French bank allegedly loses over $133 million in crypto exploit, and more

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

Happy Wednesday! Bitcoin is trading above $80,000, recovering from its recent decline following the U.S. midterm elections and the Binance hack.

In today's newsletter, a French bank reportedly loses over $133 million in an exploit flagged by crypto investigator ZachXBT, Morgan Stanley moves to tokenize U.S. equities and Treasurys, Coinbase says 99% of customer assets are held in cold storage following the Binance hack, and more.

Meanwhile, Circle reported $865 million in third-quarter revenue and reserve income, and South Korea's ruling party proposes delaying crypto income taxes.

P.S. Don't forget to check out The Latent, our sister website covering AI. Get The Latent Daily here and all other The Block newsletters here. Also, follow The Block and The Latent on X for more updates.

French bank allegedly loses over $133 million in crypto exploit

Onchain investigator ZachXBT identified French bank Crédit Mutuel Arkéa as the alleged victim of a theft involving more than $133 million withdrawn from centralized crypto exchange accounts.

• ZachXBT initially reported losses of more than $106 million on Nov. 2, then raised the estimate after tracing another $27 million in suspicious withdrawals.
• The stolen funds were withdrawn in USDC and USDT, with the attacker later swapping assets into ETH and XMR and moving funds across multiple blockchains, according to ZachXBT.
• ZachXBT said the attack spanned several days and that the total losses could be higher. He also said he was highly confident the attacker was not linked to North Korea's Lazarus Group.
• Crédit Mutuel Arkéa has not publicly confirmed or denied the incident. The allegations have not been independently verified by the bank or authorities.

Morgan Stanley among first banks to tokenize US stocks and Treasurys through DTCC

Morgan Stanley said it is among the first banks to tokenize U.S. equities and Treasurys through the Depository Trust & Clearing Corporation's new tokenization service.

• The service launched on Oct. 28 with 20 participating institutions, including JPMorgan, Citi, Bank of America, Fidelity, State Street and UBS. It initially supports Canton Network and DTCC's private Besu network.
• Separately, Morgan Stanley expects to support tokenized equities on its alternative trading system in the first quarter of 2027, later than its previous target of the second half of 2026.

Coinbase says over 99% of customer assets are held in cold storage

Coinbase said more than 99% of customer assets are held in offline cold storage, following Binance's $6.34 billion hack.

• The exchange said it was not affected by the Binance breach and that customer assets are held 1:1, remain customer property, and are not lent or used without customer authorization.
• Coinbase said its security measures include distributed private keys, withdrawal limits, and anomaly detection to protect funds from unauthorized transfers.

Sherrod Brown defeats Jon Husted despite crypto PAC's $30 million push

Former Democratic Sen. Sherrod Brown defeated Republican incumbent Jon Husted in Ohio's Senate race, dealing a setback to crypto political action committee Fairshake.

• Fairshake committed $30 million to opposing Brown in the race, after previously spending $12 million to support Bernie Moreno's successful campaign against him in 2024.
• Brown previously chaired the Senate Banking Committee. If Democrats control the Senate, he could become chair of the Senate Agriculture Committee, which oversees issues including digital assets and prediction markets.

SEC division views Canton Coin as digital commodity in no-action letter

The SEC's Division of Corporation Finance said it views Canton Coin (CC) as a digital commodity and would not recommend enforcement action over its programmatic issuance under the conditions described in a no-action letter.

• The division cited Canton Network's decentralized structure and said the token's value comes from network operations and supply and demand rather than the managerial efforts of others.
• The letter is limited to the specific facts presented and does not constitute a legal determination that CC is not a security.

In the next 24 hours

• The U.S. will release third-quarter preliminary productivity and costs data and weekly jobless claims on Thursday. Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan are also scheduled to speak.
• The eurozone will release September's producer price data and October's construction PMI on Thursday. ECB President Christine Lagarde and officials Isabel Schnabel and Philip Lane are also scheduled to speak.
• Ethena (ENA) and Opinion (OPN) are among the tokens scheduled to unlock on Thursday.

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