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Circle Is Building Its New Blockchain to stop Quantum Attack

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How Circle settled $68M in minutes using its own USDC rails

Circle’s Layer-1 blockchain Arc will launch at mainnet with an opt-in post-quantum signature scheme protecting users’ wallets from day one, as the USDC issuer warns that Q-Day could arrive by 2030 or sooner.

Summary

  • Arc will debut with a post-quantum signature scheme at mainnet launch, giving users the option to create quantum-resistant wallets without a forced network-wide migration
  • Circle warned that adversaries may already be stockpiling encrypted data to decrypt later, and that Q-Day could arrive by 2030 or sooner, citing recent research from Google and Caltech
  • The blockchain has been running on public testnet since October 2025, with USDC serving as the native gas currency; the quantum roadmap covers wallets, private state, validators, and infrastructure

Circle’s Layer-1 blockchain Arc will debut at mainnet with an opt-in post-quantum signature scheme, making it one of the first blockchains designed from the ground up to withstand quantum computing threats. The announcement accompanied a detailed security roadmap published to the Arc blog this week.

Arc has been live on public testnet since October 2025, with Circle’s USDC as the native gas currency. USDC carries a market cap of roughly $77.5 billion, second only to Tether among stablecoins, and is the asset at the center of Arc’s institutional positioning.

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At mainnet, users will be able to choose a signing method that future quantum computers cannot break, according to the Arc roadmap. The approach is deliberately opt-in, meaning no forced migration, no network-wide reset, and no assumption that every wallet or software stack will need to adapt immediately. Circle framed this as a practical path for institutions to begin protecting assets now, without disrupting existing developer tooling.

“Quantum resilience cannot live only in research papers, exploratory pilots, or distant roadmap slides. It has to show up in the infrastructure,” Circle said in its announcement.

Arc’s sub-second block finality also limits the attack window. In a so-called short attack, a quantum computer would need to derive a private key during the brief period between when a public key is exposed during a transaction broadcast and when the transaction is finalized. At under one second per block, that window is narrow.

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A Three-Phase Plan Covering the Entire Stack

Circle’s post-quantum plan covers more than wallet-level protections. The near-term phase introduces quantum-resistant signatures at mainnet launch. The mid-term phase extends those protections to private balances, confidential payments, and recipient data, ensuring institutional financial activity stays shielded as quantum capabilities advance. The long-term phase targets validator authentication and off-chain infrastructure, including cloud servers, hardware security modules, and encrypted connections between nodes.

As crypto.news reported, Google recently moved its own post-quantum encryption deadline forward to 2029, citing faster hardware progress and improved error correction. Researchers from Google and the California Institute of Technology have warned that functional quantum computers capable of breaking existing cryptographic standards may arrive sooner than previous estimates suggested.

The Risk Is Already Partially Here

Circle pointed to two converging threats driving the urgency. The first is the eventual ability of quantum systems to forge transaction signatures directly. The second is already active: NIST has flagged “harvest now, decrypt later” tactics, where adversaries collect and store encrypted data today, intending to crack it once sufficient quantum capability exists.

“Long-term cryptographic durability is a baseline requirement that must be accounted for in infrastructure decisions being made today,” Circle said, directing its message explicitly at banks, fintechs, and enterprise platforms building on stablecoin infrastructure.

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SEC close to putting out ‘reg crypto’ for fundraising questions, Chair Atkins says

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SEC close to putting out 'reg crypto' for fundraising questions, Chair Atkins says

NASHVILLE, Tenn. — The Securities and Exchange Commission is close to proposing a “regulation crypto” fleshing out its approach to overseeing the crypto industry and drawing lines between transactions that might be securities and where they aren’t, the agency’s head said Monday.

SEC Chair Paul Atkins said the commission’s new reg crypto is in front of the White House Office of Information and Regulatory Affairs, meaning it’s one step away from being published. This rulemaking is focused on the Securities Act of 1933 and will address fundraising and startup exemptions, among other issues, he said Monday at an event hosted by Vanderbilt University and the Blockchain Association.

He told CoinDesk after his question-and-answer session that the SEC also intends to put out its long-awaited innovation exemption soon.

“We’d love to have reactions and everything else,” he said. “It’s not a rule as such but obviously we need to know how it’s functioning and if people have problems with it or not.”

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One aspect to this exemption, he said, is that it wouldn’t disadvantage incumbents and focus solely on startups.

