Unchained - Is It a Good Idea for the US Government to Stockpile Bitcoin? - Ep. 683

Episode Date: August 2, 2024

In this episode, George Selgin, senior fellow at the Cato Institute, discusses the recent proposals by Donald Trump, Robert F. Kennedy Jr., and Senator Cynthia Lummis for the U.S. government to establish a strategic bitcoin reserve. George provides his insights into the differences between these proposals, their potential implications, and why he believes the government should not be investing in bitcoin or other assets. Show highlights: 00:00 Intro 01:16 How the Bitcoin proposals by Trump, RFK Jr., and Lummis differ 04:08 Why George believes that Trump’s proposal to not sell the government’s bitcoin is just symbolic  07:36 What the purpose of acquiring BTC is in the Lummis and RFK proposals 11:29 Whether the government should even be investing in bitcoin or other assets 18:53 How would the government buy BTC as per the Lummis bill 25:08 How likely is it that the bill passes through Congress 27:40 Crypto 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! iTrustCapital Polkadot Guest George Selgin, Senior Fellow and Director Emeritus of the Cato Institute's Center for Monetary and Financial Alternatives Links Trump’s proposal: Unchained:  At Bitcoin Conference, Trump Promises to Fire SEC Chair Gary Gensler If He Wins Trump Has Made Promises to Crypto Voters. If He’s Elected, What Could He Actually Do? Lummis proposal:  Unchained: A Bitcoin Strategic Reserve for the U.S.? Senator Cynthia Lummis Reveals Her Bill  Decrypt: There’s a Problem With Senator Lummis’ Bitcoin Reserve Plan, Cato Institute Expert Says  Lummis Introduces Strategic Bitcoin Reserve Legislation RFK. Jr proposal:  RFK Jr. Proposes 550 Daily Bitcoin Purchase Plan for U.S. Economy | Kennedy24 Learn more about your ad choices. Visit megaphone.fm/adchoices

I think if you think about the original motivation for Bitcoin, the philosophy behind it, if you like, the more the government has, and that's, again, not just the U.S. government, but governments in general, the less it's actually able to do the things that its founders wanted it to do. Hi, everyone. Welcome to Unchained, your no-hive resource for all things crypto. I'm your host, Laura Shin. author of The Cryptopians. I started covering crypto nine years ago and as a senior editor at Forbes was the first mainstream meter porter to cover cryptocurrency full-time. This is the August 2nd,

2024 episode of Unchained. With I Trust Capital, you can buy and sell crypto in a tax advantage retirement account. Enjoy significant tax advantages, 24-7 access, and the industry's lowest fees. Pocod is the original and leading layer zero blockchain with over 2,000 plus developers. And the PogoDOT 2.0 upgrade will be a massive accelerator for the ecosystem. Join the community at PogoDot.network slash ecosystem slash community. Today's guest is George Selgin, senior fellow at the Cato Institute. Welcome, George. It's nice to be here, Laura.

We're here to discuss some proposals for the U.S. government to establish a strategic Bitcoin Reserve. One of these was by a former president and Republican presidential nominee Donald Trump and another by Wyoming Senator Cynthia Lemmas. And the third presidential candidate, Robert F. Kennedy, Jr., also made a similar suggestion at the Bitcoin 2020 for a conference. I'm sure listeners have heard about this, but let's just make sure they understand the details. So in broadstrokes, can you describe what it is that these different speakers of the conference

proposed, in particular, Trump and Lemis? Sure. Yeah. Well, all of them are proposing a plan. that would have the government in some way invest in Bitcoin, which is novel, and for the United States anyway. And the plans differ among other things. They differ in the scale of the investment, where Trump's plan is the least ambitious, because it would mainly just have the government promise not to sell Bitcoin. It already possesses that it confiscated when it cracked down

on certain operations that use Bitcoin. And the others have the government making positive investments that is actually going out and buying Bitcoin, where the Lumas proposal would have it buy one million bitcoins. That's about something like $69,66 billion worth. and the Kennedy proposal will have it by 4 million Bitcoins. So do the math. Yeah, I actually did.

