The cryptocurrency industry was in high spirits on Friday, as Coinbase announced that the U.S. Securities and Exchange Commission (SEC) is prepared to dismiss its legal case against the country’s largest digital asset exchange. In pre-market trading, Coinbase’s stock surged nearly 6%, and Bitcoin climbed to $99,475, approaching the $100,000 mark. However, this joyful atmosphere did not last long; less than three hours later, on the other side of the globe, the exchange Bybit revealed it had been hacked, with analysts calling it the largest theft in the industry’s history, involving nearly $1.4 billion worth of tokens.
(Bybit hacked for an astronomical amount! Cold wallet attacked, over $1.4 billion in funds leaked?)
**SEC agrees to dismiss case against Coinbase; Bitcoin nears $100,000**
The publicly traded cryptocurrency exchange Coinbase stated that the SEC has agreed to withdraw its lawsuit accusing Coinbase of operating illegal trading. This agreement is pending approval from the commissioners and is expected to be announced next week. Coinbase will not have to pay any fines, and the case will have no impact on its business.
COIN surged nearly 6% in pre-market trading. Bitcoin reached $99,475, close to the $100,000 mark, the highest point in two weeks. Ethereum also rose to $2,845, reflecting a nearly 4% increase over 24 hours.
**Bybit hacked, losses reach as high as $1.4 billion**
However, the joyful atmosphere was short-lived as Bybit revealed it had been hacked, with analysts declaring the incident the largest theft in the industry’s history, with approximately $1.4 billion worth of tokens stolen.
Bybit CEO Ben Zhou quickly went live to explain the situation, assuring users and partners that all other cold wallets remain secure, and all user funds are backed 1:1. He stated that the company’s operations continue as usual and are unaffected. He further emphasized that even though the losses from this hack may not be recoverable, the company has sufficient financial reserves to cover all losses, ensuring that users’ funds will not be impacted.
Bybit stated, “Withdrawal services remain open.” Bybit is arranging bridge lending to address what it described as a “massive bank run” on the exchange, using Bybit’s own tokens as collateral.
**Are cryptocurrency investors vulnerable to fraud and hacks? Can regulation prevent such incidents?**
Bitcoin dropped nearly 5% from its daily high, returning above $96,000 before the deadline, while Ethereum, which was affected by the Bybit hack, fell over 8% from its peak. Smaller altcoins and meme coins performed even worse, with Dogecoin (DOGE) declining 10% from its daily high.
As tokens traded on its exchange retracted their gains, Coinbase’s stock also fell. The stock reversed all its early gains, closing down over 8%, marking its largest decline of the year, and reaching the lowest price since November.
Benjamin Schiffrin, Director of Securities Policy at the advocacy organization Better Markets, stated, “Today’s events demonstrate that cryptocurrencies and memes are not only highly volatile and susceptible to fraud and scams but are also subject to hacking incidents, putting investors’ funds at risk of theft. We are now hearing Congress explicitly discuss providing light regulation for the crypto industry. I believe that light regulation cannot prevent people from incurring financial losses in events like today’s.”
**Everything is normal; I was just born in the darkness.**
Coinbase CEO Brian Armstrong concluded his tweet yesterday with, “Ultimately, it doesn’t matter how likely we are to succeed. I have to stand up for our customers and the rights of our industry. I also know this will serve as a deterrent to bad actors around the world that we may have to engage with in the future, letting them know we will not be bullied or pressured. We are happy to engage in litigation on multiple fronts indefinitely while continuing to build. Everything is normal. As Bane said in ‘The Dark Knight,’ ‘You merely adopted the dark; I was born in it.’”
Great news!
After years of litigation, millions of your taxpayer dollars spent, and irreparable harm done to the country, we reached an agreement with SEC staff to dismiss their litigation against Coinbase. Once approved by the Commission (which we’re told to expect next week)…pic.twitter.com/IlnoBs7N6n
— Brian Armstrong (@brian_armstrong) February 21, 2025
**Risk Warning**
Investing in cryptocurrencies carries a high level of risk, and prices can be highly volatile. You may lose your entire principal. Please assess the risks carefully.