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Good morning and welcome to the Hodl Report
One minute you’re sipping stale office coffee, the next you’re watching $100 billion evaporate from the crypto market like someone pulled the plug mid-bath. Welcome to October 10th: the day whales feasted, bots battled for scraps, and the rest of us just stared at our screens whispering, “bruh.” Oh, and if you thought Ivy League brains were busy curing cancer, two MIT alums just allegedly yeeted $25 million in ETH using blockchain wizardry that would make Houdini blush.
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Editors Corner
The October 10th Crypto Meltdown: The Day the Whales Ate
I’ve seen a lot of chaos in crypto — flash crashes, Elon tweets, exchange hacks — but October 10th? That was something else entirely. The deeper I’ve dug into what happened, the more it looks like a calculated ambush disguised as a market move.
Here’s what went down:
At 9:30 AM ET, crypto started bleeding out. No big news, no tariff post yet — just sudden, heavy sell pressure. By the time the first tariff headline hit Twitter at 10:57 AM, the whales were already in full control, quietly loading up on shorts like they had a script.
Then came the real carnage. Around 4:30 PM, someone — or several someones — dropped over $23 million into short positions. You don’t throw that kind of capital around unless you’re very sure of what’s about to happen.
Minutes later, the market completely unhinged. Longs were liquidated at a 7:1 ratio to shorts — meaning roughly 80% of the 1.6 million traders caught in the blast were levered long. I watched the charts like a slow-motion car crash: cascading liquidations, positions nuked, traders begging for bids that never came.
By 5:20 PM ET, Bitcoin had printed its first-ever $20,000 candle, wiping out $380 billion in market cap before violently snapping back as the whales closed out their shorts into the panic.
It was the largest liquidation event in crypto history — nine times bigger than the previous record.
Mark my words: October 10th will go down in crypto lore. The day the whales coordinated, the leverage junkies got smoked, and the rest of us were reminded — brutally — that in this market, someone always knows before you do.
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Today’s Report
MIT Bros Allegedly Jack $25M ETH in 12 Seconds Using Blockchain Sleight of Hand
Our Report
Two brothers, both MIT alumni, are at the center of a crypto heist story that seems ripped from a tech thriller: in April 2023 they allegedly stole $25 million in Ethereum in just 12 seconds, using a sophisticated exploit targeting pending (i.e. not yet confirmed) blockchain transactions. The U.S. Department of Justice claims this is the first time such a “novel” wire fraud / money‑laundering scheme has been criminally charged. If convicted, each faces over 20 years behind bars. The prosecutors warn this case “calls the very integrity of the blockchain into question.”
Key Points
The two suspects are Anton Peraire‑Bueno (24) and James Peraire‑Bueno (28) — both reported to have studied at MIT.
Their alleged method: intercept pending private transactions and manipulate them before confirmation to siphon off funds.
The DOJ says this is the first prosecution of this kind of attack on a blockchain protocol, marking a legal precedent in how crypto fraud is prosecuted.
Officials emphasize that the scheme took months to design but was executed in seconds.
Charges include wire fraud and money laundering; maximum penalties could exceed 20 years in prison.
U.S. authorities (including the IRS) allege that the pair’s actions “calls the very integrity of the blockchain into question.”
Relevance
This case is a flashpoint in the evolving intersection of blockchain tech, financial crime, and law enforcement jurisdiction. Up until now, most high‑profile crypto thefts involved hacks of custodial platforms, private keys, or social engineering. This one allegedly exploits the mechanics of how transactions propagate and settle on-chain — a more subtle, protocol‑level vulnerability.
For traders, developers, and regulators, the implications are serious:
Risk model rethink: It’s no longer enough to fortify your wallet or exchange interface — the rules of the chain might be attack surfaces.
Precedent alert: If prosecutors succeed, this will expand legal tools against protocol-level manipulation, not just platform-level hacks.
