Biggest hack in history? Start of DEX era?

 The biggest news today, just as people are heading out for the weekend, was the shock sudden halt of deposits and withdrawals by the world's biggest centralised exchange (CEX), Binance. There is a reported $6.3bn security exploit that led to the world's biggest crypto loss (Article 1).

To give some context, Binance is #1 in CEX trading activities, and takes a lion's share of 38% of the top exchange volumes:

For the techy (or concerned account holders, who may inadvertently forgotten to move their assets offline to cold wallet - remember, always self custody!), you can monitor the latest whereabouts of the stolen funds (according to one tracker) at the below link:

link: https://arkm.com/explorer/entity/binance-hacker-2​

Not only is this Binance hack the biggest in monetary terms, it is also the biggest in terms of its proportion relative the market cap of bitcoin at the time:

Above the biggest six hacks are in bold for easy identification. Interestingly Binance is not the first time to be hit, which brings up the question: why are there not more people self custodying their cryptos?

No wonder the market is in a nervous crash today, with most large coins down up to 5% at the time of writing:

However, it is worth noting that once again, the privacy coins (XMR, ZEC) in the top 10 are the only ones making gains (aside from TRX which benefits from transaction spike as capital flee to stablecoins)... For our recent research on the rise of the privacy coins, please see here and here.

Even cold wallet supply chain may be at risk

However, for even the diligent coin holder, compromises in the cold wallet supply chain can also bring risks, as the recent Ledger hack event highlights - in fact as of now, further damage is reported (see Article 2: tampered Ledger hardware wallets with malicious hardware implants caused at least $2.7 million in losses).

This is why it is worth savvy crypto enthusiasts to look into an alternative system, called Multi-party computation (MPC), and a series of six articles on its benefits are contained in the links in Article 3 below. Disclaimer: your correspondent is neither connected, nor invested in this project, judge it for yourself after reading if this is something that could someday become the new standard of wallet technology.

3 core pillars: open source, permissionless, decentralisation

This current incident brings us back to the principal of responsible and sovereign asset safeguarding - do not trust centralised blackboxes - Binance platform is one that is not open source, not decentralised, and requires log in permission to access. In fact it breaks all the rules about the 3 core pillars on which the crypto ecosystem is built!

Of course, most fiat monetary system are built on the same risky foundations (except gold and cash). This is why even when centralised players step in to prevent hacks like this, it is handing your security from one risky party to another (see Article 4 on how the two big stablecoin issuers are helping to stem the flow). This is exactly the same reason traders should look to decentralised stablecoins going forward to avoid identical risk as they are under when trading through CEXes.

We fully expect the next mega trend to be not only be an increasing move from centralised fiat to crypto finance, but a rapid transition from centralised crypto to privacy crypto (including stablecoins). This is all going to be driven by bankrupt governments increasingly tax hunting their populace's hard earned money - the way in the ancient past when people buried their gold, and in current era when they hide cash under their mattress. The future will be the peoples of the world shielding their wealth from prying eyes in privacy coins.

As a result, could be an explosion of decentralised exchange (DEX) trading (which may well be helped by today's hack when more traders lose faith in CEXes):

Coupled with an eventual turn in the crypto cycle, we could see a 3-4x increase in absolute DEX trading volumes in the next year or two...

Conclusion

The old adage of 'Not your keys, not your coins' stays very much relevant, to which we should add 'Not decentralised, permissionless, or open source? Not your money!'

Article 1: Binance halts withdrawals after $6.3bn hack

Article 2: Singapore Police Report $2.7 Million in Tampered Ledger Wallet Losses

Article 3: The 6 vultisig articles

One Moment of Randomness ​

​What Randomness Actually Is ​​

​Anatomy of a Seed ​​

​The Bolt-On Defenses ​

​The Wallet Without a Seed ​

​Self-Custody Was Never the Problem ​

Article 4: Binance Hack: Tether (USDT) and Circle (USDC) Freeze $1.8B in Stablecoins Linked to Suspected Wallets

BMM Greece - adios and efcharistó to our beloved Athens

Grexit Theme a strong performer

Long term readers may recall how we started studying the oversold Greek property market back in 2015-6 for a possible reversal bounce. Thanks to the confidence and trust of a small band of believers, we launched on this investment theme starting 2017, and the market has been very much a one way rising streak for us: 

We first started buying in 2017 and first began taking profit in 2023 (slightly early but not a bad call given the still bloated bureaucracy dogging some of our exits - a story for another time!). In USD terms we also caught the bottom of the cycle (red line below), and began selling when prices exceeded the GFC peak in Euro terms (blue):

Given the brewing of another bigger sovereign debt crisis in Europe, and the worsening geopolitical outlook (Greece could perversely benefit as a fringe region and receive fleeing capital from neighbouring conflict jurisdictions, so may not be all bad), now is a time to close out this theme, until the coast is clear for us to revisit Greece next cycle.

Relative winner too, not just absolute gains

We are happy to also see how the Greek market gained significantly more than many mainstream property peers from the 2017 bottom to now, eg. Athens prices are up 153% vs HK:

Against the a favourite investment of Hongkongers - London - Athens also outran by 126% in the same period:

The only exception is our current top favoured destination - Perth - Athens peaked (coincidentally when we started disposing in 2023) when we began going overweight W Australia in a big way, which has now outperformed Athens some 30%:

From frog to prince? How Greece looks now...

Macro conditions are better but probably not sustainable enough going forward, because on many factors, Greece's recoveries are not strong enough to lead to long term continued improvements:

a) debt recovery did not reach a self balancing level before global ZIRP has turned into high interest rate environment:

Despite refrained govt spending, debt levels have still been rising (blue line below), and although GDP growth has caught up since 2020, the gap remains too large to close:

b) still large trade deficit to sustain balance of payment improvements:

c) demographic headwind remains strong - despite recent spike in immigration (red line below), the ageing population and accelerating negative natural growth rate (blue line) will pose huge challenges for productivity.