And so if you account for the fact that there's about 4 million Bitcoins that appear to be permanently lost, then yeah, that brings – and obviously not all of them have been mined. So that would bring the percentage then that the U.S. government owns of the Bitcoin supply to 25 percent for R of K's, proposal. Absolutely. It's a very big chunk of all Bitcoin. That's right. Yeah, not sure whether Bitcoiners, I think they were like excited by that, but I don't know if they had really done the math. But anyway. Some of them have. It's highly doubtful that the government could actually buy that money. It's highly doubt, even assuming that, you know, of course, assuming that they're that many still out there to be purchased. It's not clear that it's even possible. Because of course, as you know, a lot of bitcoinsers are hodlers. So if they are all, if they're enough hodlers,

there aren't four million that'll give up their coins. Yeah. And some of them we know own many more than a single one. So, well, let's start with the Trump proposal, because as you mentioned, that's the most conservative. Yes. You know, what do you think of that notion of the government keeping the Bitcoin that it has already seized? Well, if it literally keeps it forever, never sells it, which is what Trump has said he wants it to do, then this would be mostly a symbolic gesture. It would not be a question of taking advantage of any potential appreciation of Bitcoin, so it wouldn't have any fiscal repercussions one way or the other. So I see it as a gesture more than anything else. Now, there are other things that go along with what Trump said, along with the idea of just not selling the Bitcoin that the government has, including his suggestion that he would like to see all Bitcoin mined in the United States and otherwise have the United States become the Bitcoin place.

But the actual proposal to have the Bitcoin that the government possesses stay in the government is more symbolic than anything else. Of course, it has a real consequence because there is the alternative of selling off that Bitcoin and possibly realizing a profit that way. So Trump's proposal would be giving up any such potential advantage that possessing the Bitcoin has. But mostly it's a symbol, and I would like to point out, it's not a symbol of no significance. It's a symbol of Trump's desire to prove to the Bitcoin community to signal to them that he's a pro-Bitcoin guy. And that could have other implications for the policies of his administration. It could mean that they're otherwise more friendly to Bitcoin and cryptocurrency-related innovations than, say, the Biden administration's policies.

And, you know, some significant portion of that, is bitcoins that were seized from the people who were accused and convicted of hacking the Bitfinex exchange. That's right. Some of them came from that. And Silk Road was the source of most of the others. And so what do you think of kind of the, I guess, ethics of keeping that Bitcoin, particularly the Bitfinex hacked coins?

Well, I don't. The real ethical question has to do with whether they really ought to have seized these coins in the first place and how legitimate was that. Wait, though, you mean from the Bitfinex hackers? Yes. I mean, the question is whether the government should have taken possession of them rather than have those bitcoins go into some kind of conservatorship or receivership with an attempt to get them back. to the people that they belonged to. And so there are legal issues with the actual possession of the coins. But I think as far as holding on to the coins is concerned, then the main ethical question is, it's not so much an ethical question as a fiscal question.

Is this a good way for the government to use that resource that it possesses or should it sell some of them off? All right. So now let's actually just go a step beyond to the Lummis and RFK proposals where, you know, as you mentioned, they would like to actively obtain more Bitcoin. And as you mentioned, also Trump's proposal did not have a plan for realizing any gains on the Bitcoin. So what would be the purpose of the Lummus and RFK plans to obtain more Bitcoin? In the Lumas plan, it's pretty clear that what they're hoping to,

do is to use the proceeds, the profits from the Bitcoin that the government purchases to buy down the government's debt. So there's a gamble involved, of course. The gamble is Bitcoin's going to appreciate. If the government has a million bitcoins, you can use the profit from having invested in them to buy off more debt than it could have bought off simply using the resources that were already in its possession. So that is the logic of that proposal. Kennedy's proposal is not specifically one aimed at using Bitcoin for reducing the government debt.

