AI-powered security initiative aims to protect crypto infrastructure from AI-driven hacks
A solo Digital Asset News host covers Anthropic's Project Glasswing, recent crypto hacks, Bitcoin market conditions, and various altcoin developments.
Summary
The host of Digital Asset News opens with news that white hat hackers who stole 4,000 Bitcoin from Liquid returned 3,400 BTC and kept roughly 598 BTC (~$47 million) as a bounty — with Liquid's apparent acceptance. He then moves to the central topic: the growing threat of AI-assisted hacking against crypto infrastructure, citing the shutdown of Bitcoin swap provider Boltz as a concrete example of a project overwhelmed by automated AI probing. The main positive development he highlights is Anthropic's Project Glasswing, which commits up to $100 million in usage credits to deploy its restricted Mythos model defensively — identifying and patching vulnerabilities in critical systems before malicious actors can exploit them. He also covers Bitcoin's current price action, a Tron ETF listing on the Chicago Stock Exchange, Hunter Biden's memecoin launch, and a Q&A session touching on altcoin season, the FOMC, Trump's memecoin, and mining economics.
Key Takeaways
FULL TRANSCRIPT
White Hat Hackers Return 85% of Stolen Bitcoin to Liquid Federation
With all the hacks that are going on, especially in the crypto asset space, it makes me quite concerned about what's happening in the background — not so much the macro or geopolitical effects, but specifically the hacks going on with AI. There was a piece I read which gave me a massive amount of relief. This is actually going to be a very bullish stream. So everybody, welcome back. Let's take a look at what's going on.
Just recently, this is a post from Alex Thorne — he is the head of research over at Galaxy Digital, previously at Fidelity — and this is something we covered yesterday. Liquid hackers returned 85% of stolen Bitcoin to the Liquid Federation. This is actually very positive news, because when we look at these hacks we think, "Oh, they're never going to get them back." Well, there are black hat hackers and there are white hat hackers.
I am in the wrong industry. I should become a white hat hacker with the help of Claude or ChatGPT, just start hacking everybody's different protocols, and then say, "Whoopsie, I found some problems — I'm going to give you most of your stuff back, but I'm going to keep some as a bounty." And people will be happy to have that happen. This is exactly what happened in this instance.
The Liquid hackers were white hat hackers. They hacked 4,000 Bitcoin a couple of days ago, then sent 3,400 Bitcoin back to the original Liquid Federation address and kept 598.5 Bitcoin — approximately $47 million — for themselves. Not a bad day. And Liquid's reaction was essentially, "Hey, do whatever you want."
Alex did a great job capturing the back-and-forth between the Liquid team and the white hat hackers. The hackers said, "Just so you know, we are white hat — contact us on-chain." Liquid said, "Please contact security," and the hackers provided the transaction IDs explaining what they did. Then they said, "Here — sending most back to this address. Is that okay?" Liquid said, "Yes, but please fix the bug first. The chain is at risk at the latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix." And Blockstream responded with essentially, "Yes, yes, yes — thank you so much."
So in this situation, I've got to start being a white hat hacker if I possibly can.
AI-Assisted Attacks Are Already Testing Crypto Defenses
I see these types of things — what went on with cold storage devices, what's going on with DeFi, what's happening behind the scenes — and it feels like we're really with our backs up against the wall, especially with AI helping hackers. Two years ago, hackers were doing just fine if they wanted to hack you, and all they had to do was make you do things. Well, now they're actually hacking the ecosystems and the projects behind them.
So what do we do? Enter Anthropic.
There was a great article over at CryptoSlate talking about how Vitalik Buterin is now confident AI won't break crypto, betting 90% of his net worth on it — even as AI-powered attacks began testing crypto infrastructure. And if you can make that much money as a white hat hacker, imagine how much you can make as a black hat hacker.
Silicon Valley investor and AI risk commentator Lauren Shapiro said he sees a 50% probability that Bitcoin will fall more than 50% over the next two years because AI will produce hacks galore. He's the host of Doom Debates — that does not sound too positive. As he's talking about this, it does make a little bit of sense given what's happening.
But Vitalik Buterin, founder of Ethereum, says this: "My basic reasons are that I am quite optimistic about cybersecurity in the long term, and I see the primary problem as being the transition."
I read that and thought to myself — that's really not a strong case, Vitalik. This does not give me any kind of relief. This isn't getting me any hope. That is not what we need in this space. We need some concrete evidence.
