Bitget Hacked, Fed Proposes Stablecoin Rules as Bitcoin Falls After Bond Yields Spike

New York State Attorney General James filed suit against Polymarket in state court on the 24th, arguing that the prediction market platform, which lets users trade on the outcomes of future events, constitutes illegal gambling prohibited by the state. Polymarket responded the same day by suing the state in federal court, asserting that authority to regulate prediction markets rests with the federal government, escalating a nationwide conflict over who has the power to oversee prediction markets. Earlier this year, James filed a series of similar suits against companies that operate or offer prediction markets, including Kalshi, Coinbase Financial Markets, and Gemini Titan. Hours later, Polymarket countersued, arguing that the Commodity Futures Trading Commission holds exclusive authority to regulate prediction markets, and that complying with New York's demands would undermine its federally protected right to operate nationwide, while continuing its business could expose it to "enormous" criminal liability, leaving it with what it described as an "impossible choice." New York is seeking civil penalties, disgorgement of illegally obtained profits, and full refunds to users, while Polymarket is asking the court to confirm that the state cannot apply its civil and criminal gambling regulations to the company.

The European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority published a joint risk report on September 23, warning that quantum computers pose a serious risk to the cryptography protecting communications, transactions, databases, and blockchains. They said the threat could materialize sooner than the commercialization of quantum technology, and called on financial institutions and market participants to prepare for the rapid development of quantum computers. In crypto assets, ownership is proven through digital signatures using public and private keys, but future quantum computers could derive a private key from a public key and impersonate the owner to move assets. CoinDesk, citing data from CryptoQuant, reported that roughly 6.9 million bitcoins could be exposed to quantum attacks. The EU has already set out a plan to migrate to post-quantum cryptography, asking member states to begin the transition by the end of 2026 and aiming to protect high-risk sectors by the end of 2030 at the latest. On September 10, Eigen Labs published research showing that the key computational processing required for a quantum attack on the cryptography used by Bitcoin and Ethereum could be reduced by more than 50 percent in resource terms compared with previous estimates.

The crypto market weakened, with Bitcoin reversing course to fall to around $84,300 and total market value dropping 2.73%. The decline came after the 10-year US bond yield surged to a new high, while investors increased their bets that the Fed will raise rates in October. The market is also watching US jobless claims figures as the next factor.