Further immigration momentum is now curtailed due to govt raising thresholds (eg the Property transfer tax backlash, see Article 4), and potentially China's shutting of emigration routes which has provided the largest group of migrants to date (see Article 1 - How Chinese investors quietly transformed Athens – one visa at a time).

The main source of immigrants are currently tax refugees (see Article 3 - Will the last millionaire to quit socialist Britain for sunny, low-tax, Thatcherite Greece please turn out the eco-lightbulbs), but local supply challenges may continue to pressure govt to close the gates further (see Article 2).

Conclusion

So we are glad we have captured this rewarding and culturally most enriching jouring, but for the near future, it is adio (Αντίο) Athena, and thanks for all the fish...

Sovereign crisis - France blow out right on cue - chartporn 3

 

The recent French riots is but the tip of the iceberg in what could spiral out of control in the 2nd largest economy in the EU, as we have aluded to for some time now. The next big crisis will be from sovereign bonds, and France is indeed leading the charge (see here). More graphically, the debt pile is now much higher than even the USSR at the time it broke up:

Europe faltering on all fronts

The woes in Europe does not stop at the English Channel - as indicated in the how HSBC may be caught in a rising tax trap (see Article 7), UK is also facing some severe fiscal challenges and tax hikes may be the only solution, which will surely weaken the tax base even further.

And Germany's continuous decline in manufacturing output (Article 1) could further undermine investor confidence when any bad statistic hits the wires next. All major economies are now in a spiralling interest cycle, and any default by a weak payer could trigger the next contagion:

On top of all this, when more central banks next hike policy rates, the momentum could accelerate in long bond yield increases:

  Fed – further 50bp of Fed hikes expected
  RBA – risk of further tightening this year
  ECB - 25bp hike expected by year end
  BoE – a 25bp hike by year end
  BoC - expect to lift 25bp in both December and March

While some banks may be advocating long bonds at this juncture (below chart shows massive long bets on bonds right now), may be due to myopic focus of very short term trading patterns, the mega multi-decade turning point upon us could swiftly sweep all longs into big losses, so beware of who you listen to...

Other factors to exacerbate rate pressures

There are some truly worrying developments all over the place that suggest inflationary pressures will not ease, for example, Supertanker Rates Soaring To Near Record $1 Million A Day, adding cost of oil and bulk commodities being shipped (Article 2), and even in the US, diesel prices are reaching new highs:

Deglobalisation / trade fragmentation add headwinds

As govts lose people's confidence (eg Scottish, Welsh and Northern Irish leaders meet to plan break-up of United Kingdom, Article 3), separatist movements is now clearly on the march, increasing trade and investment friction, further adding to inflationary pressures. The next one to watch will be the Alberta vote to leave Canada:

Meanwhile increasing temptation to add sanctions will further disrupt global supply chains, as Trump signed the Russia and Iran Sanctions Bill (Article 4)...

US should be safer, private sector in better shape, but hyperscalers...

Although the US debt situation is severe (most of 2026 rollover is already on short duration, and likely see some coupon inflation soon, see chart below), the likely blow up first shot will be fired in Europe or Japan, or some other fringe economies.

We continue to see the pandemic to be centred on public sector, as for the first time in the past 70 years, govt debt is by far the biggest elephant in the room:

Also worth staying vigilant is how the new bubble of AI may be pricked given how extended the euphorial rises have become, and of course with it all the hundreds of billions of AI related debt issued of late:

Risk of false flags rising

When govts lose control, the temptation rises to create false flags to divert attention to 'external enemies'; the institution of emergency conditions may also conveniently defer or cancel elections in which current politicians in power could dodge the unavoidable losses facing them. The telltail signs are now becoming quite obvious:

- Poland's prime minister warns of Russian 'accidental' attacks on Ukraine's allies (Article 5);

- Moscow Sends Nuclear Warning to NATO as Tensions Rise in the Baltic (Article 6)

So many things can go wrong, and some of them catastrophically... all we can hope is to be prepared and safeguard our own immediate circle of care. Hope our fears of the bad outcomes are overly pessimistic, it still does not make the case for preparation invalid.

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Article 1: Who backstops the backstop?
https://bondvigilantes.com/blog/2026/09/who-backstops-the-backstop/

Article 2: Mideast Chaos Sends Supertanker Rates Soaring To Near Record $1 Million A Day
https://www.zerohedge.com/energy/mideast-chaos-sends-supertanker-rates-soaring-800000-day

Article 3: Scottish, Welsh and Northern Irish leaders meet to plan break-up of United Kingdom
https://www.telegraph.co.uk/politics/2026/09/13/irish-scots-and-welsh-leaders-meet-to-plot-break-up-uk/

Article 4: Trump Signs Russia and Iran Sanctions Bill
https://www.theepochtimes.com/us/trump-signs-russia-and-iran-sanctions-bill-6089946

Article 5: Poland's prime minister warns of Russian 'accidental' attacks on Ukraine's allies
https://www.npr.org/2026/09/18/nx-s1-5973265/poland-nato-russia

Article 6: Moscow Sends Nuclear Warning to NATO as Tensions Rise in the Baltic
https://www.themoscowtimes.com/2026/09/30/moscow-sends-nuclear-warning-to-nato-as-tensions-rise-in-the-baltic-a93828

Article 7: 滙控恐要進貢倫敦 再非收息首選
https://www.hkej.com/dailynews/article?id=4535013