Boltz Suspended After AI Probing Overwhelmed Its Team
Here's where it gets even worse before it gets better. In August, Bitcoin swap provider Boltz indefinitely suspended its service after months of automated, AI-assisted probing led to several contained exploits and began moving faster than its small development team could patch vulnerabilities. Essentially, they opened it up to see what AI could do — and it could do so much they couldn't keep up with all the vulnerabilities and attack vectors being probed.
Boltz said its non-custodial architecture protected customer funds, but the company absorbed losses from the exploits and eventually concluded it could no longer safely run the service.
Now, there's a big difference between what's going on with the Bitcoin ecosystem — miners, the centralized system, the most decentralized digital asset out there — as opposed to what's happening with a swap provider like Boltz, or DeFi more broadly. But if they're having problems, imagine all the DeFi out there that's just going to get wiped away.
Anthropic's Project Glasswing: $100 Million to Defend Crypto Infrastructure
So what's the resolution? I've said this before — I don't know why this isn't being done right now at a heavy pace. If hackers are using AI to hack everything, why wouldn't the companies, the infrastructures, the chains start using AI to protect everything?
Well, it looks like Anthropic is going to do it for us.
Anthropic has restricted public access to its Claude Mythos model — which was a massive model that came out and was unfortunately able to essentially hack top-secret documentation, which set alarm bells off in the White House and led to it being shut down. We'll see how that works out even as open-source alternatives emerge.
But here's the key development: because of its ability to autonomously discover and weaponize software vulnerabilities, Anthropic has instead directed those capabilities toward defenders through Project Glasswing. I've linked Project Glasswing in the description so you can check it out yourself. Essentially, they are bringing together major top industries to fight against these hacks.
The program uses the Mythos preview model to identify and repair vulnerabilities in critical systems before malicious attackers equipped with similarly capable models can find them. And this is the big thing: Anthropic has committed as much as $100 million in usage credits to the effort.
Now, there's a little nuance here — these are usage credits from their own company, but to actually run AI at this scale, the electrical demands are massive, on top of all the chips and infrastructure required. So if they want to do this, I think it's a great thing moving forward. They're going to use it to their advantage as they come into their IPO, which could be Q1 or Q2 of 2027 — this is going to be a very big thing and will put Anthropic a little bit further forward. But my big thing is simply this: I just want these types of efforts to protect the Bitcoin and digital asset infrastructure.
Bitcoin Price Action and Market Outlook
Let me know what you think about that in the comments. Now, zooming in on the broader market — today we're almost at $79,000. Bitcoin is at $78K, up about 4%. It's a nice green day across the board. Tron is down 0.2%. Even Cardano's up — you know it's a good day if that's up.
I did a great interview during that 20-hour live stream with me and Rob Art. I cut it out, spliced it, and uploaded it to the regular video section. A lot of good response so far. Rob has a really good eye for what's going on in the markets. He did call near the top in 2025, and he's saying the bottom is not in yet. He is quite bearish, but he's bullish when things flip. I can get behind that.
However, I continue to buy every day. Even though yesterday was a holiday, I was able to do that with Cash App. I am hoping we do get a massive drop-off — anything could happen.
Donald Trump posted over at Truth Social saying, "Good news — oil prices are going to drop. All we've got to do is win this war with Iran." Unfortunately, we still have problems with the updates, and it looks like oil is up near $100 as the Strait of Hormuz keeps ship traffic down. Brent crude is almost at $97 and rising. We'll see if that continues.
As far as the markets themselves, things are turning pretty bullish. I don't know if I'm going to get my Q4 drop that me and Rob Art were talking about. Looking at Bull Mania, on the daily it flipped bullish two months ago and is up 22%. On the weekly — the big one — it's still bullish but down a little, only 2%, and it just flipped bullish on the weekly for Bitcoin about a day and a half ago. We'll see how it all pans out.
I still believe that if we don't get a big drop-off in Q4, we'll still run up, and 2027 will be a better year, followed by 2028, which is a halving year — and you know what happens after that: some pretty good price action.
Wes's Smart Money Tracking Bot Called the Top
Taking a look at Wes over at Smart Money Tracking — his SMC bot, which I was a little skeptical about but have been watching for about six to nine months now — the bot actually told you to sell at $116,000. I'll be damned. That's better than pretty much everybody I've ever listened to. Between Ivan and Wes, I'm going to lean on those guys heavily. But look at that sell signal — it was on the 27th of October. He didn't hit the exact top, but he was close. That's what's going on there.
Tron ETF to List on Chicago Stock Exchange
Just quickly, because if we're going to talk about Bitcoin we should also talk about altcoins — at some point they're going to run. Congratulations to Tron: a Tron ETF will be listed on the Chicago Stock Exchange. This will be the second listing for the Tron ecosystem in the US, following its listing on NASDAQ. Tron is down 0.2% today, but it has buoyed my portfolio for quite some time. And it looks like Justin Sun follows me — I'll have to follow him back.
