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MESSAGE _ENGLISH VERSION_ |
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Security Incidents Involving the b14g Protocol and Binance Exchange:
Company's Exposure and Impairment Write-Down of CORE Tokens The Management
Board of BTCS S.A., with its registered office in Warsaw _the "Company"_,
announces that on 31 October 2026, approximately 97 million CORE tokens
were transferred without authorization from the smart contracts of b14g,
an external dual-staking protocol operating within the Core ecosystem.
Following the incident, the protocol operator suspended withdrawals.
According to statements issued by Core DAO and b14g, the Core network, its
staking contracts, and Bitcoin staked through the protocol were not
compromised. The Bitcoin held by the Company _202.27 BTC as of 30
September 2026_ was not affected by the incident. Furthermore, in
connection with the security incident involving the Binance exchange on 29
October 2026, the Management Board confirms that the Company does not hold
any assets on that exchange and has no exposure to that incident. The
Company holds approximately 68.3 million CORE tokens, with a carrying
value of approximately PLN 6.05 million as of 30 September 2026
_representing approximately 7.6% of total assets_, of which approximately
90% are staked through the b14g protocol. According to preliminary
information received from the operator of the b14g protocol, approximately
30% of the CORE tokens held by the Company _approximately 20 million CORE_
may have been lost as a result of the incident. The remaining tokens
staked through b14g remain locked in the protocol's smart contracts
pending the resumption of withdrawals, for which no timeline is currently
known to the Company. The Company is verifying this information and will
disclose its final findings in a separate current report. The Management
Board has reviewed the Company's exposure to the Core ecosystem. Activity
on the Core blockchain has declined significantly. According to DefiLlama,
as of 1 November 2026, the total value locked _TVL_ in DeFi protocols on
Core amounted to approximately USD 3.3 million, compared with more than
USD 300 million in 2024, while daily trading volumes on Core's
decentralized exchanges amounted to only a few thousand US dollars. The
market capitalization of the CORE token is approximately USD 21 million,
and the Company's holdings represent approximately 4% of that
capitalization, making it impossible to dispose of the position without
materially affecting the market price. The Company is focusing its
operations on validator infrastructure and tokenization, including
validators on ZIGChain and Canton Network, as well as the memorandum of
understanding with CMCC Global SPC concerning the Liberty Bitcoin
Accumulation Fund, as disclosed in ESPI Current Report No. 29/2026, and
does not intend to make any further commitments to the Core ecosystem.
Taking into account _i_ the unauthorized transfer of a portion of the
Company's CORE tokens as a result of the incident _preliminarily estimated
at approximately 30%_, the lack of access to the remaining tokens staked
through b14g, and the absence of a timeline for the resumption of
withdrawals; _ii_ the decline in activity on the Core blockchain and the
lack of sufficient liquidity in the CORE token market to dispose of the
Company's holdings; _iii_ the decision to discontinue its involvement in
the Core ecosystem; and _iv_ Core Foundation's failure to fulfill its
obligations under the TSA agreement, as disclosed by the Company in ESPI
Current Report No. 27/2026, the Management Board decided on 2 November
2026 to recognize a full impairment write-down of all CORE tokens held by
the Company, reducing their carrying value to zero. The impairment
write-down will negatively affect the Company's financial result for the
fourth quarter of 2026 by approximately PLN 6.05 million _corresponding to
the carrying value of the tokens as of 30 September 2026_. The impairment
is non-cash in nature, does not change the number of tokens held by the
Company, and does not affect the Company's claims against Core Foundation
under the TSA agreement, which remain in force. The impairment write-down
will be subject to reassessment as of the reporting date. Any subsequent
recovery of access to the tokens, their disposal, or proceeds received
from the b14g protocol will be recognized in the financial results of the
period in which such events occur. The Company has reported its positions
to the operator of the b14g protocol and will disclose any material
developments in separate current reports. Legal Basis: Article 17_1_ of
MAR - Inside Information
Security Incidents Involving the b14g Protocol and Binance Exchange:
Company's Exposure and Impairment Write-Down of CORE Tokens
The Management Board of BTCS S.A., with its registered office in Warsaw
_the "Company"_, announces that on 31 October 2026, approximately 97
million CORE tokens were transferred without authorization from the
smart contracts of b14g, an external dual-staking protocol operating
within the Core ecosystem. Following the incident, the protocol operator
suspended withdrawals. According to statements issued by Core DAO and
b14g, the Core network, its staking contracts, and Bitcoin staked
through the protocol were not compromised.