“We want people really to experiment within [that] framework,” he said.

Midterm watch

At multiple points during his talk, Atkins pointed to Congress’s role, saying that his agency’s rulemaking process was well underway despite whatever Congress may do.

“I think we have enough of a runway now, even notwithstanding what may happen in the midterms — although I really still want a friendly Congress obviously — they can throw tacks on the road in front of our tires but they’re not going to really slow us down.”

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Atkins also said the audience needed “to be engaged in this upcoming election,” pointing to Senator Bernie Moreno as an example.

“To have Congress really veer off track is not going to any of us any good, and it’s going to put a lot more questions into the future because people then just have ‘oh gosh, maybe this is again a passing phase,’” he said. “We’ve got to make sure that your friends are in Congress. I think you saw how that really paid benefits in the last election.”

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Did Japan’s PM Actually Back the Memecoin Bearing Her Name?

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Japan’s SANAE TOKEN saga has entered a new phase, with fresh media reports alleging the prime minister’s office knew more than it admitted. But for crypto markets, the bigger story is what happens next in Tokyo’s legislature.

The political noise and the regulatory signal are arriving at exactly the same time.

How the Token Unraveled

SANAE TOKEN launched on Solana on Feb. 25, as BeInCrypto reported. NoBorder DAO — a community led by serial entrepreneur Yuji Mizoguchi — issued it as part of a “Japan is Back” initiative, with Takaichi’s name and likeness on the project website. The token surged over 40x on launch day before Takaichi’s March 2 denial triggered a 58% crash.

The FSA opened a probe into NoBorder DAO for operating without a crypto exchange license. The token’s operators halted issuance shortly after.

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The SANAE TOKEN website describes the token as “not just a meme, but the hope of Japan,” alongside a portrait of Prime Minister Takaichi and a timeline of her political career. Source: japanisbacksanaet.jp

Japanese Tabloid Reports Secretary’s Approval

Weekly Bunshun, a Japanese tabloid known for breaking political and celebrity scandals, says developer Ken Matsui told the magazine his team informed Takaichi’s office that the project was a crypto asset. That directly contradicts her March 2 denial. Takaichi said neither she nor her office had been told anything about the token.

The publication says it obtained audio recordings of Takaichi’s chief secretary over a period of more than 20 years, reportedly describing the project favorably. Another Japanese online media reported that Takaichi’s office had not responded to media inquiries on the matter as of Tuesday. Takaichi has held no press conference since February 18, when her second cabinet was inaugurated.

The political dimension remains unresolved. What matters for crypto is whether the scandal accelerates — or complicates — Japan’s regulatory overhaul.

FSA Bill Changes the Rules

Japan’s Financial Services Agency submitted its landmark crypto reform bill to parliament this week, Asahi Shimbun reported. The legislation moves crypto from the Payment Services Act into the Financial Instruments and Exchange Act, reclassifying digital assets as financial instruments for the first time.

As BeInCrypto previously reported, the maximum prison term for unlicensed crypto sales would triple to 10 years, with fines rising from ¥3 million to ¥10 million. The SESC gains criminal investigation powers it has never held over crypto operators. The SANAE TOKEN case was explicitly cited in Nikkei’s reporting on the legislative push.

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The bill would also void transactions with unregistered operators by default, making it easier for investors to seek refunds — a provision directly relevant to the SANAE TOKEN case.

The post Did Japan’s PM Actually Back the Memecoin Bearing Her Name? appeared first on BeInCrypto.

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Every 5 Minutes: Korea’s New Rule for Crypto Exchanges

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South Korea’s financial regulator has ordered all crypto exchanges to verify user asset balances every five minutes, following a massive overpayment incident that shook market confidence earlier this year.

One botched reward payout exposed systemic cracks across the entire industry.

What Triggered the Rules

In February, Bithumb accidentally sent 2,000 BTC per person instead of 2,000 Korean won ($1.40) during a promotional event. The error amounted to roughly $42 billion in misallocated crypto. The Financial Services Commission (FSC) launched emergency inspections across all five major Korean exchanges immediately after. What they found went far beyond a single human mistake.

Most exchanges were only reconciling their books once every 24 hours. Three had no automatic kill switch to halt trading when discrepancies appeared. Four lacked multi-step approval systems for high-risk manual transactions. Two exchanges hadn’t even separated their general accounts from high-risk transaction accounts — a basic safeguard.

