🚨 CRYPTO IS UNDER ATTACK — AND THE LOSSES ARE GETTING WORSE. Crypto security threats are no longer occasional headlines. September 2026 brought two major incidents that exposed serious weaknesses across the industry. 💸 Bitget — Approximately $387.5 million stolen. Attackers reportedly exploited compromised third-party security software and manipulated transaction data to push fraudulent withdrawals through the exchange’s systems. Source: Financial Times ₿ Liquid Network — Approximately $320 million affected. A software vulnerability allowed attackers to create unbacked L-BTC and exchange it for real Bitcoin. Around 85% of the withdrawn Bitcoin was subsequently returned. Source: Chainalysis These incidents show that the threat isn’t limited to stolen seed phrases. Attackers can exploit software vulnerabilities, compromised credentials, transaction authorization systems, smart contracts and user devices.

Blockchain Analysis and Secure Data Handling Blockchain analysis, combined with appropriate cybersecurity and encryption practices, can support the investigation and recovery process following cryptocurrency theft or loss. 1. Blockchain Traceability Public blockchains maintain permanent records of transactions, allowing investigators to follow the movement of digital assets between wallet addresses. Although blockchain addresses are generally pseudonymous, transaction histories can be analyzed to identify patterns, related addresses, exchanges, and other services associated with the movement of funds. 2. Forensic Blockchain Analysis Blockchain investigators can examine transaction hashes, wallet addresses, transaction timing, fund flows, and address relationships to reconstruct how stolen assets moved through the blockchain. Where appropriate, cluster analysis and other forensic techniques can help identify connections between addresses and potential points where funds entered centralized exchanges or other identifiable services. 3. Data Security and Encryption Encryption does not make public blockchain transactions private or directly enable the tracing of stolen cryptocurrency. Its role is to protect sensitive investigative and client information outside the blockchain itself. This can include case files, communications, identification documents, investigative reports, and other confidential data. Appropriate encryption and access controls help prevent unauthorized individuals from accessing or altering sensitive information during an investigation. 4. Secure Recovery Process The recovery process focuses on tracing the movement of assets, documenting the evidence, identifying relevant service providers or custodial platforms, and determining what legitimate recovery or legal avenues may be available. Recovery is not guaranteed, particularly when funds have been moved through mixers, bridges, privacy-enhancing services, or multiple chains.

In 2025, crypto thieves stole a record $3.4 billion. But the biggest myth in the industry is that once your crypto is stolen, it's gone forever. ⏳ In this episode of the Market Intelligence Council podcast, we unpack how stolen funds are actually recovered, an $800K hack story, AI deepfakes, and how global police connect directly to exchanges. 🎙️ Hosted by @JakubDziadkowie with: - Sol Cinosi – Chief Govt & Corporate Affairs Officer, @RecoverisTeam - Nick Pailthorpe – Global Director of Govt Relations, @KodexInc - @EvanLuthra – General Partner, @KOLCapital Watch the full episode here: youtube.com/watch?v=eQ5VKGYa…

The first post was the advisory and what users should do. This second post has the technical details: what actually went wrong, why our reviews missed it, the impact across Mk3/Mk4/Q/Mk5, and what we changed. blog.coinkite.com/entropy-te… ( current evaluating Mk3 firmware release )