Financial Freedom Report #132
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- GLOBAL NEWS
- RECOMMENDED CONTENT
- BITCOIN AND FREEDOM TECH NEWS
- BITCOIN RECOMMENDED CONTENT
Welcome to this week’s Financial Freedom Report.
In Syria, the transitional government replaced the Assad-era pound, which lost more than 99% of its value since 2011. The new pound removes two zeros from the old currency, but the process has created new barriers for Syrians holding old banknotes outside the formal economy, especially those who are unbanked, far from Damascus, or reliant on cash.
In Bitcoin coverage, the hardware wallet manufacturer Coinkite confirmed that Coldcard wallets generated recovery phrases with dangerously low entropy beginning in March 2021. The flaw made recovery phrases possible for attackers to guess, even when users had never exposed them or connected their device to the internet. MK3 users should move funds immediately to a new wallet, unless they rolled dice more than 100 times during the entropy process. Out of an abundance of caution, users of any kind of Coldcard hardware wallet device should move funds to a new wallet as soon as possible.
This episode highlights the risks of AI-based attacks, and also AI-based defense. In the wake of the exploit, a “red team” including several HRF allies and grantees has spun up a system to use frontier open-weight AI models to scan the codebases of Bitcoin projects for bugs, helping generate a more secure ecosystem for the protocol and its various applications.
Finally, we include a new essay by Frank Corva on freedom tech in South and Southeast Asia, covering India’s crackdown on Bitchat and Thailand’s growing Bitcoin education ecosystem, underscoring the increasing importance of freedom tech as a response to expanding digital repression worldwide.
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GLOBAL NEWS
Syria | Old Banknotes Lose Legal Tender Status
Syria’s transitional government is replacing the Assad-era pound to rebuild confidence in a national currency that lost more than 99% of its value between 2011 and 2025. The new Syrian pound removes two zeros from the old currency’s face value, meaning 100 old pounds are exchanged for one new pound. The central bank reported that roughly 80% of old banknotes have already been exchanged since the start of the year. However, the remaining 20% is significant because it is cash largely held outside the formal economy by underserved and marginalized groups.
In context: As of July 31, old notes will no longer be valid for market transactions or payments. Syrians who missed the initial exchange period have five years to recover their value through a much narrower process. Applications must be submitted at the Central Bank headquarters in Damascus and include at least 100 banknotes. If approved, the value is paid out in new pounds to a designated bank account, adding another barrier for people who are unbanked or rely solely on cash.
Cuba | Food Prices Surge as Regime’s Economic Controls Fail
Cuba’s food crisis is worsening. In June, dictator Miguel Díaz-Canel removed price caps on chicken, cooking oil, and other essentials, exposing the failure of decades of state control over prices, wages, and food distribution. Many of the caps were already ignored: chicken, capped at 312 pesos per pound, was selling for 450 pesos or more, while cooking oil, capped at 990 pesos per liter, sold for as much as 1,400 pesos. Since the caps were removed, however, the price of cooking oil has doubled, the prices of chicken and ground meat have risen by more than 50%, and those of rice, beans, and soap have increased by 20% to 50%.
In context: Price controls did not make food affordable; they hid a deeper regime-induced collapse in production, currency value, and purchasing power. With minimum wages and pensions worth less than $10 per month, Cubans are left facing market prices that their money cannot survive.
West Bank | Excess Cash Strains Economy
Banks in the West Bank are struggling with a surplus of physical cash they cannot return to Israel’s banking system. The West Bank under the autocratic rule of Mahmoud Abbas deploys the Israeli shekel as local currency but relies on Israel counterparts to accept excess cash and credit local banks electronically. Israeli authorities have limited how much cash they are willing to accept back, preventing West Bank institutions from converting notes and coins into electronic balances. The Abbas regime has done nothing to address the situation, leading banks to run out of physical vault space, and leading some merchants to reportedly stop accepting banknotes and coins. This is another example of how fiat currency can deteriorate under an authoritarian regime beyond the control of the average person.
North Korea | Rice Prices Hit Record High as Exchange Rate Climbs
Rice prices in North Korea reached their highest level last month since the independent media outlet Daily NK began tracking prices in 2009. As of July 19, one kilogram of rice sold for 40,000 North Korean won ($44) in Pyongyang, up 28.2% from two weeks earlier. Prices in Sinuiju and Hyesan, border cities where much of the country’s trade with China passes, also hit new records. Corn prices rose more than 21% over the same period. For North Korean families living under one of the world’s darkest dictatorships, rapid increases in staple foods like rice mean fewer meals, harder choices, and less protection from a collapsing currency they cannot escape.
In context: North Korea’s regime has spent years trying to defend the won through coercion: shuttering currency exchange centers, detaining informal money changers, restricting foreign currency use, and imposing price controls that push food into hidden markets. But none of these actions have fixed the basic problem. When the won falls and food prices rise, ordinary people lose purchasing power while the state punishes the informal markets and foreign currency channels they rely on to survive.
Russia | Pavel Durov Added to Wanted List Over Telegram
Russian officials have accused Telegram founder Pavel Durov of aiding terrorism and said he will be placed on an international wanted list. In a statement, Russia’s Federal Security Service (FSB) alleged that Telegram failed to remove channels and bots used to coordinate terrorist attacks, cyber fraud, and acts of sabotage inside Russia. The case follows growing restrictions on Telegram, with the app reportedly no longer working in the country without a VPN.
In context: Telegram is not end-to-end encrypted by default and remains a centralized platform with noteworthy privacy and security limitations. But Russia’s move against Durov is still significant: it shows how authoritarian regimes use terrorism and security claims to pressure and coerce companies to enforce state censorship and restrict communication infrastructure.
