Ethereum developers moved closer to Glamsterdam's next public testnet milestone this week, keeping Hoodi's October 26 activation on track while narrowing the scope of Hegotá. ACDC #189 declined four consensus-layer proposals and left withdrawal credentials pre-registration under review. Meanwhile, discussions around encrypted mempools continued, ZKsync reported faster Ethereum block proving, and Vitalik Buterin explored privacy-preserving AI agents. Beyond the protocol, regulators intensified scrutiny of crypto exchanges, hardware wallet supply-chain security faced renewed attention, and India's offshore crypto trading debate highlighted growing concerns about taxation and market access.

Catch up on last week's edition here.

This Week at a Glance

A. Regulation

• India's Offshore Crypto Trading Raises Tax Concerns: A new TKF report estimates that nearly 95% of India's crypto trading volume moved offshore during FY 2025–26. The analysis examines how India's cryptocurrency taxation framework may be encouraging offshore activity and potentially reducing domestic tax revenue.
• South Korea Blocks 27 Unregistered Crypto Exchanges: South Korean authorities moved to restrict 27 unregistered cryptocurrency exchange websites, including KuCoin, MEXC and BingX. The restrictions follow registration and anti-money-laundering compliance concerns.
• Dubai VARA Approves Kraken Parent Payward: Payward received Full Market Approval from Dubai's Virtual Assets Regulatory Authority, paving the way for Kraken's planned UAE expansion, including AED trading, staking, tokenized equities and institutional services.
• Coins[.ph] Faces Regulatory Scrutiny in the Philippines: Coins[.ph] reportedly faces a potential license threat amid an investigation into alleged transactions involving restricted offshore gambling operators.

B. Security

• CryptoBilis Ledger Scandal Raises Hardware Wallet Concerns: Ledger investigated an unauthorized hardware implant in devices sold through CryptoBilis. The implant could reportedly extract recovery phrases and transmit them over an LTE connection, raising concerns about wallet distribution security.
• Trezor Tightens Its Authorized Reseller Network: Trezor announced plans to reduce its authorized reseller network following supply-chain concerns. The company emphasized that it had found no evidence of its hardware wallets being compromised.
• Coinbase Explores Specialized AI for Fraud Detection: Coinbase is experimenting with fine-tuned AI models to improve fraud detection while reducing latency and operating costs. The initiative could allow employees to develop task-specific AI systems without building models from scratch.

C. Privacy

• Vitalik Buterin Tests Private AI Agents With Tor & zkAPI: Vitalik Buterin demonstrated a privacy-focused AI agent configuration combining Tor, zkAPI, cover traffic and local prompt rewriting. The experiment explores ways to reduce identity leakage and request tracking while acknowledging latency and traffic-correlation limitations.

D. Global

• ZKsync Reports Faster Ethereum Block Proving: ZKsync introduced Airbender Prime, reporting that a single GPU could prove 99% of 7,200 consecutive Ethereum mainnet blocks in under ten seconds. Vitalik Buterin emphasized that security and formal verification should become increasingly important as proving performance improves.
• Bitcoin ETFs Lose $679M as Wintermute Warns of Weakening Flows: Wintermute highlighted declining crypto market capital flows after significant withdrawals from Bitcoin and Ethereum ETFs. The report pointed to Treasury yields and sustained institutional demand as important factors for a potential recovery.
• Bitget Launches Jio Pre-IPO Perpetuals: Bitget introduced JIOUSDT pre-IPO perpetual contracts ahead of Jio Platforms' anticipated public offering, allowing traders to take derivatives positions tied to market expectations without owning shares.
• Unagi Assets Put Up for Sale After Liquidation: French Web3 gaming studio Unagi entered court-ordered liquidation, putting its NFT collections, gaming intellectual property, token-related assets and AI products up for sale.
• India's Stablecoin Premium Persists Despite Rupee Recovery: An EtherWorld analysis examined why digital dollars continued trading at a premium despite a stronger rupee. The report connects the gap to liquidity constraints, regulatory uncertainty and India's crypto market structure.

Ethereum Protocol

1. Ethereum Protocol Update: ACDC #189

   • Hoodi's Glamsterdam activation remains targeted for October 26, with client teams expected to prepare compatible releases following Sepolia's successful activation.
   • A proposed builder-onboarding race-condition fix was rejected for Glamsterdam, as introducing it would require disruptive changes to the existing testnet rollout. Application-layer workarounds remain the expected approach.
   • RowDAS was Declined for Inclusion, with developers citing limited client support and insufficient blob demand to justify adding the feature.
   • EIP-8359, concerning client-diversity reporting, was Declined for Inclusion after receiving limited support from client teams.

