Is Mild Regulation Beneficial for the Crypto Industry? Coinbase’s Party Canceled and Bybit Hacked
The cryptocurrency industry was in high spirits on Friday, as Coinbase announced that the U.S. Securities and Exchange Commission (SEC) was prepared to dismiss the legal case against the country’s largest digital asset exchange. Coinbase’s pre-market trading soared nearly 6%, while Bitcoin climbed to $99,475, nearing the $100,000 mark. However, this joyful atmosphere did not last long; less than three hours later, on the other side of the world, the exchange Bybit revealed it had been hacked, with analysts claiming this was the largest theft in the industry’s history, with tokens worth nearly $1.4 billion stolen.
(Bybit Hacked for a Staggering Amount! Cold Wallet Compromised, Over $1.4 Billion in Funds Exposed?)
SEC Agrees to Dismiss Case Against Coinbase, Bitcoin Approaches $100,000
The publicly traded cryptocurrency exchange Coinbase stated that the SEC has agreed to drop the charges alleging that Coinbase was 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 this will not affect its business at all.
COIN soared nearly 6% in pre-market trading. Bitcoin reached $99,475, approaching the $100,000 mark, the highest point in two weeks. Ethereum also rose to $2,845, with a nearly 4% increase over 24 hours.
Bybit Hacked, Value Up to $1.4 Billion
However, the celebratory atmosphere was short-lived, as the exchange Bybit disclosed it had been the target of a hacking attack, which analysts have described as the largest theft in the industry’s history, with approximately $1.4 billion worth of tokens taken.
Bybit CEO Ben Zhou quickly went live to explain the situation, assuring users and partners that all other cold wallets remained secure and that all user funds are backed 1:1, with the company’s operations continuing as normal and unaffected. He further emphasized that even if the losses from this hacking incident cannot be recovered, the company has sufficient financial reserves to absorb the entire loss and ensure that user funds are not impacted.
Bybit stated, “Withdrawal services remain open.” Bybit is arranging bridge lending to compensate for what it described as a “massive bank run” on the exchange and is using its own tokens as collateral.
Can regulations prevent such incidents in the cryptocurrency sector?
Bitcoin fell nearly 5% from its daily high, returning to above $96,000 before the deadline, while Ethereum, which was affected by the Bybit hacking, dropped over 8% from its daily high. Smaller altcoins and meme coins performed even worse, with Dogecoin (DOGE) down 10% from its daily peak.
As the tokens traded on its exchange began to retract their gains, Coinbase’s stock also fell. The stock gave up all its early morning gains, closing down over 8%, marking its largest drop this year and reaching its lowest price since November.
Benjamin Schiffrin, the securities policy director at advocacy organization Better Markets, stated, “Today’s events demonstrate that cryptocurrencies and memes are not only extremely volatile and susceptible to fraud and scams, but they can also be victims of hacking incidents, causing investors’ funds to be stolen. We are now hearing Congress explicitly talk about providing light regulation for the cryptocurrency industry. I believe that light regulation will not prevent people from suffering financial losses in events like today.”
Everything is normal; I was just born in the dark.
In a tweet yesterday, Coinbase CEO Brian Armstrong concluded, “Ultimately, it doesn’t matter how likely our success is. I must stand up for our customers and the rights of our industry. I also know this will serve as a deterrent to future bad actors we may have to deal with around the world, letting them know that we will not be bullied or pressured. We are happy to engage in multiple aspects of litigation 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 Disclaimer
Investing in cryptocurrencies involves a high degree of risk, and prices can be highly volatile, potentially resulting in the loss of your entire principal. Please assess the risks carefully.