Hunter Biden Launches a Memecoin
Lastly, from CoinBase — I found this funny, and I know this is straight-up gambling, but just so everybody's aware: I have a friend named Bobby who will definitely be investing in this.
Hunter Biden, son of former US President Joe Biden, is releasing his own memecoin. Now, before you start rolling your eyes — look, the sitting president of the United States did the same thing for himself and for his wife. If you understand this is a gamble and you are gambling, then I think we're okay. This is gambling, not investment advice. Whatever you gamble, you're probably going to lose everything, or you could double your money — one of those two things will probably happen.
The project is a memecoin. It's worthless. It has no utility — let's not beat around the bush. However, it sounds fun. The project could burn up to 30% of its supply if 30 predetermined outcomes occur. Three have apparently already been met. The conditions include: a Democrat wins the 2028 election, Bitcoin reaches a new all-time high by 2028— that'll probably happen — and the coin's valuation surpasses Trump's. If the targets are missed, a proportional number of tokens will be donated to charity. That's gambling. Sounds fun. My friend Bobby's going to do it. I like those rules.
Q&A
Are we in alt season? And if we are, how long does it last?
No, we are not. In 2021, we had a nice run into Bitcoin and it hit its all-time high in roughly November — around the 13th or 14th, correct me in the comments. Then in December 2021, you saw all-time highs for a lot of your favorite altcoins. Things would flow into Bitcoin first, then into large-cap altcoins like Ethereum and Solana, then into lesser-known caps, and then everything would just implode. That was 2021.
2025 wasn't like that. We did see a blowoff — actually it wasn't quite a blowoff top, it was kind of a weak pump for Bitcoin until October 6, 2025. But after that, there was really no pumping, just dumping. And for that reason, altcoins really didn't run much at all. So right now, it's not alt season — for me it's an accumulation phase. We'll see if I'm right. I just invest in the best: Bitcoin, Ethereum, Solana, and Tron. A lot of these other things are going to go to zero, and they should, but those four actually have utility and can bring in the biggest factor, which is speculation.
On Trump's memecoin versus Hunter Biden's:
It's not a pump and dump because he didn't sell anything, but he didn't give any kind of information to insiders either. Look, it may be a perfect coin in some people's eyes, but I think he still rugpulled a lot of people — especially with the Melania coin. You cannot convince me otherwise. Maybe he didn't sell too many tokens himself, but all the people who got in early and dumped early — you're telling me that wasn't insider activity? Come on.
I think it was a mistake for a sitting president of the United States to launch a memecoin, and then his wife, and then to get into the industry itself. People will say, "This is America, he can do whatever he wants." That's true. It's just a little bit different when you're the sitting president of the United States.
On Trump being exhausting:
Having Trump in office is exhausting. I'll be glad when he's gone because it just makes things complicated. I liked it when corruption was beautifully silent. Those were good days — when you didn't learn about it until later. I just like people to shut up and do their corruption quietly.
On INC Digital stock:
If you don't know what INC Digital is — it's essentially the investment given to Celsius investors as a stock. Not a bad day: up 8%. One month: up 40%. Six months: not too bad. I believe their big thing is investing into Bitcoin mining. Need to do another video on that one.
On token unlocks:
Pretty much what happens is that as soon as something launches and they have token unlocks, especially during the listing, it negatively affects the price. When CHKN listed, that became a thing.
On FOMC expectations:
It's about a 60/40 split — they're going to raise rates, but we'll see what happens. I think some people will still be caught on their heels if rates go up and will start selling off, thinking it's the worst thing of all time. For me, I hope that happens because then I can buy more at a lower price. Most of you guys are probably buy-and-hold types waiting for the cycles to play out.
On AI tools:
My favorite AI tool is Claude. I know ChatGPT just had their latest release and it's supposed to be impressive, but I just don't want to keep moving back and forth. Claude works just fine.
On water situation in Puerto Rico:
It keeps raining so some parts are good, but half the island is on a ration. In Ocean Park, everything's pretty much on the daily — no water being shut off. Here in Guaynabo there are no problems either. But if you move further toward Arecibo and areas like that, I hear there are more issues going on.
On Bitcoin mining economics:
At 7 cents per kilowatt hour, it costs about $52,000 to mine one Bitcoin. At 10 cents, $74,000. At 15 cents, $111,000. That's why there was such a big mining effort in Iran — they were paying less than a penny per kilowatt hour and just making money hand over fist. Of course, that stopped when the situation with Iran escalated.