Bitcoin Dropped to $80K, $86M Was Drained from Ledger Users, and the CFTC Entered the Crypto Regulation Race
Bitcoin fell to $80,000 as $1.1 billion in leveraged positions were wiped out in a single day. More than $86 million was drained from Ledger hardware wallet users with no confirmed cause. The CFTC proposed two new crypto regulatory frameworks in the same week the SEC was already moving. US Bitcoin ETFs lost $731 million in two days. And a second Ethereum Layer 2 announced it is shutting down.
Here is everything that mattered in crypto in the previous week.
The CFTC Proposed Two New Crypto Regulatory Frameworks
The CFTC issued an advance notice of proposed rulemaking covering two areas: leveraged and financed retail crypto trading, and a new “crypto asset market” exchange category. A 60-day comment period is now open.
The CFTC’s move matters because it fills a gap the SEC has left open. The SEC’s proposals focus on securities and custody. The CFTC is staking its claim over spot crypto markets and retail leverage products, two areas where regulatory authority has been contested for years.
Both agencies now have active crypto proposals running in parallel. How their frameworks interact, and which products fall under which regulator, will define the structure of US crypto markets for the next decade.
$86 Million Was Drained from Ledger Hardware Wallet Users
More than $86 million was reported drained from Ledger hardware wallet users across Ethereum, TRON, and Bitcoin. The cause remained unconfirmed at the time of reporting.
Hardware wallets are designed to be the safest form of crypto custody, keeping private keys offline and away from internet-connected systems. A drain of this scale, with no confirmed attack vector, raises serious questions. If the exploit is in the device firmware, supply chain, or recovery phrase handling, the implications extend beyond the affected wallets.
Ledger has faced security incidents before. A 2020 database breach exposed customer data, and a 2023 connector library exploit drained funds from multiple DeFi apps. An $86 million drain without a confirmed cause is a significant escalation.
Bitcoin Fell to $80,000 as $1.1 Billion in Positions Were Liquidated
Bitcoin dropped to around $80,000 on October 8, triggering roughly $1.1 billion in forced liquidations of leveraged positions across the market. The drop was sharp enough to cascade through overleveraged long positions that had built up during Bitcoin’s strong Q3.
US spot Bitcoin ETFs lost about $731 million over October 7 and 8 combined. Ether ETFs added to the pressure with nine consecutive days of outflows.
By the end of the week, ETF flows turned positive again, suggesting institutional buyers treated the dip as an entry point rather than an exit signal. Whether the $80,000 level holds as support will be watched closely in the weeks ahead.
ESMA Told EU Crypto Providers to Drop Non-MiCA Stablecoins Within Three Months
ESMA stated that EU crypto service providers should not offer services tied to stablecoins that are not MiCA-compliant, and must remediate any existing exposure within three months.
The ruling has immediate commercial consequences. Tether’s USDT, the world’s largest stablecoin by market cap, is not MiCA-compliant after Tether chose not to pursue EU licensing. Any EU-regulated crypto platform that offers USDT trading pairs or accepts USDT deposits now has a three-month window to wind that down or face regulatory action.
Combined with last week’s ESMA recommendations to strengthen MiCA further, the EU is moving from framework publication to active enforcement faster than most expected.
FinCEN Withdrew Its Crypto Mixing Proposal
The Financial Crimes Enforcement Network withdrew its proposed finding that international crypto mixing is a primary money-laundering concern. The proposal, which would have imposed strict reporting requirements on financial institutions interacting with mixing services, was dropped without replacement.
The withdrawal is a reversal of a policy direction that had been building since 2022. It removes a significant compliance burden from exchanges and financial institutions that handle transactions touching mixing protocols. For privacy-focused crypto projects, it removes a major regulatory threat that had been hanging over the sector.
OKX Raised a $25 Billion Valuation Round With Circle and Ripple
OKX raised a strategic funding round with Circle and Ripple as investors, valuing the exchange at $25 billion. The participation of Circle, the issuer of USDC, and Ripple, the company behind XRP, signals that major crypto infrastructure firms are consolidating around a smaller number of large exchange platforms.