Market trust factor: Public confidence in blockchain as “immutable ledger” is on trial. Even if the blockchain wasn’t altered, the perception of vulnerability can damage adoption momentum.
Emerging adversaries: The attackers are sharp, likely academically trained. The next threat won’t look like a cookie-cutter hacker — it will look like a math prodigy with time and access.
In short: we’re crossing from “crypto as frontier” to “crypto as regulated domain.” This case may be the first in a series where law enforcement treats blockchains themselves as crime surfaces, not just rails. Stay alert — the new wave of attacks will likely target consensus logic, mempool ordering, and transaction state transitions.
Today’s Top News
HEADLINES
Senate Votes to Repeal Biden-Era Crypto Tax Rule — The U.S. Senate has voted 70–27 to repeal a rule requiring DeFi platforms to report customer activity to the IRS. Critics say the rule would have stifled innovation and imposed burdensome compliance. The repeal, if finalized, would mark a major regulatory retreat.
Crypto Exchange Bybit Suffers $1.4 Billion Hack — Bybit reported a $1.4 billion loss from a major hack targeting its ether cold wallet. The exchange says customer withdrawals remain functional and it will absorb the losses internally. The breach raises serious concerns about security standards across large exchanges.
The Feds Say Two Brothers Stole $25 Million in Crypto in 12 Seconds — Two MIT-educated brothers are on trial for manipulating Ethereum bots in a lightning-fast $25M exploit. Prosecutors call it wire fraud; the defense says they simply outsmarted the system. The case could set a precedent for legality in automated blockchain trading.
Market Trendline
PRICE ACTION
Crypto just went through a cleansing. Over the weekend, more than $19 billion was liquidated in the biggest single-day wipeout ever, triggered by a surprise U.S.–China tariff escalation. Sentiment flipped sharply into risk-off mode, with BTC falling ~14% intraday before clawing back a chunk. Altcoins, already more fragile, got crushed harder. The rebound since has been fragile and uneven.
Broadly, we’re now trapped in a low-liquidity, high-volatility regime where headline shocks (tariffs, regulation) carry oversize weight.
Notable Movers
Bitcoin: After being forced down to the ~$106–108 k range, BTC has recovered toward ~$112–114 k as of this morning, but remains struggling to reclaim strong support over $115 k.
Ethereum: ETH dropped ~12%, then rallied off the lows. It’s still lagging behind BTC in relative strength, reflecting less confidence in speculative dApps right now.
High Flyers (Altcoins): Some small- and mid-cap names saw 6–8%+ squeezes as opportunistic shorts were liquidated. (E.g. Bittensor showed strength among the gainers.)
Weak Links: More speculative protocols tied to memecoins, high leverage, or thin markets saw 30–70% drawdowns before partial rebounds.
Macro View
This purge was less about fundamentals and more about a shock-exacerbated deleveraging spiral. The tariff shock removed the floor under risk assets, triggering auto-deleveraging protocols to cascade. What we’re left with is:
Elevated implied volatility, especially in options markets
Uneven recovery — liquidity is weak in altcoins
A still-dominant narrative: macro/regulation > on-chain fundamentals
Eyes now on how central banks, U.S.–China tensions, and regulation play out to dictate direction
Bottom Line
We just got smacked by a headline shock that shook out overleveraged bets. The bounce back is real but cautious — markets are still spooked. BTC is trying to stabilize, altcoins are technically “cheaper” but structurally wounded, and every fresh macro headline now has outsized impact. Until volatility meaningfully decompresses, expect “two‑step” moves: short-lived rebounds followed by retests or fresh drops.
Today’s Top Tweet
TWITTER NEVER SLEEPS
All said and done, regardless of what sparked it, Friday was a "Flash Crash". Flash crashes usually recover in V-shapes back to their prior price/range and usually go on to make new highs shortly after.
In this case, we entirely wiped out all accumulated leverage too.
Higher.
— #Raoul Pal (#@RaoulGMI)
10:16 PM • Oct 12, 2025
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