Coinbase Global Inc.’s news that US securities regulators were about to drop a lawsuit against the country’s biggest digital-asset exchange gave the cryptocurrency sector a happy start to Friday.
But the joyous atmosphere didn’t last long: The Bybit exchange revealed that it had been breached less than three hours later, halfway around the world, and that about $1.5 billion worth of tokens had been stolen. According to analysts, this was the largest loss in the industry’s history.
A further clear reminder of the distinct and constant dangers present in this market was provided by the subsequent volatility in market prices, as well as the attitudes in the trenches of cryptocurrency trading.
Furthermore, it strengthened the arguments made by those who oppose President Donald Trump’s intense attempts to undo the regulatory oversight of an industry that has grown increasingly integrated with the conventional financial system.
The professor of crypto market research at American University’s Washington College of Law, Hilary Allen, stated, “Deregulated markets sound good until you have this type of attack.” In the near future, there is a lot of support for the removal of numerous rules. However, exercise caution when making wishes.
On Friday morning, traders were greeted with the news that the Securities and Exchange Commission, under the Trump administration, was about to permanently abandon its action against Coinbase for operating an unregistered exchange, brokerage, and clearing agency, pending commissioner approval.
Vigilant crypto market analysts immediately noticed massive, suspicious Ether withdrawals from another Dubai-based exchange, Bybit, which is one of the world’s largest, with more than $36 billion in daily average trading activity.
That it had been robbed was promptly confirmed by Bybit. “Hacker took control of the specific ETH cold wallet we signed and transferred all ETH in the cold wallet to this unidentified address,” CEO Ben Zhou said, giving an explanation of the incident in crypto jargon that most people would not understand but that digital asset enthusiasts would find all too obvious.