OKX has been expanding its regulatory footprint globally, including obtaining licenses in several major markets. The round positions it to accelerate that expansion while deepening ties with two of the most institutionally connected companies in the sector.
BaFin Refused MiCA Authorization for Bitcoin.de’s Parent Company
Germany’s financial regulator BaFin refused the MiCA authorization application filed by Futurum Bank, a unit of Bitcoin Group SE, which operates Bitcoin.de, one of Germany’s oldest crypto exchanges.
The refusal is one of the first high-profile MiCA authorization rejections in the EU. It signals that BaFin is applying the framework strictly, and that operating history alone is not sufficient for approval. Bitcoin.de has been active since 2011. The refusal will require Bitcoin Group SE to restructure its regulatory approach if it wants to continue operating under the new regime.
Pudgy Penguins’ Abstract Becomes the Second L2 to Shut Down in a Week
Abstract, the Ethereum Layer 2 backed by Pudgy Penguins, announced it will shut down on December 15 after losing tens of millions of dollars. The closure follows Blast’s shutdown announcement last week, making it two Ethereum L2s exiting in seven days.
The pattern reflects broader consolidation in the L2 market. Dozens of chains launched over the past two years, many with insufficient activity to sustain operations. As liquidity and users concentrate on higher-traffic networks, the economics of running a low-activity L2 have become increasingly difficult to justify.
The Treasury and IRS Updated the Staking Safe Harbor
The Treasury and IRS issued a revenue procedure updating the staking safe harbor for crypto investment trusts. The update provides clearer guidance on how staking income is treated for tax purposes within trust structures, addressing an area that had been ambiguous since staking became widespread.
For funds and ETFs that include staking-enabled assets, the update removes uncertainty about how to account for staking rewards and when they become taxable events.
Other News Worth Noting
- Securitize launched tokenized shares of 12 US companies, including Apple, Microsoft, and Nvidia, on Solana, settled in USDC. The launch follows tokenized equity trading hitting a record $15.6 billion in September, led by Robinhood at $6.57 billion.
- Ethereum’s Glamsterdam upgrade went live on the Sepolia testnet, setting a 200 million gas limit floor compared to roughly 60 million today. A higher gas limit means more transactions per block and lower fees at equivalent demand levels.
- Robinhood added $25 million of Bitcoin to its corporate balance sheet, joining the growing list of publicly traded companies holding Bitcoin as a treasury asset.
- Hong Kong said it plans to table a crypto trading and custody licensing bill by the end of 2026, extending its push to become a regulated crypto hub in Asia.
- A draft Greek law proposed a 10% tax on crypto capital gains, with annual gains up to €500 exempt. Greece would join a small group of EU countries with explicit crypto tax frameworks if the law passes.
- XRP Ledger reached 13 million total agentic payments, a milestone reflecting the growth of automated, machine-to-machine crypto transactions on the network.
- Conduit sued Tether over a $2.76 million USDT freeze, arguing Tether has no legal right to the funds. The case tests the limits of Tether’s freeze authority, which is written into USDT’s smart contract but has never been adjudicated in a US court.
- Winklevoss filed for a spot Zcash ETF that would hold ZEC directly and charge a 0.25% fee. Zcash is a privacy-focused cryptocurrency, and the filing tests how far regulators will extend ETF approval beyond Bitcoin and Ethereum.
- New York and Wyoming regulators agreed to jointly oversee crypto firms, sharing examination data to speed up licensing for cross-state operators.
Wrapping Up
Bitcoin dropped to $80,000 as $1.1 billion in leveraged longs were liquidated and ETFs shed $731 million in two days before recovering. More than $86 million disappeared from Ledger hardware wallet users with no confirmed cause. The CFTC entered the crypto regulation race with two new frameworks while ESMA gave EU providers three months to cut ties with non-MiCA stablecoins like USDT. OKX raised at a $25 billion valuation with Circle and Ripple backing it. BaFin rejected Bitcoin.de’s MiCA application. And two Ethereum Layer 2 networks shut down in the same week. The regulatory pressure is intensifying across every major jurisdiction at the same time.
Disclaimer: Don’t invest unless you’re prepared to lose all the money you invest. This is a high‑risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more at: https://go.payb.is/FCA-Info
