Morgan Stanley Launches Crypto ETFs as AI and Security Risks Rise

Investment bank Morgan Stanley launches new ETFs for Ethereum and Solana. A Bitcoin wallet in the Apple App Store was fake. Claude Mythos cracks cryptography for quantum computers.

Bitcoin was trading at around $64,000 on Wednesday morning, up just under 1 percent for the day

Bitcoin ETFs saw a $50 million outflow of capital on Tuesday.

Apple promotes its largely closed ecosystem with high security. However, this promise appears to have been broken when it comes to the App Store for iPhones. Three users in the US are suing Apple after downloading and setting up a Bitcoin wallet through the official Apple App Store, which turned out to be malicious software. The lawsuit states that the three victims lost a combined total of approximately $1.8 million worth of Bitcoin.

MacRumors first reported the case and has since learned from Apple that the Sparrow Wallet app and its imitators have been blocked. The plaintiffs claim to have entered their BTC seed phrase into the app, after which their Bitcoin balances were stolen. The matter is further complicated by the fact that an uncompromised version of the Sparrow Wallet exists for Apple’s desktop operating system, macOS.

Its developer, Craig Raw, contacted Apple back in 2024 to complain about imitators and copyright infringement. However, this had no effect, Raw writes on X. Whether Apple will compensate for the Bitcoin thefts remains unclear.

Ethereum was trading at just over $1,900 on Wednesday morning, up around 1.5 percent for the day. Ethereum ETFs reported a $15 million outflow of capital on Tuesday.

Morgan Stanley Expands Crypto Offerings with Ethereum and Solana ETFs

US investment bank Morgan Stanley is launching two new ETFs for Ethereum and Solana. It has been offering a Bitcoin ETF since April, which attracted approximately $400 million in its first few months. Morgan Stanley’s Ethereum ETF, like its Bitcoin ETF, aims to win over investors with the currently lowest fees of 0.14 percent.

Bloomberg analyst Eric Balchunas sees this as a positive sign for the ETF’s success, pointing to Morgan Stanley’s 16,000 financial advisors, who manage $7 trillion, as a distribution channel. The new ETFs will also participate in Ethereum and Solana staking, respectively, and will distribute 100 percent of the earnings to investors. Initial results remain to be seen.

Today’s winner is Lighter (LIT) with a 10 percent gain. The DeFi project is connected to the Robinhood Chain, where Lighter also organizes stock trading as a cryptocurrency exchange.

The biggest loser of the day is LayerZero (ZRO), down 9 percent. The project was centrally involved in the Kelp Hack in April, and LayerZero has since lost a handful of key partners.

The crypto sentiment barometer remains in the “fear” zone; the unresolved Iran war is weighing on the global economy and politics.

The AI ​​model Claude Mythos made headlines months ago for its exceptional ability to detect security vulnerabilities. Dubbed “Claude Fable for everyone,” it was temporarily blocked by the US government. Now, Claude Mythos is making headlines again, as Anthropic, the company behind the artificial intelligence, explains in a blog post.

The issue concerns cryptography and should therefore also give Bitcoin, Ethereum, and other cryptocurrencies pause. Specifically, the AI ​​has cracked a method called HAWK, which was previously considered secure even in a future with quantum computers.

Anthropic estimates the cost of deploying the AI ​​at just $100,000. While HAWK isn’t used in any major cryptocurrency, the results show that even solutions designed to mitigate the risks posed by quantum computers for Bitcoin, Ethereum, and other altcoins could create a false sense of security. Claude Mythos will soon be superseded by even more powerful AI models.

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(Featured image by Sven Piper via Unsplash)

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