Bitcoin briefly fell below $60,000 on Friday, "extending its weekly loss to nearly 20% and threatening to fall below $59,000," reports CoinDesk. Crypto was also hit by a 40%-plus plunge in Zcash after Shielded Labs disclosed a years-old bug that could have allowed undetected counterfeit ZEC creation. From the report: Now, with stocks in plunge mode -- the Nasdaq down nearly 4% on Friday -- bitcoin finds itself perfectly correlated. "Short term, Bitcoin feels like swallowing broken glass," wrote Jeff Swanson Friday. "The chart goes up. It goes down. It makes grown men cry into their Robinhood accounts and CNBC anchors smugly declare the funeral, for the eleventh time." "Here's what uncomfortable people don't understand: the discomfort is the yield. Every paper-handed panic seller is handing their future to someone with a longer time horizon and a colder storage device." [...] Earlier, Shielded Labs, a nonprofit developer on the privacy token system, disclosed a critical vulnerability in Zcash's (ZEC) Orchard privacy pool that could have threatened the integrity of the token's supply. The vulnerability, if exploited, could have allowed an attacker to create an unlimited number of counterfeit ZEC tokens, completely undetected. "Think of it as someone secretly gaining access to the Federal Reserve's dollar printing press, except in this case, even the Fed wouldn't be able to tell these extra dollars were printed," wrote Omkar Godbole. Importantly, the vulnerability was discovered with help from Anthropic's recently released Opus 4.8 AI model, raising difficult questions for the entire crypto industry. More to come on that. ZEC is now down 42% over the past 24 hours. On Wednesday, the Zcash Foundation said: "The vulnerability was caught before any known exploitation occurred. There is no evidence of unauthorized value creation. Zcash's turnstile mechanism (which tracks the total ZEC balance across all value pools) confirmed that the total supply remained intact throughout. User privacy was not affected. Sapling and transparent transactions continued operating normally throughout the incident."

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Morgan Stanley is adding crypto trading to E*Trade, with a pilot now underway and a broader rollout planned for the platform's 8.6 million customers later this year. The bank is reportedly undercutting rivals with a 50-basis-point trading fee as it bets traditional finance and DeFi will converge. "By contrast, Robinhood Markets' (HOOD) fees start at 95 bps, Coinbase Global's (COIN) begins at 60 bps, and Charles Schwab (SCHW) will charge 75 bps," notes Seeking Alpha. Morgan Stanley's head of wealth management, Jed Finn, told Bloomberg: "This is much bigger than trading crypto at a cheaper rate. In a way, the strategy is disintermediating the disintermediators."

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Ancient Slashdot reader Alain Williams shares a report from the BBC: The Trump family's World Liberty crypto venture is being sued by one of its billionaire backers over allegations of extortion. Justin Sun has accused World Liberty of an "illegal scheme" to seize his WLFI tokens, a cryptocurrency issued by the company. Sun alleges the firm, co-founded by U.S. President Donald Trump and his son Eric Trump, has "frozen" all of his tokens and stripped him of his right to vote on governance issues. [...] Sun alleged that those running World Liberty, including another co-founder, Chase Herro, are using it as a "golden opportunity to leverage the Trump brand to profit through fraud." In his complaint, filed on Tuesday in a San Francisco federal court, Sun argues that initial promises to give token-holders the option to trade the currency in future "were false and misleading." While the tokens at large became tradeable, Sun said World Liberty has blocked him from being able to sell a single one, and is now threatening to "burn" his - deleting them entirely. WLFI said in a post on X: "Does anyone still believe @justinsuntron? Justin's favorite move is playing the victim while making baseless allegations to cover up his own misconduct. Same playbook, different target. WLFI isn't the first. We have the contracts. We have the evidence. We have the truth. See you in court pal."

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