He is treating Bitcoin as if it were a strategic asset in the way that oil and certain minerals and pharmaceutical supplies can be. That is, it's something that the United States needs to have a stockpile of just in case. I find these arguments very, very vague. I don't understand the sense in which the U.S. government can use Bitcoin other than as an investment asset. So I have to admit that I can't see much logic in Kennedy's proposal, quite a apart from the fact that the sheer number of Bitcoin involved in it doesn't really make much sense.

And I would say it especially doesn't make sense because even if the government could get hold of 4 million Bitcoin, it would defeat the original purpose of Bitcoin, which is to serve as a private exchange medium that people, individuals, can have as a way of getting around repressive government activities, including sanctions and other barriers to moving wealth around, and also a way to get around government snooping. Obviously, Bitcoin isn't doing any of those things if the government, any government, actually possesses it. And so I think if you think about the original motivation for Bitcoin, the philosophy behind

it, if you like, the more the government has. and that's, again, not just the U.S. government, but governments in general, the less it's actually able to do the things that its founders wanted it to do. Yeah, yeah, totally take your point there. So in a moment, we're going to talk more about Senator Lumis's bill because that is probably the one that has any chance of actually coming to fruition. But first, a quick word from the sponsors who make this show possible. Did you know you can buy and sell crypto with tax benefits in a

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So for Senator Lummis' bill, where she is proposing that the government obtain this Bitcoin, she would like for the government to hold it for at least 20 years and then dispose of it only for the purpose of paying off federal debt. So what do you think of that idea? Well, as I said before, it's a gamble. It's a gamble. It depends on Bitcoin going up in price, of course. If Bitcoin does appreciate, then it will be the case that in 20 years, the government will have more resources, and it can use those resources for all kinds of things.

But one of the things it can do is pay off more debt than it would have been able to otherwise. But there's a real question here. There are two questions, really. One is, should the government be taking what is a risk by betting on Bitcoin going up in price in the coming 20 years? That is a risky decision. And related to that question, of course, is the question, is there anything else, if the government is going to take a risk? Is this the best thing it could buy or should it buy something else? Or should it just get more gold or just stick with the gold that it has?

So these are investment questions, right? We're talking about the government making an investment and hoping that the investment will be a good one. And at bottom, of course, we have to ask whether governments should really be doing that sort of thing at all, or whether they should just be sticking to dollar assets that, of course, are risk-free from their point of view, and holding only those assets that they need for ordinary operational purchases. And do you have an opinion on that? I sort of do. I think they should stick to the business of,

just keeping assets on hand that they need to run the government, and that getting involved in risky investments is probably generally not something we want governments to do. Governments are not generally particularly good investors. I think that's fair to say. And part of the reason for that is that they don't bear the costs, that the individuals involved don't bear the costs from bad investment decisions. way you and I do, and if we make an investment decision and it turns out to be a bad one, nobody bears the costs other than ourselves. Whereas if the government gets into the business of

gambling on various investments, of course, all citizens bear part of that burden, whether they wanted anything to do with it or not. So part of me believes that generally speaking, this isn't something that government should be doing. But out of curiosity, because the government has about 8,100 metric tons of gold, which is about worth $500 billion roughly. So they already do this. There are two different, there are two different issues here, and it's important to keep them separate. It's true, the government has been sitting on all these thousands of tons of gold for many, many years. And it isn't doing the government any good. Officially, it hasn't revalued the gold, although the gold is now worth much more than the official value at which it keeps it on its books.

