Someone Hid a Spy Chip Inside Ledger Wallets

Hey Lantern Community,

A hidden chip in Ledger wallets drained an estimated $72 to $93 million this week. Bitcoin ETFs have sold about $860 million in six days, and a hot inflation report wiped out nearly $1 billion in leveraged bets.

On our side, Sell Collateral is live, and you can now borrow against HYPE, AVAX and CC. Let's get into it.

Security

A spy chip inside a hardware wallet

On October 9, Ledger started investigating a wave of drained wallets. By October 10, it had confirmed the cause: Ledger Nano X devices sold through CryptoBilis, an authorized reseller in Malaysia, Indonesia and the Philippines, had an extra chip hidden inside.

The implant carried an eSIM, an antenna and a tiny LTE modem tucked behind the screen. It read the recovery phrase off the display and sent it out over the mobile network. Ledger's own Genuine Check didn't catch it. Investigators put losses at $72 million to $93 million across roughly 311 wallets, with about $70 million taken as USDT on Tron.

This was a supply-chain attack. The users did nothing wrong. They bought a sealed box from a listed reseller.

At Lantern, your loan collateral isn't on a device you bought. It sits in BitGo's insured, institutional cold storage, and it never touches a smart contract.

Markets

ETFs have sold $860 million in six days

Spot Bitcoin ETFs saw $678.9 million in net outflows for the week of October 5 to 9, most of it on Wednesday and Thursday. Bitcoin slid from about $86,480 to $82,546 and bottomed near $80,300 on October 8.

The selling carried into this week. The funds lost $65.4 million on Monday, took in $175.7 million on Tuesday, then shed $261.4 million on CPI day. Fidelity's FBTC led the exits with $152.7 million, followed by BlackRock's IBIT at $110.9 million. Ether ETFs lost another $129.5 million the same day.

That's roughly $860 million out of Bitcoin ETFs in six trading days.

XRP

Evernorth picks Ripple, Kraken, Coinbase and BitGo to put its XRP to work

Evernorth started trading on Nasdaq as XRPN on October 12 with about 473 million XRP. Two days later, it named Ripple, Kraken, Coinbase and BitGo as partners to start putting that XRP to work from the fourth quarter. BitGo is also where Lantern keeps your loan collateral.

Banks kept building on the XRP Ledger too. On October 12, Standard Chartered went live with custody for RLUSD on the XRP Ledger through its Dubai branch. It’s also working with Ripple and LMAX to let institutions post RLUSD as trading collateral without moving it onto the exchange. On October 15, Ripple signed Korean brokerage Meritz Securities, its fourth Korean institution this year.

Lantern Spotlight

Sell Collateral, plus three new assets

• You can now sell some or all of your collateral from inside your loan. Pick an amount on your loan page and confirm. Lantern sells at the market rate and puts the proceeds toward what you owe. Sell it all and we pay off the loan first, then credit the rest to your Lantern Trading balance. It's live for every borrower with Lantern Trading access, up to $250,000 per sale. Selling may have tax consequences.

• We also added three new collateral assets this week: Hyperliquid (HYPE), Avalanche (AVAX) and Canton Coin (CC). All three are available at up to 33% LTV, with 13% annual interest plus a 2% upfront fee on 12-month terms.

Read the step by step guide: How To Sell Your Collateral On Lantern

See the new assets: Loans Backed by Hyperliquid, Canton and Avalanche

Rough week. ETF money left, inflation ran hot, and one of the most trusted names in self-custody had a box tampered with before it reached the buyer. Bitcoin-backed loans at Lantern start at 8%, with same-day funding including weekends, 0% liquidation fees, and a 72-hour window to respond to a margin call.

Borrow against your crypto here: https://lantern.finance/borrow

Until next week,

The Lantern Team

This newsletter is for educational purposes only and does not constitute financial advice. Always consult with your financial advisor before making lending decisions.