This Week in Crypto (July 27–August 3): $88.6M Swept From Cold Wallets, BIP-110 Runs Out of Road, and Three Fed Dissents Point Up

The defining crypto story this week involved no hack in the ordinary sense — no breached network, no exploited contract, no device anyone touched. It was a random number generator that wasn't random enough, shipped in 2021 and cashed in on July 30 for 1,082 BTC in forty-one minutes. Around it: a soft fork that ran out of miners, a Fed that split three ways toward a hike, and an options book that quietly bought insurance for August. Here's the week, story by story.

The week at a glance

A $88.6 million cold wallet failure that never touched a device

The largest self-custody loss of the year came from bad entropy, not a breach. In a 41-minute window on July 30, an attacker swept 1,082.65 BTC — roughly $70.2 million — out of 1,196 Bitcoin addresses; by August 2, Galaxy Research had tracked three waves totalling 1,367 BTC, about $88.6 million, from 4,585 addresses.

On X: @glxyresearch — Galaxy's initial mapping: 1,196 addresses drained in a 41-minute window, every sweep carrying an identical 30.0 sat/vB fee, a 30–75x overpay against that week's median.

The cause dates to a March 2021 firmware error. On affected Coldcard devices, seed generation was routed away from the chip's hardware random number generator onto a software substitute seeded from the serial number and clock registers. That left roughly 40 bits of entropy on older models and about 72 on newer ones, against the 128 promised — around four billion possibilities, few enough to enumerate offline and check against the public chain.

On X: @nvk — Coinkite CEO Rodolfo Novak took "full accountability for the firmware bug" and suspects the flaw was found with AI assistance.

Patched firmware shipped for every affected model, but it fixes future seeds only — it does not repair one already in use, and no self-test exists to check whether a given seed sits in the reproducible range. We'd suggest treating affected-firmware seeds as exposed and migrating; our documentation covers creating a new multi-chain wallet, which generates seeds on-device. The market reaction inverted the post-FTX playbook: small holders sent coins to exchanges, with 7,300 BTC of sub-10-BTC deposits on July 31, the highest since February 6.

BIP-110 ran out of miners before it ran out of clock

Bitcoin's contested soft fork reached its deadline at roughly 2.5% support against a 55% requirement. BIP-110, aimed at Ordinals inscriptions and BRC-20 tokens, needed 1,109 of 2,016 blocks per retarget period — already far below the 95% used in past soft forks.

Signaling never got close: 0.31% of hashrate in late June, near 2.5% by late July, and 0.00% at points on the project's own monitor. Ocean mined the first signaling block in March and no major pool followed. The mandatory signaling window was projected at block 961,632, around August 7–9.

On X: @saylor — Michael Saylor's block-960,561 count: 24 signals in 946 blocks, every one from a DATUM miner via Ocean, making the threshold "mathematically unreachable this period."

BeInCrypto reported this week that developers called the activation off, blaming the Coldcard fallout. That is worth flagging as single-sourced: as of August 3, bip110.org still displays the original timeline, and CryptoBriefing notes no official withdrawal has been declared. Treat the fork as dead on arithmetic; treat the cancellation as unconfirmed.

The Fed held 9-3, and all three dissents pointed at a hike

The July 28–29 FOMC delivered an expected hold and an unexpected split. The committee voted 9-3 to keep the target range at 3.50%–3.75%, a fifth consecutive hold — but Hammack, Kashkari and Logan all dissented in favor of a 25-basis-point increase, the first three-way same-direction dissent since September 2016.

Chair Kevin Warsh again withheld forward guidance and characterized the divide with a line that travelled: "I asked for a good family fight, and I got one."

On X: @LaMonicaBuzz — "9-3 vote. Hammack, Kashkari and Logan voted for a quarter-point rate hike."

Crypto's response was a brief bounce and then a fade. BTC sat at $64,176 at the announcement and closed the session at $63,620, down 1.5%; ETH fell 1.63% to $1,882. Bitcoin still finished July near $63,000, up 8.9% on the month. The next FOMC lands September 15–16, which makes Warsh's Jackson Hole appearance on August 27–29 the nearer catalyst.

Positioning turned bearish for August: a record-low ETF month and a $1.17B put

Two measures of institutional appetite pointed the same way. Spot Bitcoin ETFs took in $205 million across July — the lowest monthly total on record, though an improvement in sign on May's $2.43 billion and June's $4.52 billion of outflows. Ether ETFs actually pulled more, at $342.85 million.

The options book is the sharper signal. The bullish $70,000 and $72,000 calls that dominated into the Fed meeting were closed at Friday's expiry, and protection replaced them:

Seasonality explains the caution. Since 2013, July's median return is +8.61% and August's is −7.51% — the only month with a negative median in Bitcoin's history. BTC traded near $63,033 at the week's close, with Marex pointing at the 200-week moving average around $63,300 as the level that decides the tape.

The SEC's Plan B: rules if Congress won't legislate

With the CLARITY Act stalling, the regulator said out loud that it has a fallback. In a July 27 CNBC interview, SEC Chair Paul Atkins said the agency is "ready, willing and able to come out with rules that address the same issues in clarity," while framing it as second-best to a statute.

On X: @SECPaulSAtkins — the chair's own July 28 post, "committed to supporting Congress in advancing the CLARITY Act, including providing technical assistance."

The machinery exists: Project Crypto produced a Regulation Crypto package on the SEC's 2026 agenda covering token registration exemptions, a decentralization safe harbor, and broker-dealer custody. The limitation is the one Atkins named himself — the March guidance classifying 16 tokens as digital commodities is administrative, and reversible without a congressional vote.

The bill meanwhile lost ground. The Senate shelved it for Russia sanctions and nominees, August 7 is the last scheduled workday before recess, and Polymarket odds on 2026 passage fell to roughly 48% from 74% a month earlier.

Also this week

• Shopify added Arbitrum to its USDC checkout on July 30. Shopify Payments now accepts the dollar-pegged stablecoin across five networks, reachable from 480+ wallets, with no gas charged to the buyer.
• The SEC opened the door to yield-bearing Bitcoin ETFs, approving a Cboe BZX rule change permitting a 15% NAV buffer for non-eligible assets — the precondition for covered-call and buffer products.
• H1 2026 set a record for the number of crypto hacks while losses fell. TRM Labs counted more incidents than any prior half-year, with losses of $972 million against $2.3 billion in H1 2025; North Korea-linked groups accounted for roughly 66%.
• Two more distribution channels opened, with Morgan Stanley launching Ethereum and Solana ETPs and E*TRADE adding spot BTC, ETH and SOL trading — in the same week ETF flows hit a record low.

What to watch next

Three dates carry the next fortnight: August 7, the Senate's last scheduled workday before recess and the practical deadline for CLARITY; the August 7–9 BIP-110 signaling window; and August 27–29 at Jackson Hole, where Warsh speaks into a committee that just dissented three ways toward a hike. For readers reassessing where their coins sit after this week, Coin98 Super Wallet generates seeds on-device and supports self-custody across 100+ blockchains.

Last updated: August 2026