And I am very sympathetic to the idea of taking advantage of the government's taking advantage of the appreciation of this gold somehow. The most straightforward way for the government to do that, would be to sell the stuff, just sell it, realize the big gains, and use the proceeds to pay off the debt, among other possible uses. The Bitcoin angle, in theory, if things work out well, could allow the government to buy off more debt than what it could buy with its existing gold and the appreciation thereof. But the difference is that the Bitcoin investment entails some extra risk. It's conceivable that Bitcoin could go down in price in 20 years. It's certainly conceivable. I'm not speculating that it will, but there is a risk involved.

Okay. Yeah, but broadly, it's not totally beyond the scope of what governments or the U.S. government does in terms of just like having reserves of other assets in a way like having. You know, the U.S. government has reserves of all kinds of things. The question, we have to be very careful here, though, and note that it's doubtful whether they should have all the reserves that they already have. As I was saying, they have all these tons of gold, but there's no reason for the government to have held on to all that gold for all this time. They have huge reserves of cheese. There's no reason except, of course, to prop up the price of cheese for the sake of the dairy industry. They've had large stores of various kinds of coins.

I mean, real coins, not bitcoins. Warehouse is full of coins that nobody wants. And the zinc lobby, among other metal lobbies, have been very, inclined to encourage the government to mint coins nobody wants and then store them finally to pick another example that's got some relation to bitcoin and sounds a little bit like it for many years the government piled up tons of silver even though it served no it didn't have any monetary purpose less so even than gold after 1934 certainly but that's when they started buying it and stocking it up and they're still getting rid of the silver that they accumulated for many decades.

So just because the government has strategic reserves of all kinds of stuff doesn't mean it's a good idea for it to have a strategic reserve of some other stuff. The question is, which of these reserves are really necessary and proper? And which of them really are reserves that the government should never have accumulated at all? But I want to say that in Bitcoin's case, the one sense in which I'm really sympathetic is I do like to see the government signaling that it's not going to be hostile to Bitcoin. Somewhere between the hostility towards crypto that we've seen from the Biden administration and having the government buy up and hold on to oodles of Bitcoin, there's a reason. policy that's friendly to Bitcoin, but isn't gambling with the public's money. Okay. Well, but actually, so I did also then want to dive into how Senator Lumas proposes

obtaining this Bitcoin. There's at least the way I'm reading it, three different ways that she proposes financing this. Can you describe those? I'm only aware of two. One is one would use some of the capital of the Fed to have it to invest in Bitcoin. It would run down its capital, which is pretty slim to begin with, by essentially acquiring, creating money to to buy Bitcoin itself. Yeah, and that one I think is actually broken out into the two where they would reduce the discretionary surplus funds. But then also, yeah, any surplus of the net earnings would be used to purchase. Which together constitute both of them capital.

So those are the, those both fall into the category I was talking about. And the other is, of course, to use the appreciation of the Treasury's gold, make it official. That is, recognize some of the extra value that is presently not recognized. create gold certificates representing that appreciation or $65 billion worth of it, enough to buy a million Bitcoin. Then this is where it gets a little bit complicated. The Treasury would give that value of gold certificates to the Fed. The Fed would in turn credit the Treasury's account with it by the same value,

the value of the certificates. So the Fed's nominal assets would go up and the Treasury's account balance would go up by an amount sufficient to buy a million Bitcoin. The Treasury then, of course, would use its balance, that extra money to go out and buy the Bitcoin. And at that point, of course, the balance will go down. Eventually, whoever sells the Bitcoin, that money will still end up in the bank. system, right? So you'll end up with a situation where the Fed has 65, 67 billion dollars worth of certificates. Bank reserves end up going up the same amount. The balance sheet is therefore that much bigger all around. And the treasury has got itself some Bitcoin, a million. And

incidentally, it still has all the gold that had before. Notice it hasn't actually parted with any gold. So that's how that works. And if the Bitcoin goes up in value, that's great. The same operations could be used where the Treasury creates the certificates and all that and buys something other than Bitcoin or uses the funds directly to reduce the debt. But buying Bitcoin makes sense relative to some other possibilities if Bitcoin's going to appreciate and appreciate more than anything else the government could pile up. It could buy more cheese, for example. Yeah, I don't know if that would be a great idea. I tell you, between cheese and Bitcoin, I say go for the Bitcoin. Definitely. Yeah.

