The Daily: 'White-hat' hackers return most of the $320M they took from Liquid, and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.

Happy Monday! Bitcoin is still trading near $80,000 despite renewed Fed rate hike fears, with this week's U.S. inflation data set to provide the next major test.

In today's newsletter, Liquid Network pauses after a 4,000 BTC purported "white-hat" incident, Hanwha develops a tokenized securities platform on Avalanche, bitcoin ETFs attract nearly $1 billion in weekly inflows, and more.

Meanwhile, Hunter Biden teased a "LAPTOP" project for Sept. 9, appearing to confirm a Wall Street Journal report that he plans to launch a memecoin on Base this week.

P.S. Don't forget to check out today's reader poll on CPI later in the newsletter.

Liquid Network pauses after purported 'white-hat' hackers withdraw $320 million in bitcoin

Liquid Network paused its Bitcoin sidechain after purported white-hat hackers withdrew roughly 4,000 BTC, worth about $320 million, from its federation wallet.

• The withdrawal drained around 95% of Liquid's reported bitcoin reserves, which stood at about 4,200 BTC before the incident.
• An onchain message tied to the transaction read "we are whitehats. contact us onchain," with the attacker later offering to return most of the funds once the underlying bug was fixed.
• The attacker told Blockstream, Liquid's technology provider, to "fix the bug first" and patch every node before they would send the bitcoin back.
• Blockstream replied that its bridge nodes were patched and it was "safe to return the funds," after which the attacker returned 3,400 BTC (about 85%), keeping roughly 598.5 BTC ($47.3 million).
• SideSwap said the issue stemmed from a bug in the Elements software that minted LBTC, stressing that neither its systems nor its peg-out authorization key was compromised.

South Korea's Hanwha develops tokenized securities platform on Avalanche as local regulation takes shape

South Korean brokerage Hanwha Investment & Securities has built a tokenized securities platform on Avalanche, developed with blockchain firm FairSquare Lab, Seoul Economic Daily reported.

• It comes just months before South Korea's securities token law takes effect in February, recognizing distributed ledgers as securities registers and incorporating security tokens into the existing capital markets system.
• The news also follows the FSC's planned three-stage roadmap to tokenize private funds, bonds, and unlisted stocks, eventually expanding to public securities and stablecoin settlement.
• Hanwha has been growing its tokenization footprint, amassing a 9.6% stake to become Securitize's largest shareholder and investing $22.3 million in Canton Network operator Digital Asset in July.

Spot bitcoin ETFs pulled in $987 million last week as institutional demand recovers

U.S. spot bitcoin ETFs pulled in $986.9 million last week, a third straight week of inflows, led by $691.5 million into BlackRock's IBIT as institutional demand recovers.

• Spot ether ETFs added $218.4 million, also their third consecutive positive week, capping a strong August that was bitcoin ETFs' best month since September 2025.
• Analysts read the inflows as genuine institutional accumulation rather than leverage-driven speculation, with Presto's Min Jung calling it a "catch-up trade" after crypto lagged other risk assets.
• Bitcoin is hovering around $79,000 after briefly breaking $82,000 last week, with analysts pointing to this week's jobless claims and CPI as the next catalysts, and a hot inflation print as the key downside risk.

Harmony to fully sunset Layer 1, proposes token migration to Ethereum for AI video initiative

Harmony said it will fully sunset its Layer 1 blockchain, citing security threats from state actors and AI agents, and proposed migrating its ONE token to Ethereum.

• The project plans to pivot into an AI video "remix economy," where creators publish open prompts and assets that fans fork and AI agents spin into more clips.
• Validators can wind down their nodes from Sept. 10, with Harmony setting aside $1.37 million to compensate those who transition to "governors" in the new venture.The token migration follows last month's major exploit, in which an attacker minted more than 3
• rillion unauthorized ONE tokens, the latest in a string of security incidents including 2022's $100 million Horizon bridge hack.

LeBron James teases Polymarket partnership in new social media video

LeBron James teased a Polymarket partnership in a video posted to X and Instagram, captioned "Welcome to Polymarket HQ. Coming soon," which Polymarket quickly reposted.

• A spokesperson told The Block it's a tease for a larger campaign rolling out this week, that James' work with Polymarket will focus on football, and that his prior DraftKings deal has expired.
• James' recent free-agency decision generated more than $273 million in prediction market volume, though most traders missed his surprise jump to the Philadelphia 76ers.

In the next 24 hours

• Bank of England Governor Andrew Bailey will speak at 9:15 a.m. ET on Tuesday.
• Lagos Blockchain Week continues. Boston Blockchain Week gets underway.

Reader poll

CPI drops Friday, the Fed's last big inflation read before it decides on rates. Will it come in softer than expected?

YES, SOFTER

NO, HOTTER OR IN LINE

One click records your pick. We'll share the result in a later edition.

*51% of respondents in last Monday's poll said they ultimately expect the Fed to hold or cut rates on Sept. 16.

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