Today's stories turn on one question: when the money disappears, who is on the hook? An exchange absorbed a $16 million loss it cannot fully explain, Bitcoin's oldest software wallet patched a flaw that turned a fee increase into a payment to a thief, and a trader lost platform access over a friend's loan repayment.
CoinDCX Credited Deposits It Never Swept
On October 25, India's largest crypto exchange confirmed that roughly 15.99 million USDT was drained from deposit wallets it had retired after a July 2025 breach. Customers kept sending USDT to the old addresses, CoinDCX credited those deposits to their accounts, and the sweeper meant to move the coins into storage stopped working. Bitquery traced one address holding 15.82 million USDT across 88 deposits.
CoinDCX is absorbing the loss, which matters more than it looks. An exchange here can argue that funds sent to a retired address are the customer's problem; crediting those deposits anyway looks a great deal like accepting custody. Note also where the recovered money came from. Tether froze about 2.21 million USDT on October 23. An issuer can do in hours what litigation takes years to attempt.
Electrum Patched a Flaw That Weaponized the Fee Bump
On October 24, Electrum's developers released version 4.8.3 and disclosed a vulnerability malicious servers were already exploiting. Electrum trusted its servers' pending transactions without verifying signatures, so a hostile server could substitute a fake, invalidly signed transaction paying the user's coins to an attacker, with no fee attached so it looked stuck. When the user hit Replace-by-Fee, the wallet signed a valid replacement to the attacker's address.
Recovery here is hard, and it is worth being plain about why. The victim signed, so there is no unauthorized-transfer claim against a custodian, because there is no custodian. The wrongdoer is whoever ran the server, which makes this a subpoena problem before it is a litigation problem.
A Friend's Loan Repayment Flagged a Trader's Wallet
A Hyperliquid trader reported on October 26 that his wallet was flagged high risk after a friend repaid a loan through HTX, an exchange he says he has never used. The United Kingdom sanctioned Huobi Global S.A. on May 26 over services allegedly tied to Russia-linked entities including Garantex, which HTX disputes.
Sanctions screening is risk scoring, not adjudication. A vendor assigns a score, the platform acts, and nobody owes the account holder a hearing. There is no statutory appeal from a private venue's decision to stop serving you. The exposure most people underestimate is that taint travels a hop: you need not transact with a sanctioned entity, only receive funds from someone who did.
Bitcoin Slips Below $80,000 Before a Heavy Week
Bitcoin traded near $79,947 on October 26 after a session low of $79,332. CoinGlass recorded $154.23 million in liquidations over 24 hours across more than 62,000 traders, with longs accounting for $117.99 million. Spot Bitcoin ETFs saw $635.6 million in outflows on October 22 and $137.9 million on October 23. The Federal Reserve decides rates on October 28. Forced-liquidation disputes turn on whether a platform followed its own published margin terms, so anyone trading on leverage should preserve order history and margin notices as they happen.
How to Protect Yourself
Stop using retired deposit addresses the moment an exchange issues new ones, and verify the current address in the app rather than a saved note. If you run Electrum, upgrade to 4.8.3, connect only to a server you trust, and verify the full receiving address on your hardware device before signing, especially when bumping a fee. Attackers are matching the first and last four characters, so checking those is no longer enough.
If you have already lost funds, speed matters more than anything else. Tracing and freeze requests to exchanges and stablecoin issuers work best in the first hours, before funds are layered or cashed out. File with IC3 and your state regulator, preserve every transaction hash and support ticket, and get counsel involved early enough to send preservation demands while the assets are still identifiable.
At Coin Counsel, we work with individuals and businesses navigating the legal fallout of crypto fraud — whether you're a victim seeking recovery, a company facing regulatory scrutiny, or a project working to stay compliant in an increasingly complex legal landscape. The rules are evolving fast, and the cost of getting it wrong has never been higher. Contact us at coin-counsel.com to speak with a crypto-focused attorney today.
Disclaimer
This blog post is for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship between you and Coin Counsel or Franco Law PLLC. The legal landscape surrounding cryptocurrency is rapidly evolving and varies by jurisdiction. Do not act or refrain from acting based on information in this post without first consulting a qualified attorney. If you believe you have been the victim of crypto fraud, contact us at coin-counsel.com for a consultation.