But so just to clarify, then, it actually wouldn't. technically really be using taxpayer money directly. It would indirectly, I guess, maybe you could say. Well, anytime the government spends on anything, those are public funds. There's no such thing as the government's money, right? Any resource it comes up with, including if it comes up with it, by revaluing its existing assets like gold. That's still public money. It's our money, if you like. I still file taxes in the U.S.

And so it is public monies. So buying Bitcoin under this plan, even though it's a very clever plan, and it certainly doesn't require the Treasury to tax us more or to borrow more, is still a use of public money. So we can still ask, is this a good use of that money? Right, right.

And you're probably leaning more against the idea that it is a good use. I'm generally skeptical of the idea of the government placing bets and in markets. And they're acquiring assets only because it thinks they're going to go up in value the way an investor might think. Because I don't think governments should be in the investment business. I don't think they should be acting as if they are big mutual funds on behalf of their citizens. I think they should stick to having the assets they need to do their basic job, including operating assets, financial assets,

which would mostly be dollars of various kinds. But I am sympathetic to the government in various ways, in small ways, perhaps, signaling that it is no longer hostile to cryptocurrency. And to be fair, since the pendulum, in my opinion, has swung a little bit pretty far in the hostility direction, if a proposal like Senator Loemises has it swinging a little bit too far in the other direction, well, maybe in the end it'll settle in a good place. And so to that extent, I'll say I'm sympathetic to the proposal, given the context in which it is being made. Right. That makes sense.

And last quick question, and I'm not sure if you have an awareness of this. because I understand your position is more research, but do you have any sense of how likely it is that this proposal will get through Congress? No, I don't. And I don't partly because I have no the savvy, special savvy when it comes to political prognostication. But what I will say is we've certainly seen recently

a lot of evidence that there are a lot of people out there who are bullish on Bitcoin and who are willing to support ideas like Senator Lemises. And I think that the more such people, the more evidence that there are a lot of such people out there, the more politicians are going to be willing to get on board because they too have a reason to want to show that they're not hostile to the cryptocurrency and, community and the Bitcoin community in general, that they may make political hate by showing their support through support of one of these proposals, one or more. So it could happen. I don't think it's, I do not think this legislation is by any means something that should

be written off as pie in the sky or hopeless or politically naive. I don't think it's any of those things. All right. Well, thank you so much for explaining all of this on Unchained. Not at all. I'm very happy to do so. Don't forget. Next up is the weekly news recap.

Today, presented by Wondercraft AI. Stick around for this week in crypto after this short break. Pocod is the original and largest layer zero blockchain with over 2,000 plus developers. The anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Upgrading the infrastructure with eight 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 Pocod. Join the community at Pocodot.network slash ecosystem slash community. Welcome to this week's crypto roundup. In today's recap, we cover. tether's record-breaking profits, a lawsuit by artists seeking NFT regulatory clarity, pump dot funds, impressive revenue, and the California DMV's blockchain initiative. We also discuss fraud charges against BitClout's founder, Doe Kwan's extradition decision,

Mount Cox's Bitcoin transfers, a governance dispute in the compound protocol, a $4 million exploit on the Terra blockchain, and Trump's limited edition Bitcoin sneakers. Thanks for tuning in to the weekly news recap. Let's begin. Tether Records 5.2 billion profit in first half of 2024. Tether, the issuer of Stablecoin USDT, announced on Wednesday a net profit of $5.2 billion for the first half of 2024 as part of its second quarter financial attestation conducted by BDO, an independent accounting firm. The report confirms the accuracy of Tether's financial statements and reserves. In the second quarter, Tether recorded a net operating profit of $1.3 billion.

