The cryptocurrency industry was elated on Friday, as Coinbase announced that the U.S. Securities and Exchange Commission (SEC) is prepared to dismiss the legal case against the country's largest digital asset exchange. Coinbase's pre-market trading surged nearly 6%, and Bitcoin rose to $99,475, nearing the $100,000 mark. However, this joyful mood did not last long. In less than three hours, on the other side of the globe, the Bybit exchange revealed that it had been hacked, and analysts said this was the largest theft in the industry's history, with nearly $1.4 billion worth of tokens stolen.

(Bybit Hacked for a Staggering Amount! Cold Wallet Attacked, Over $1.4 Billion in Funds Drained?)

SEC Agrees to Withdraw Case Against Coinbase, Bitcoin Nears $100,000

The U.S. listed cryptocurrency exchange Coinbase stated that the U.S. Securities and Exchange Commission (SEC) has agreed to withdraw the lawsuit accusing Coinbase of operating an illegal exchange. The agreement is pending commissioner approval and is expected to be announced next week. Coinbase will not have to pay any fines and its business will not be affected.

COIN surged nearly 6% in pre-market trading. Bitcoin rose to $99,475, nearing the $100,000 mark, a two-week high. Ether also rose to $2,845, up nearly 4% in 24 hours.

Bybit Hacked, Value Exceeds $1.4 Billion

However, the joyful mood did not last long, as the Bybit exchange revealed that it had been hacked, and analysts said this was the largest theft in the industry's history, with tokens worth about $1.4 billion stolen.

Bybit CEO Ben Zhou quickly went live to explain and assure users and partners that all other cold wallets remain safe and secure, and that all user funds are fully backed 1:1, with the company's business operations unaffected. He further emphasized that even if the losses from this hacking attack cannot be recovered, the company has sufficient financial reserves to bear the entire loss and ensure that user funds are not affected.

Bybit stated that "withdrawal services remain open". Bybit is arranging bridge lending to make up for what it calls the exchange's "massive bank run", using Bybit's own tokens as collateral.

Can Regulation Prevent Such Incidents in the Cryptocurrency Industry Affected by Fraud and Hacking

Bitcoin fell nearly 5% from its daily high, returning to above $96K at the time of writing, while Ether, which was affected by the Bybit hack, fell more than 8% from its daily high. Smaller Altcoins and meme coins performed even worse, with Dogecoin (DOGE) falling 10% from its daily high.

As the tokens traded on its exchange gave back their gains, Coinbase's stock also fell, erasing all of its early gains and closing down more than 8%, the biggest drop so far this year, to the lowest level since November.

Benjamin Schiffrin, the securities policy director at the advocacy group Better Markets, said: "Today's events show that Cryptocurrencies and meme coins are not only highly volatile, but also susceptible to fraud and scams, and can be subject to hacking incidents where investors' funds may be stolen. We are now hearing Congress explicitly discussing light-touch regulation for the crypto industry. I believe that light-touch regulation will not prevent people from suffering financial losses in events like today's."

Everything is Normal, I was Just Born in the Darkness

In his final tweet yesterday, Coinbase CEO Brian Armstrong said: "At the end of the day, it doesn't matter how much we succeed. I have to stand up for our customers and the rights of our industry. I also know that this will serve as a deterrent to future bad actors around the world who may try to bully or pressure us. We're 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