AI finds cracks in post-quantum cryptography, forcing industry to re-evaluate security

Precedent & Market Context

Post-quantum cryptography was developed to protect against the threats of quantum computers, which could potentially break many of the encryption and signature systems currently in use. The National Institute of Standards and Technology (NIST) has been working on standardizing post-quantum algorithms, with HAWK and Classic McEliece being two of the candidates. However, the recent discovery of vulnerabilities in these schemes by AI models has thrown a wrench into the works.

Main Event

According to Conor Deegan, co-founder of Project Eleven, AI models have discovered exploitable mathematical flaws in HAWK and Classic McEliece. These flaws reduce the security levels of the schemes, making them more vulnerable to attacks. Deegan made the comments on October 19, 2026, and the timing matters because the industry has spent years preparing for a quantum threat.

Analysis & Market Impact

The discovery of vulnerabilities in HAWK and Classic McEliece has significant implications for the industry. The stakes are specific to custody systems, which guard private keys, and a key-recovery attack against a signature scheme could put holdings at risk. Investors and operators may need to look harder at the security assumptions underneath their holdings as AI-assisted attacks become more capable. Project Eleven's response to this development is to launch Strongpoint, a custody platform built around hybrid signing and modular algorithm integration.

Implications & Outlook

The industry will need to re-evaluate its security assumptions and prepare for a faster and more capable cryptanalyst. The discovery of vulnerabilities in HAWK and Classic McEliece highlights the importance of staying ahead of emerging threats. As AI models continue to improve, the industry will need to adapt and invest in new security measures to protect its assets.