The company's reserves included $97.6 billion in U.S. Treasuries, placing it 18th among global holders of U.S. debt, ahead even of countries such as Germany and Australia. As of June 30, 2024, Tether's consolidated net equity reached nearly $12 billion. The company faced a $653 million unrealized loss due to falling Bitcoin prices. partially offset by a $165 million gain in gold investments. The second quarter also saw Tether issue over $8.3 billion in USDT. The company maintains substantial reserves and a consistent revenue base from traditional asset investments.

Meanwhile, CoinDesk reported that Tether's main competitor circle, the issuer of Stablecoin USDC, has a valuation of around $5 billion in the secondary market ahead of its planned IPO, down from a $9 billion valuation in 2022. Artists file lawsuit over NFT regulatory clarity. Artist Jonathan Mann and Brian Fry filed a lawsuit against the SEC on Monday, seeking clarity on whether NFTs are considered securities. The lawsuit aims to prevent costly legal battles and fines for digital artists who use blockchain technology. Mann and Fry argue that NFTs, which can include visual art, music, and videos,

should not be classified as securities simply because they exist on a blockchain. Mann criticized SEC Chair Gary Gensler's stance, saying it's ludicrous to consider blockchain-based art as securities. The lawsuit also references past SEC actions, such as cases against impact theory and stoner cats, in which NFT projects were deemed unregistered securities. The artists hope their legal action will push the SEC to provide clear guidelines for the digital art industry. Attorney Jason Gottlieb emphasized that art is a reflection of human creativity, protected by the First Amendment, and should not be burdened by securities regulations. Pump. Dot Fund generates record 25.6 million in July revenue. Pump.combe, a Solana-based token launchpad for meme coins, reported a record $25.6 million in revenue for July, up 16% from June.

The platform, launched in February 2024, has seen consistent. growth driven by the popularity of fair-launched meme coins that avoid pre-sales and team allocations. In July, the launch of Nero, inspired by the new Shiba Inu, adopted by the owner of Doja's Kobosu, contributed significantly to the revenue spike. Nero quickly reached a market cap of $33.5 million. Pumpdot funds cumulative revenue now stands at $77.8 million, with projections suggesting it could reach $336 million by year end, highlighting the ongoing demand for meme coin creation services. California DMV digitizes 42 million car titles on blockchain.

California's Department of Motor Vehicles has digitized 42 million car titles using the Avalanche blockchain network to streamline the title transfer process and reduce fraud. Developed in partnership with Ox Head Alpha, this new system allows vehicle titles to be transferred in minutes via a mobile app, eliminating the need for in-person visits. The digitization initiative aims to enhance efficiency and security, creating a transparent and tamper-proof record of vehicle ownership. John Wu, president of Ava Labs, highlighted the benefits in a blog post stating, blockchain's maximize efficiency, maintain compliance, and protect consumer data. This project represents one of the first steps in California's broader plan to integrate

blockchain technology into government operations, promoting automation and improved public services. BitClout founder faces fraud and securities charges. Nader Al-Naji, founder of the crypto-social media platform BitClout, was charged with wire fraud and selling unregistered securities by the U.S. Securities and Exchange Commission and the Department of Justice. Arrested on Saturday, Al-Nagy, also known on social media as Diamond Hands, allegedly raised. $257 million from BitCloud's token sales and misappropriated $7 million for personal expenses, including renting a Beverly Hills mansion. The SEC's complaint highlights Al-Naji's attempts to disguise BitClout as a decentralized project in order to evade regulations. His family members

are also named in the lawsuit for receiving investor funds. If convicted, Al-Naji faces up to 20 years in prison for wire fraud. Doe Kwan said to be extradited to South Korea. Montenegro's Court of Appeals has confirmed an earlier ruling from a lower court saying that Terraform Labs co-founder Doe Kwan should be extradited to South Korea instead of the U.S. Kwan has been in custody in Montenegro since March 2023 after being arrested for trying to use a fake passport to fly to Dubai. After South Korea submitted its extradition request to try Kwan for his role in the $40 billion collapse of the Terra Luna ecosystem in May 2022, the U.S. followed with a similar request. Kwan's extradition now awaits final approval from Montenegro's Minister of Justice. No extradition date has been set.

