's chief legal officer, Paul Grual, telling unchained, It's going to come out. They can't hide forever. AI16Z rebrands as ElizOS following A16Z's request.

The decentralized autonomous organization, formerly known as AI 16C, has rebranded to Eliza OS, following a request from Venture Capital Giant and Dresen Horowitz. The move comes as AI-driven crypto projects continue gaining traction. Chris Dixon, managing partner at A16Z Crypto, clarified the firm's stance on the project in an episode. of Unchained, saying, we were not connected with AI16Z, we've asked them to change it. It was just creating a little bit of confusion. Eliza Labs founder Shaw Walters confirmed the rebrand in the project's discord, emphasizing

that the change would not affect the Dow's roadmap, governance, or tokenomics. The AI60D ticker will remain unchanged until the community votes on potential modifications. However, Walters didn't mention anything about a request from A16Z, which was a very much revealed in the podcast by Dixon and later confirmed to unchained via email. Initially launched on Solana in October, the AI integrated Dow has amassed a market capitalization of nearly 800 million. Venice AI's VV token launches amid insider trading probe. The newly launched VVV token from Venice AI made a splash on its first trading day, reaching a fully diluted valuation of $1.6 billion, just hours after going live on Ethereum's base network. Founded by Crypto-Events,

advocate Eric Vorhees, Venice AI provides privacy-focused access to AI models, including the Chinese Deepseek R1, which recently surged in popularity. Half of the 100 million VVV tokens were airdropped, with 25 million allocated to AI protocols on base, and another 25 million distributed among 100,000 early users of the Venice platform. Token holders can stake their VVV to access Venice AI's API services, creating an innovative crypto-AI bridge. However, the launch quickly faced controversy as Arodrome, a decentralized exchange on base, suspended two contributors over suspected insider trading. The exchange stated that internal monitoring flagged unusual trading activity within 30 minutes, prompting an investigation.

Aerodrome's swift response was acknowledged by Vorhees, who commented on X, really appreciate Aerodrome's transparency on this. They reached out and let us know when they found out. The investigation remains ongoing. Crypto-Eatf filing surge. The race for crypto-etefs intensified this week as CBOEBZX Exchange, Bitwise, and Tuttle Capital Management submitted new applications to the U.S. Securities and Exchange Commission. On Tuesday, Ciboy-BZX Exchange refiled 19B4 applications for four Solana ETFs. The Vanek-Salena Trust, Canary Salana Trust, Bitwise Solana ETF and 21 shares core Solana ETF. This marks a renewed push after previous applications were rejected

under SEC Chair Gary Gensler's administration. If accepted for review, the filings will enter a public comment period as part of the regulatory approval process. Meanwhile, BitWise asset management submitted an S-1 filing for a spot Dogecoin ETF, following its earlier registration of a Dogecoin Trust in Delaware. In a separate development, Tuttle Capital Management, applied for 10 leveraged crypto ETFs, including funds tied to meme coins, Trump,

Melania, and Bonk, as well as Link and Ada. Bloomberg ETF analyst James Seifart noted on X, this is a case of issuers testing the limits of what this SEC is going to allow. Czech Central Bank governor proposes Bitcoin as a reserve asset. In a potential first for a Western central bank, Czech National Bank Governor Alish Mikul has proposed investing a portion of the country's 140 billion in reserves into Bitcoin. Speaking to the Financial Times,

Mickle revealed that he will present the idea to the CNB's board on Thursday, suggesting that up to 5% of the reserves could eventually be allocated to Bitcoin if approved. Michael emphasized Bitcoin's growing institutional adoption, pointing to BlackRock's Bitcoin ETF launch and U.S. President Donald Trump's recent moves toward crypto-friendly policies, including the creation of a national digital asset stockpile. He acknowledged Bitcoin's extreme volatility, adding that Bitcoin's value could either skyrocket or collapse entirely, but defended the idea as part of a broader diversification strategy, stating, for the diversification of our assets, Bitcoin seems good. Miko remains confident,

suggesting that more central banks could follow suit in the next five years. In related news, the Utah House Committee has approved a bill to establish Bitcoin as a strategic reserve asset, positioning the state alongside Arizona in adopting Bitcoin for public funds. If passed by the Senate, Utah could invest, stake, and lend digital assets, further solidifying its crypto-friendly regulatory stance. French authorities expand Binance fraud investigation. French prosecutors have intensified their money laundering and tax fraud probe into crypto exchange Binance,

investigating alleged offenses committed in France and across the European Union from 2019 to 2024. according to Reuters. The inquiry, led by the Paris Public Prosecutor's Economic and Financial Crime Unit, follows complaints from users who claim they lost funds due to misleading information and Binance's alleged unauthorized trading activities before securing regulatory approval in 2022. Binance has denied all allegations, stating it will vigorously fight any charges. The investigation adds to the exchange's ongoing global legal challenges, including a $4.3 billion U.S. US settlement and the sentencing of its former CEO, Changping Zhao, to four months in prison

for violating anti-money laundering regulations. Q-Coin pleads guilty. Q-Coin, one of the world's largest cryptocurrency exchanges, has pleaded guilty to operating an unlicensed money-transmitting business and agreed to pay a $297 million settlement with the U.S. Department of Justice. The settlement includes a $1129 million criminal fine and $1,000. $184.5 million in forfeitures. The exchange, which served 1.5 million U.S. users, admitted to failing to implement anti-money laundering, AML, and know your customer measures, allowing billions of dollars

in suspicious transactions linked to dark net markets, ransomware, and fraud schemes. As part of the plea deal, Ku-coin will exit the U.S. market for at least two years, while co-founders Chun Michael Gann and Kierik Tang entered into deferred prosecution agreements. and will forfeit 2.7 million time for fun bits. After years of keeping crypto on a short leash, former SE chair Gary Gensler is headed back to MIT, but not to teach blockchain this time. Instead, he's taking his talents to artificial intelligence.

That's right. The same guy who made life miserable for crypto projects is now training the next generation of AI overlords. Gensler will co-lead MIT's FinTech AI at C-Sail initiative, working alongside academics and industry players, to explore AI's impact on finance. This marks a full circle moment for the former SEC chief, who once taught blockchain at Emmite,

then spent four years cracking down on it, and is now returning to teach something else entirely. Maybe he just got tired of telling people their tokens were securities. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchained crypto.substack.com, that is unchained crypto.substack.com and sign up for our free newsletter so that you can stay up to date.

with the latest in crypto. Unchanged is produced by Laura Shin with help from Matt Pilchard, Juan Aranovich, Megan Gavis, Pam Majumdar, and Margaret Curia. The weekly recap was written

by Juan Aranovich and edited by Kari McMahon. Thanks for listening.