RECOMMENDED CONTENT
Freedom Tech in Southeast Asia by Frank Corva
In this essay, journalist Frank Corva examines two different freedom tech stories unfolding across South and Southeast Asia: India’s crackdown on Bitchat and Thailand’s growing Bitcoin education ecosystem. Corva explains how Bitchat’s offline design makes communication harder to stop, even when governments restrict internet access. He also highlights the Bitcoin Learning Center in Chiang Mai, where local educators are helping communities and dissidents understand and use Bitcoin to achieve financial freedom.
BITCOIN AND FREEDOM TECH NEWS
Coinkite | Critical Seed‑Generation Vulnerability Exposes Coldcard Funds
Last week, Coinkite confirmed that certain Coldcard hardware wallets generated recovery phrases (strings of words that serve as the backup for Bitcoin wallets) with weak randomness. This flaw made it possible for attackers to guess recovery phrases (even when users never exposed them or connected their wallets to the internet). The vulnerability stemmed from a bug in the wallet’s firmware, which caused Coldcard devices to bypass, starting in March 2021, the hardware random-number generator during recovery phrase creation. A recovery phrase generated with sufficient randomness comes from vastly more possible combinations than there are grains of sand on Earth, and even approaches the scale of atoms on Earth. But the Coldcard bug shrank that search space dramatically, leaving users with a much smaller pool of possible phrases. With a powerful enough computer, attackers could then guess these recovery phrases to steal users’ funds. Since the discovery, attackers have reportedly drained more than 1,816 bitcoin, worth roughly $116 million, from more than 5,200 Bitcoin addresses.
In context: The exploit affects Coldcard MK2, MK3, MK4, MK5, and Q devices whose recovery phrases were generated between the end of February 2021 and prior to the release of new emergency firmware in the past few days. Users who added their own entropy via sufficient 50+ dice rolls or who secured their wallets with complex and long enough passphrases are more safe, but out of an abundance of caution, are strongly recommended to migrate to a new wallet as soon as possible. The bug also affects users who generated their recovery phrase on a Coldcard post-March 2021 and later imported it to a new device. If you or anyone you know uses a Coldcard, immediate migration to a freshly generated wallet is recommended.
It is critical to underline that this is not a failure of Bitcoin itself. Instead, it is a reminder that no one wallet should be treated as infallible, and code should always be inspected rather than blindly trusted. HRF Chief Strategy Officer Alex Gladstein emphasizes in a recent post that the lesson is not to abandon self-custody, which remains the key component for Bitcoin to protect financial freedom under authoritarian regimes, but to strengthen it through open-source review, multi-vendor multisig, collaborative custody, and sound operational security.
Boltz | Non-Custodial Swap Tool Disabled Amid AI-Assisted Attacks
Boltz, a non-custodial Bitcoin swap tool, will remain disabled until further notice after reporting a surge in automated, AI-assisted probing and several contained exploits. The shutdown is already affecting wallets and tools that depend on Boltz infrastructure. ZEUS paused its swap instance, BULL Wallet said Lightning payments and Liquid-to-Bitcoin swaps are unavailable, and AQUA said Lightning and Liquid swaps will be disabled for the foreseeable future. Peer-to-peer exchange Hodl Hodl also paused Lightning trades as a result. All four emphasized that user funds remain unaffected because the tools are non-custodial.
Why this matters: Boltz shows how even non-custodial Bitcoin infrastructure can create dependency points across the broader Bitcoin wallet ecosystem. Users may not lose funds when these systems fail, but they can still lose access to important functionality like Lightning payments, Liquid swaps, and cross-layer movement.
Bitchat | Offline App Sharing Added on Android
Bitchat can now be shared between Android phones without an internet connection. The offline messaging app, vibe coded by Twitter and Block co-founder Jack Dorsey, lets users send messages from phone to phone using Bluetooth when mobile networks are unavailable, restricted, or shut down. With the new offline sharing feature, Android users can also transfer the Bitchat app itself directly to another nearby device while offline. Offline sharing features help to circumvent state censorship or internet shutdowns — just last week, for example, Narendra Modi’s hybrid authoritarian regime in India restricted access to Bitchat on GitHub.
Why this matters: During internet blackouts, access to a tool can matter as much as the tool itself. If people cannot download an app once the network is down, its usefulness is limited. Offline app sharing makes Bitchat more resilient by helping communities distribute private, peer-to-peer communication tools locally without relying on centralized platforms or internet access.
Pull | Open-Source Builder Platform Launched
Bitcoin educator and HRF grantee Megasley launched Pull, a platform designed to help developers move from learning Bitcoin to contributing to open-source projects. Pull will offer structured roadmaps, real projects, contribution tracking, project submissions, peer reviews, and public builder profiles. The project grew out of a bitcoin++ Nairobi hackathon and is informed by Megasley’s work training developers through Bitcoin and Lightning bootcamps across the African continent.
Why this matters: Pull could help more builders, especially in emerging Bitcoin communities, become consistent contributors to the tools that support financial freedom.
BITCOIN RECOMMENDED CONTENT
bitcoin++ Consensus Edition Livestream
In this livestream from the latest bitcoin++ developer conference, viewers can watch sessions from the Consensus Edition in Toronto, a developer-focused event exploring how Bitcoin’s rules are debated, maintained, and changed. Speakers examine consensus, soft forks, Bitcoin Core development, and proposals such as the highly debated BIP-110, helping viewers understand the technical and social processes behind Bitcoin’s evolution.
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