A significant day for the cryptocurrency sector took a dramatic turn after a massive security breach at Bybit, one of the world’s leading crypto exchanges, resulted in a record-breaking theft estimated at nearly $1.5 billion.
The day had started on a positive note when Coinbase, the largest U.S.-based cryptocurrency exchange, announced a settlement with U.S. regulators, putting an end to a long-standing lawsuit that had cast uncertainty over the industry. However, just hours later, Bybit confirmed it had been hacked, sending shockwaves through the crypto market.
The impact was immediate. Bitcoin, Ether, and other major digital currencies saw sharp declines, with Bitcoin alone dropping 5% from its morning high of $100,000 to just over $95,000 by the evening. Shares of Coinbase, which had initially surged on the regulatory settlement, tumbled 8% by the end of the trading day.
Industry experts see the incident as a stark reminder of the volatility that continues to plague the cryptocurrency world, even as regulatory policies shift in favor of digital assets under President Donald Trump’s administration.
“These guys whose whole business is crypto, being smart about these issues, just lost $1.5 billion,” said Corey Frayer, who worked on crypto policy at the Securities and Exchange Commission during the Biden administration. “So, how do we expect regular Americans who just want their debit card to work to safely use the products?”
Memecoins Spark Market Turmoil
The dramatic swings in the crypto market coincided with growing concerns over the proliferation of memecoins—digital tokens often created as jokes or speculative assets. The sector has been rife with scams, and some high-profile incidents have resulted in substantial financial losses.
A memecoin promoted by Argentine President Javier Milei recently collapsed, triggering political turmoil and wiping out more than $250 million in investments. Similarly, a Trump-endorsed memecoin surged in value before crashing, leading to losses for over 800,000 crypto traders.
“Memecoins aren’t just a casino—they’re worse,” said Haseeb Qureshi, a crypto venture investor. “They’re a casino where each slot machine has a different owner, each trying to rip you off as much as they can before you move on to the next one.”
Regulatory Shift Under Trump
The regulatory landscape for crypto has undergone a significant transformation since Trump returned to the White House. His administration has softened oversight, rolling back enforcement efforts that previously targeted major industry players like Coinbase.
Under the Biden administration, federal regulators took a hardline stance, filing lawsuits against major firms, including a case against Coinbase that argued the company should register its digital currencies as securities. That lawsuit was dropped Friday, with no financial penalties imposed, following Trump’s appointment of crypto-friendly SEC Chairman Paul Atkins.
The decision was widely celebrated in the crypto industry, with executives declaring an end to the regulatory “siege” on digital assets.
Bybit Faces Unprecedented Hack
The optimism surrounding the SEC’s decision was short-lived. Bybit, a Dubai-based exchange that processes tens of billions in daily transactions, reported that cybercriminals had infiltrated its systems, stealing massive amounts of Ether.
This hack surpasses all previous records, including the infamous 2021 PolyNetwork breach, which saw $611 million stolen.
“It may even be the largest single theft of all time,” said Tom Robinson, co-founder of crypto analytics firm Elliptic.
Despite the staggering loss, Bybit’s CEO, Ben Zhou, assured customers that the exchange remained financially stable. “Even if this hack loss is not recovered, all of clients’ assets are 1-to-1 backed,” he stated on social media. “We can cover the loss.”
During a livestream on Friday, Zhou—seen swigging a can of Red Bull—estimated the stolen amount at 401,000 Ether, or around $1.1 billion, though forensic analysts placed the figure closer to $1.5 billion.
Bybit, which does not offer services to U.S. customers, did not immediately respond to requests for further comments. However, cybersecurity experts at Arkham Intelligence have attributed the breach to North Korean hacking groups, which have a long history of targeting the crypto industry.
By the end of the trading day, the crypto market remained deeply unsettled. Bitcoin struggled to recover, and Coinbase shares closed at their lowest level since November, overshadowing what had started as a major victory for the crypto sector.