2. Encrypt The Mempool #011

   • Priority-section admission will use a binary validator-support threshold, with key publishers requiring at least 50% validator support rather than receiving graduated trust rankings.
   • Transaction ordering within the priority section will remain fee-based, preserving a mechanism for congestion management instead of sorting transactions by trust scores.
   • The top-of-block fee mechanism will be retained, maintaining an economic component in transaction prioritization.
   • The discussion emphasized limiting collusion risks, with fee-based ordering preferred over an approach that could concentrate ordering influence among highly trusted publishers.

3. L1-zkEVM Breakout #009

   • EIP-7709 advanced to Considered for Inclusion (CFI) at ACDE, removing the headers field from execution witnesses by routing BlockHash through the EIP-2935 contract.
   • Proof engine scope was narrowed to verification only in the consensus specifications, leaving proof generation and fetching as unspecified client responsibilities.
   • A consensus-spec refactor will reflect the narrower proof engine scope, ensuring the specification focuses on proof verification rather than prescribing generation or retrieval mechanisms.

4. FOCIL Breakout #044

   • FOCIL Devnet 1 will remain operational until Devnet 2 is ready, ensuring testing continuity and preventing a gap between devnet deployments.

Ethereum Standards Updates

Ethereum standards recorded 13 Draft entries, two Review transitions, and one ERC reaching Final. Hegotá discussions saw four proposals declined for inclusion, while EIP-8205's decision was deferred.

Glamsterdam preparations continued ahead of Hoodi's planned October 26 activation. Editor reviews, emerging AI-agent standards, and upcoming Last Call deadlines shaped the week's activity.

Read the full update on EIPsInsight.

Client & Infrastructure Updates

• Execution Layer:

  • Nethermind 2.2.0 - NEW RELEASE
  • Geth 1.17.8
  • Erigon 3.7.1
  • Besu 26.10.0 - NEW RELEASE
  • Reth 2.7.0
  • EthereumJS 10.1.3

• Consensus Layer:

  • Teku 26.10.1 - NEW RELEASE
  • Nimbus 26.10.1 - NEW RELEASE
  • Prysm 7.3.0 - NEW RELEASE
  • Lodestar 1.50.0 - NEW RELEASE
  • Lighthouse 8.2.3

Podcasts

1. Cypherpunk Owns $500M of Zcash and 18% of Its Hashrate | CIO Will McEvoy : Will McEvoy of Cypherpunk Technologies joins David Hoffman to discuss Zcash's growing appeal, institutional privacy demand, the economics of cryptocurrency mining and the company's ambition to accumulate 5% of Zcash's supply.
2. Can AI Break Cryptography? What the Experts Actually Think: Stanford cryptographer Dan Boneh joins Eddy Lazzarin, Justin Thaler and Liz Harkavy to examine whether AI-assisted mathematical discoveries could threaten encryption, cryptocurrency wallets and digital security.

Upcoming Events

• EDCON 2026: Oct 17–18 | Kuala Lumpur
• ETHVenice 2026: Oct 21 | Venice
• Encode London: Oct 23–25 | London
• Ethereum Cypherpunk Congress #3: Nov 2 | Mumbai
• Devcon 8: Nov 3–6 | Mumbai
• Pragma Mumbai: Nov 4 | Mumbai
• ETHGlobal Mumbai: Nov 5–7 | Mumbai

Jobs

• Offchain Labs: Senior Backend Engineer
• Rain: Software Engineer – EVM
• Jito Labs: Senior Security Engineer, Product
• Jump Crypto: Crypto Production Engineer
• MoonPay: Technical Talent Partner

Community Spotlight

Ethereum's EIP Hub Prepares for Devcon 8 in Mumbai

Ethereum's standards community is preparing to bring protocol discussions closer to developers, researchers and newcomers at Devcon 8 in Mumbai. The EIP Hub will provide a dedicated space for discussions about Ethereum Improvement Proposals, protocol governance, core development, application standards and enterprise adoption.

Its four-day program will cover the EIP process and governance, core Ethereum protocol development, application standards and ERCs, and enterprise Ethereum. The initiative aims to make Ethereum's standards process more accessible while encouraging direct participation from developers, students and the broader community.

Explore the EIP Hub

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