Mount Gox transfers $2.2 billion in Bitcoin to new wallet. The bankrupt crypto exchange Mount Gox has transferred 33,960 BTC, worth about $2.2.2 billion to a new wallet, according to Arkham. Arkham suggests that the new wallet likely belongs to BitGo. one of the five exchanges collaborating with the Mount Gox trustee to repay creditors. In July, the Mount Cox trustee initiated repayments to 17,000 creditors in Bitcoin and Bitcoin cash, with distributions occurring on July 5th, 1624, and 31 via Cracken, BitStamp, SBIVC trade, BitBank, and BitGo. Compound goes through governance dispute.

The compound lending protocol went on a roller-camping. coaster ride this week. The issues began when a whale known as Humpy and a group of comp holders called the Golden Boys proposed creating a yield-bearing protocol called Gold Comp. The proposal faced significant opposition, however, due to concerns over vote manipulation and centralization. Instead of proceeding with Gold Comp, Humpty and the Golden Boys agreed to a counter-proposal to develop a new staking product that would distribute 30% of existing and new market reserves annually to staked comp holders with control maintained by the compound Dow. The counter-proposal addresses concerns about excessive control by Humpey and the Golden Boys.

Humpey subsequently agreed to withdraw Proposal 289, which had narrowly passed and would have allocated $24 million in comp tokens to gold comp. The resolution, endorsed by key stakeholders like Wintermute and Open Zeppelin, has restored market confidence, with comp prices rising by 5% after falling significantly when the Humpty and the Golden Boys first made their proposal. Terra blockchain halted after $4 million token theft exploit. The Terra blockchain was halted for approximately four hours on Tuesday due to an exploit that resulted in the theft of tokens valued at around $4 million.

The attacker exploited a known vulnerability in the IBC Hooks module, which allows cross-chain token transfers and contract calls. The Terra team announced the halt on X, stating that block production would resume only after validators deployed an emergency patch, which was deployed three hours later. Security firm Bayosin reported that the attacker stole 60 million Astro, 3.5 million USDC, 500,000 USDT, and 2.7 BTC. The Astro tokens value plummeted by 55% following the exploit. Terra developers missed including the IBC Hooks patch in a recent upgrade, which led to the breach. The blockchain resumed operations after implementing the emergency fix. Time for fun bits. Trump's Bitcoin sneakers are the latest craze. In a true Trump fashion twist, a website linked to

Donald Trump has released limited edition Bitcoin-themed sneakers. The bright orange high tops, priced at $500, sold out instantly and are now popping up on eBay for up to $2,500. Who knew crypto could be so stylish? The shoes are marketed as celebrating the future of finance as well as Trump's leadership, making them a must-have for Bitcoin fans and Trump enthusiasts alike. And if high tops aren't your thing, you can still snag a pair of orange or black low tops for $299. The launch came right after Trump's speech at the 2024 Bitcoin conference in Nashville, where the former president promised to support Bitcoin if elected. Now fans can show their support with every step.

Just be careful not to trip over the price. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to UnchangedCrypto.substack.com that is UnchangedCripto.com and sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin,

with help from Matt Pilchard, Juan Aronovich, Megan Gavis, Pam Majumdar, and Margaret Korea. The weekly recap was written by Juan Aronovich and edited by Nelson Wang. Thanks for listening. Unchained is now a part of the Coin Desk Podcast Network. For the latest in digital assets, check out markets daily five days a week with host Noel Atchison. Follow the Coin Desk Podcast Network for some of the best shows in crypto.