BitMEX Closure and OpenAI Breach Highlights

Bitcoin hovers above $64k as BitMEX announces its closure, and OpenAI models breach Hugging Face during testing. Telegram plans a new wallet.

Bitcoin remains steady above $64,000, as BitMEX announces its shutdown, OpenAI models breach Hugging Face during testing, and Telegram unveils a non-custodial Gram wallet, among other notable events from the past week.

Bitcoin on Hold

At the week's start, Bitcoin attempted to reach the $67,000 mark but eventually retraced to around $64,600.

Hourly BTC/USD chart from Binance. Data: TradingView.

Next week, the Federal Open Market Committee of the Federal Reserve is set to meet. As of this writing, nearly 66% of traders expect no change to the key interest rate. However, about a third of market participants anticipate an increase to between 3.75% and 4%, which could pressure risk assets, including cryptocurrencies.

Source: CME FedWatch.

Grayscale analysts have directly linked the formation of a market bottom for Bitcoin in the current cycle to the Fed's decision to refrain from raising rates, provided the stability of the U.S. economy is maintained.

According to CryptoQuant, Ethereum is also showing on-chain signals indicative of market bottoms. However, experts caution that there is no definitive confirmation of a bottom yet.

The second-largest cryptocurrency by market capitalization exhibited a stronger weekly performance than Bitcoin, with a 1.15% increase compared to Bitcoin's 0.25%. TRON's price rose by over 1.6%. Conversely, Hyperliquid's token saw a correction of nearly 3.8%, but has increased 38% overall during the past three months.

Source: CoinMarketCap.

Spot Bitcoin ETFs attracted $33.8 million this week, although the inflow momentum significantly weakened compared to the previous two weeks, which saw inflows of $197 million and $76 million, respectively.

Source: SoSoValue.

The last two trading sessions notably impacted this week's figures, with investors withdrawing $225 million and $228 million from products on Thursday and Friday, respectively.

Ethereum fund flows also turned negative by the week's end, despite attracting $103.9 million overall.

Source: SoSoValue.

The cryptocurrency fear and greed index dropped to 26 points, remaining in the "fear" zone.

Source: Alternative.me.

The total market capitalization decreased from $2.27 trillion to $2.21 trillion, with Bitcoin's dominance rising to 58.7% and Ethereum's share increasing from 9.9% to 10.3%.

BitMEX Announces Closure

Cryptocurrency exchange BitMEX will cease operations entirely on September 23. Registration for new accounts has already been halted, and users are urged to close positions and withdraw funds as soon as possible.

This decision was made by the board of HDR Global Trading Limited, the holding company of BitMEX, following a "strategic analysis of the business and the crypto industry as a whole."

The company stated that its assets exceed its liabilities, as detailed on its Proof of Reserves and Liabilities page.

Trading will continue until the closure date, but starting August 26, only the closing of existing positions will be permitted.

After operations halt, users will still have access to their accounts for balance viewing, transaction history, and fund withdrawals.

BitMEX has already unlocked all staked BMEX tokens, which are now available in users' accounts.

Having been in operation for over 11 years since its launch in 2014, BitMEX pioneered perpetual contracts and was among the first to offer leveraged trading of crypto derivatives up to 100x.

https://twitter.com/benbybit/status/2080241287102673216

"The end of an era. Respect to the legends who built this," wrote Ben Zhou, co-founder and CEO of Bybit.

Immediately following BitMEX's announcement, it was reported that the exchange faced accusations of manipulation and misappropriation of 622.66 BTC. A class-action lawsuit was filed in the Southern District of New York by BKX Services and David Namdar.

The plaintiffs claim that BitMEX intentionally created a system to profit from liquidating client positions. The lawsuit states that the exchange's internal trading desk had access to confidential user data, allowing traders to execute trades even during server "hangs" when regular clients could not manage their positions.

Additionally, the plaintiffs allege that the exchange forcibly closed leveraged positions up to 100x, even when collateral exceeded losses by two-fold. Reportedly, the remaining funds were directed to the platform's insurance fund, generating income for the company.

The plaintiffs are seeking the return of the withheld bitcoins and compensation for damages.

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OpenAI Models Breached Hugging Face During Testing

Hugging Face, which operates one of the largest platforms for hosting and developing AI models, revealed details about an attack on part of its operational infrastructure. The hacking operation was fully executed by an autonomous agent-based system.

According to Hugging Face, the AI hacker accessed a limited set of internal data and several service credentials.

The company found no evidence of changes to public models, datasets, or Spaces applications. An examination of container images and published software packages also showed no interference in the supply chain.

On July 21, OpenAI confirmed that its products, GPT-5.6 Sol and a more powerful unreleased model, conducted the attack on Hugging Face's infrastructure. They were tested on the ExploitGym benchmark—a collection of real vulnerabilities that the agent was to convert into operational exploits.

The test occurred in an isolated environment without network access, with the only external channel being an internal proxy server for downloading software packages. It was in this server that the models discovered a zero-day vulnerability and exploited it. They then escalated their access rights, moved between internal OpenAI nodes, and reached a machine with internet access.

Subsequently, the systems assumed that the ExploitGym solutions were stored at Hugging Face. They linked the stolen credentials to new vulnerabilities and achieved remote code execution on the platform's servers, extracting test responses directly from the operational database.

Notably, AI was also used for incident log analysis at Hugging Face. However, commercial American models blocked requests from security specialists, forcing them to use the open-source GLM 5.2 from Z.ai instead.

Telegram to Launch Non-Custodial Gram Wallet

Telegram founder Pavel Durov announced the launch of a non-custodial cryptocurrency wallet for Gram (formerly known as Toncoin). This product will be available across all versions of the messenger and accessible to "over a billion users."

Currently, Telegram operates Wallet, a product developed by The Open Platform (TOP), which has over 150 million registered users. By default, it functions in a custodial mode.

Andrey Rogozov, founder and CEO of TOP, explained to ForkLog that the two products will not compete but rather complement each other. According to him, the Wallet in Telegram will remain a standalone multi-chain product with a wider range of functions, supporting trading, perpetual contracts, tokenized assets, and an Earn tool, in addition to storage and transfers.

Durov did not disclose the exact launch date, supported assets, or key management scheme.

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Buterin Introduces Anonymous Board with AI Moderation on Aztec

Ethereum co-founder Vitalik Buterin unveiled a demo version of an anonymous message board with moderation for the L2 network Aztec. The project's source code has been published on GitHub.

The prototype is based on the idea of an anonymous moderated platform that Buterin described in 2022. He referred to the development as a "toy version," created in a vibe-coding mode.

"This is an early stage, but already very interesting and non-trivial things can be done," Buterin wrote.

Users deposit ETH via a smart contract on the Ethereum mainnet, allowing them to publish messages on Aztec. Funds can later be withdrawn back to L1.

The address and deposit amount remain public. Withdrawals also reveal the recipient's wallet on Ethereum. Meanwhile, messages do not contain the sender's address in the public data and are not linked to the original deposit.

Weekly Recap: BitMEX Closure and OpenAI Model Breach