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Bitlayer’s Bitcoin smart-contract system is being implemented by mining pools behind 31.5% of the network’s hashrate, a development that will help ensure that its system will operate on the Bitcoin blockchain, the company said.

According to a May 27 announcement shared with Cointelegraph, Bitlayer’s BitVM implementation will be supported by major Bitcoin (BTC) mining pools including Antpool, F2Pool, and SpiderPool. Antpool CEO Andy Chow said:

“Antpool has become the bridge operator for Bitlayer to support Bitcoin innovation and protect miners’ interests.”

BitVM (Bitcoin Virtual Machine) is a framework that enables complex smart contracts to be deployed on the Bitcoin blockchain without changing the base protocol. The idea was introduced by Robin Linux in 2023, and allows for the complex computation involved in smart contract systems to be verified onchain and executed offchain in a way resembling optimistic rollups.

Related: Here’s how Bitcoin is transforming into Web3’s backbone

A BitVM implementation

Bitlayer is a BitVM implementation, aiming to allow Bitcoin to flow through decentralized finance (DeFi) systems and layer-2 networks. According to Chow, the implementation might lead to heightened activity in Bitcoin’s network and generate revenue for miners:

“This expansion of Bitcoin’s use cases will drive more network activity, generating additional transaction fees and revenue opportunities for miners. As block rewards decrease over time, growing fee markets are critical for miners’ sustainable income.“

Mining pools such as Chow’s Antpool play a critical role in the adoption of BitVM implementations because they directly determine the inclusion and validation of new types of transactions and scripts at the consensus layer.

BitVM requires miners to include custom Taproot-based transactions that encode interactive verification logic. Mining pools must agree to include these non-standard or computationally intensive scripts in blocks, otherwise the protocol would simply not function.

Related: StarkWare researchers propose smart contracts for Bitcoin with ColliderVM

Mining pool support

According to Hashrate Index data, Antpool controls 17.2% of Bitcoin’s hashrate as of May 26, while F2Pool controls 8.2% and Spiderpool 6.1%. This results in a total supporting hashrate of 31.5%.

This is enough to secure transaction inclusion in under one in every three blocks. This is presumably enough for testing, prototyping and early-stage applications.

With this percentage of supporting hashrate, developers can build functional systems with the assumption that, despite some latency, BitVM transactions will be processed. So while it is hard to view this hashrate as allowing a fully functional deployment, it is likely enough for the early phases of BitVM development.

A Bitlayer representative told Cointelegraph that “should collective hashrate support weaken or policy shifts occur within Bitcoin Core, we have a multi-layered contingency plan.” This plan includes the “expanded mining pool partnerships,” referring to the company’s intention to keep onboarding more mining pools.

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Coinbase and two executives have been hit with another proposed class-action lawsuit over the crypto exchange’s stock price drop after disclosing a user data breach earlier this month and for allegedly failing to disclose a violation of an agreement with a UK regulator.

Coinbase investor Brady Nessler said in a May 22 lawsuit filed in a Pennsylvania federal court that the data breach and the alleged broken agreement with the UK’s Financial Conduct Authority resulted in a “precipitous decline in the market value of the Company’s common shares,” causing stockholders to suffer “significant losses and damages.”

Coinbase said on May 15 that its damages bill could run up to $400 million after it was hit with a $20 million extortion attempt four days earlier, with several of its customer support agents bribed to access internal systems and steal a limited amount of user account data.

Nessler claimed Coinbase (COIN) shares dropped by 7.2% to close at $244 on May 15 as a result of the disclosure. However, the stock did stage a comeback, spiking 9% and hitting $266 by the closing bell on May 16, according to Google Finance. 

Coinbase stock closed down over 3% on May 23 at $263, falling another $1.62 after the bell. COIN is up nearly 6% so far this year.

Nessler’s complaint is seemingly the first to argue damages caused by Coinbase’s stock drop following its breach disclosure in a series of recent class-action lawsuits over the incident.

The crypto exchange was hit with at least six lawsuits in the days after disclosing the data breach, all accusing it of mishandling the incident and failing to protect their data. 

UK agreement breach hurt stock, suit says

The FCA fined Coinbase’s UK arm $4.5 million in July 2024 for breaching a 2020 voluntary agreement preventing the exchange from onboarding customers considered high risk by the regulator.

The FCA said Coinbase onboarded 13,416 customers that the regulator considered high-risk and offered them crypto services.

Related: Coinbase presses to axe rule banning SEC staff from holding crypto

Nessler said in the suit that the fine saw Coinbase’s stock fall by over 5%, closing at $231.52 on July 25, 2024.

Nessler also claimed that Coinbase didn’t disclose it had breached this agreement when the exchange first listed its shares on the Nasdaq in April 2021, and as a result, “the market price of the Company’s securities had been artificially,” inflated. 

Nessler claims had she known about the agreement violation, she would not have purchased the stock at the “artificially inflated prices.”

Coinbase did not immediately respond to a request for comment.

The class suit was filed on behalf of anyone who bought Coinbase stock between April 14, 2021, and May 14, 2025, and is asking for damages and a jury trial. Coinbase CEO Brian Armstrong and chief financial officer Alesia Haas are also named as defendants.

Another lawsuit filed in Illinois on May 13, alleges Coinbase failed to notify users in writing of the collection, storage, or sharing of their biometric data and the purpose and retention schedule for their data.

Magazine: Bitcoin bears eye $69K, CZ denies WLF ‘fixer’ rumors: Hodler’s Digest, May 18 – 24