The Bitcoin held by the Company _202.27 BTC as of 30 September 2026_ was
not affected by the incident.
Furthermore, in connection with the security incident involving the
Binance exchange on 29 October 2026, the Management Board confirms that
the Company does not hold any assets on that exchange and has no
exposure to that incident.
The Company holds approximately 68.3 million CORE tokens, with a
carrying value of approximately PLN 6.05 million as of 30 September 2026
_representing approximately 7.6% of total assets_, of which
approximately 90% are staked through the b14g protocol.
According to preliminary information received from the operator of the
b14g protocol, approximately 30% of the CORE tokens held by the Company
_approximately 20 million CORE_ may have been lost as a result of the
incident. The remaining tokens staked through b14g remain locked in the
protocol's smart contracts pending the resumption of withdrawals, for
which no timeline is currently known to the Company. The Company is
verifying this information and will disclose its final findings in a
separate current report.
The Management Board has reviewed the Company's exposure to the Core
ecosystem. Activity on the Core blockchain has declined significantly.
According to DefiLlama, as of 1 November 2026, the total value locked
_TVL_ in DeFi protocols on Core amounted to approximately USD 3.3
million, compared with more than USD 300 million in 2024, while daily
trading volumes on Core's decentralized exchanges amounted to only a few
thousand US dollars. The market capitalization of the CORE token is
approximately USD 21 million, and the Company's holdings represent
approximately 4% of that capitalization, making it impossible to dispose
of the position without materially affecting the market price.
The Company is focusing its operations on validator infrastructure and
tokenization, including validators on ZIGChain and Canton Network, as
well as the memorandum of understanding with CMCC Global SPC concerning
the Liberty Bitcoin Accumulation Fund, as disclosed in ESPI Current
Report No. 29/2026, and does not intend to make any further commitments
to the Core ecosystem.
Taking into account _i_ the unauthorized transfer of a portion of the
Company's CORE tokens as a result of the incident _preliminarily
estimated at approximately 30%_, the lack of access to the remaining
tokens staked through b14g, and the absence of a timeline for the
resumption of withdrawals; _ii_ the decline in activity on the Core
blockchain and the lack of sufficient liquidity in the CORE token market
to dispose of the Company's holdings; _iii_ the decision to discontinue
its involvement in the Core ecosystem; and _iv_ Core Foundation's
failure to fulfill its obligations under the TSA agreement, as disclosed
by the Company in ESPI Current Report No. 27/2026, the Management Board
decided on 2 November 2026 to recognize a full impairment write-down of
all CORE tokens held by the Company, reducing their carrying value to
zero.
The impairment write-down will negatively affect the Company's financial
result for the fourth quarter of 2026 by approximately PLN 6.05 million
_corresponding to the carrying value of the tokens as of 30 September
2026_. The impairment is non-cash in nature, does not change the number
of tokens held by the Company, and does not affect the Company's claims
against Core Foundation under the TSA agreement, which remain in force.
The impairment write-down will be subject to reassessment as of the
reporting date. Any subsequent recovery of access to the tokens, their
disposal, or proceeds received from the b14g protocol will be recognized
in the financial results of the period in which such events occur.
The Company has reported its positions to the operator of the b14g
protocol and will disclose any material developments in separate current
reports.
Legal Basis: Article 17_1_ of MAR - Inside Information
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RB-W_ASO: Incydenty bezpieczeństwa w protokole b14g i na giełdzie Binance: ekspozycja Spółki
oraz odpis aktualizujący wartość tokenów CORE