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What Exchanges Must Now Do

The FSC announced a three-pillar reform package on April 6. Exchanges must run automated balance checks every five minutes, with alerts and automatic trading halts triggered by major mismatches. Monthly external audits replace the previous quarterly schedule, and public disclosures must now include asset-by-asset blockchain holdings rather than a simple coverage ratio.

For manual, high-risk transactions such as event payouts, exchanges must use separate accounts, deploy validity-check systems that automatically reject mismatched inputs, and require cross-verification by a third party before execution.

The FSC will also require exchanges to appoint dedicated risk management officers and establish risk management committees — standards already expected of traditional financial firms. Compliance checks move from annual to twice-yearly, with results reported to regulators.

DAXA, the industry body, will complete self-regulatory amendments this month, with systems built out by May. Key provisions will feed into Korea’s forthcoming second-phase Digital Asset Act.

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The post Every 5 Minutes: Korea’s New Rule for Crypto Exchanges appeared first on BeInCrypto.

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Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

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Chaos Labs Leaves Aave Due to Budget, Risk Disagreements

Chaos Labs has parted ways with the Aave ecosystem after serving as the crypto lending protocol’s main risk service provider for three years, citing a budget dispute and disagreements over how Aave should manage risk.

“This decision was not made in haste,” Chaos Labs founder Omer Goldberg said in a post to X on Monday. “We worked in good faith with DAO contributors. Aave Labs was professional and supported increasing our budget to $5m to retain us. However, we are leaving because the engagement no longer reflects how we believe risk should be managed.”

Source: Omer Goldberg

Aave Labs CEO Stani Kulechov said that Chaos didn’t depart on bad terms, but claimed that Chaos pitched a proposal seeking to become the sole risk provider and thus force out other partners — a compromise Aave wasn’t willing to accept.

Chaos played a key role in Aave’s back-end infrastructure, from pricing loans and managing risk in the Aave V2 and V3 markets since November 2022, during which Aave’s total value locked rose fivefold to $26 billion.

Risk has been a major talking point in the Aave community after a user lost $50 million in a trade while interacting with Aave’s interface on March 12. The following week, Aave said it would introduce an “Aave Shield” protection feature to deter users from high-risk trades.

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As for Chaos’ departure, Goldberg said there became an increasing misalignment over how the parties thought risk should be managed. He noted that some Aave contributors had left, raising its workload, while also arguing that Aave V4’s expanded functionality introduced additional operational and legal risks that fell on Chaos’ shoulders.

“While Aave Labs is optimistic about a swift migration to V4, history suggests these transitions take months and even years,” Goldberg said. “Until V4 fully absorbs V3’s markets and liquidity, both systems need to be operated and managed simultaneously. The workload during the transition doesn’t halve. It doubles.”

Weighing the risk of a protocol failure, Goldberg said, “There is no regulatory framework, no safe harbor, and no settled law that answers the question of what a risk manager or curator owes when a protocol fails. If things work, the work is invisible. If things break, the blame is not.”

As such, “We are walking away from a $5 million engagement,” Goldberg said.

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Chaos wanted Aave to boot LlamaRisk, Chainlink: Kulechov

Aave Labs CEO Stani Kulechov told a slightly different story, stating that Chaos wanted to be the sole risk manager and use its price oracles instead of Chainlink’s.

Following that request would have forced Aave to push out its other risk protocol partner, LlamaRisk, and thus abandon its two-layer economic risk model.

Related: DeFi lender Aave launches on OKX’s Ethereum L2, X Layer

Kulechov added Aave was unwilling to integrate Chaos-built price oracles, citing Aave’s “track record” with Chainlink’s services, which its “users are currently more comfortable with at scale.”

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He also said Chaos was already “exploring winding down its risk consultancy services,” and that Aave had offered to double its payment to $5 million to retain them.

Cointelegraph reached out to Chaos Labs for comment.

Kulechov noted that Chaos’ departure hasn’t disrupted the Aave protocol, its smart contracts, token listings or network integrations.

Moving forward, Aave said it “will work closely with LlamaRisk to ensure a smooth transition” and maintain its two-layer economic risk model. 

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Source: LlamaRisk

Chaos’ departure comes amid a protocol-wide feud over how much funding and revenue control Aave Labs should receive versus Aave’s decentralized autonomous organization.

Despite the internal issues, Aave crossed the $1 trillion mark in cumulative lending volume in late February, marking a first in the DeFi industry.

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