This Week in Crypto: Bybit Hack Breaks All Records, Bitcoin Goes Bearish, SEC Drops Coinbase Suit

This week in crypto, the Lazarus Group stole $1.5 billion from Bybit, yet the exchange has sustained the damage and remained operational. US Bitcoin ETFs saw a record $2.6 billion outflow turning BTC bearish and impacting major crypto stocks. At the same time, meme coin scams on social media are still on the rise.

On the regulatory front, the SEC dropped its lawsuit against Coinbase, prompting one Commissioner to accuse it of open corruption. Meanwhile, the recently launched Pi Network is being accepted by some Florida businesses.

Lazarus Group Pulls Off $1.5 Billion Hack

One week ago, Bybit, a leading crypto exchange, was hacked. With $1.5 billion in damages, it was the most successful crime in crypto history. A few conflicting narratives circulated throughout the community, but famous sleuth ZachXBT cracked the case.

The culprit was none other than the Lazarus Group, a North Korean hacker collective.

“At 19:09 UTC today, ZachXBT submitted definitive proof that this attack on Bybit was performed by the Lazarus Group. His submission included a detailed analysis of test transactions and connected wallets used ahead of the exploit, as well as multiple forensics graphs and timing analyses. The submission has been shared with the Bybit team,” Arkham claimed.

The Lazarus Group conducted a sophisticated security breach that sought to exploit Bybit’s wallet signing process. Safe Wallet confirmed that the hackers were able to breach its infrastructure but claimed its smart contracts remain secure.

Several community figures criticized its statement as too vague. Bybit, for its part, has rebuilt its reserves through several methods. The industry and crypto community have applauded the exchange’s excellent crisis management.

SEC Drops Coinbase Lawsuit, Dissension in the Ranks

After hinting that it would do so for weeks, the SEC finally dropped its lawsuit against Coinbase this week. Brian Armstrong, the crypto exchange’s founder and CEO, pre-emptively announced that he and the SEC struck a deal, but it took a few days for everything to finalize.

“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) this would be a full dismissal, with $0 in fines paid and zero changes to our business,” he said.

The Commission has been dropping several lawsuits and enforcement probes into the crypto industry this week. However, the SEC’s lawsuit against Ripple is still active, and there’s no clear hint of when it will end.

Additionally, these actions have attracted criticism from within the Commission.

Earlier today, Commissioner Caroline Crenshaw publicly lambasted the SEC’s shift towards the crypto industry. She accused its leadership of willfully ignoring 80 years of precedent to deliberately favor a political faction.

Moreover, she did not offer to resign and will remain an active Commissioner for over three months. This is a shocking upset to the SEC’s normal operations.

Bitcoin Drops 17%, Damaging ETFs and Corporate Holders

Strategy (formerly MicroStrategy), one of the world’s largest Bitcoin holders, recently spent nearly $2 billion on the asset. However, this did not help the company’s stock price, following sharp drops in BTC itself.

This fueled concerns that Strategy may have to liquidate some of its crypto holdings, as it might be overleveraged into the asset.

“Forced liquidation of MSTR is not necessarily impossible. But, it is highly unlikely. It would need a “mayday” situation to occur,” one commentator claimed.

Since those rumors started two days ago, things have gotten worse. Several key metrics are showing a decline in Bitcoin, and it’s proved contagious. Bitcoin ETFs had $2.6 billion in outflows this week, and corporate Bitcoin holders like Strategy and Tesla are all dropping.

Liquidations are up, and the Federal Reserve is predicting economic downturns; it looks like a bear market.

Pi Network Gets Institutional Adoption in Florida

Pi Network, one of the highly-anticipated crypto projects, made new headway in institutional acceptance this week. According to several social media posts, a Florida real estate company is now accepting Pi tokens. Cube Motor, a car dealership in the state, also set up similar infrastructure.

“American film producer and actor James J Zito is currently the director of Zito Realty, a real estate company in Florida, USA, which accepts real estate transactions with Pi coins,” the post read.

Pi Network is generating huge amounts of hype, with Binance’s community overwhelmingly voting to list the token. However, not everyone in the crypto sphere is thrilled with the project.

Before the hack, Bybit CEO Ben Zhou called the project a scam and a pyramid scheme. Its price is showing a few signs of market fatigue, but nothing definitive has happened yet.

Meme Coin Scams Are On the Rise

Kanye West, a famous American rapper, may or may not be wrapped up in a social media scam. Earlier this month, he denied involvement with any extant Kanye meme coin but allegedly planned to launch his own.

However, some crypto sleuths are speculating that he sold his X account to Barkmeta for $17 million, enabling a major fake token scam.

“Kanye West sold his X account for $17 million. The most anticipated meme coin launch is Barkmeta’s rug pull. The chance of YE’s sold account is above 95%. I do not recommend you to buy Kanye’s meme coin in any case,” a sleuth named Blade claimed.

A scam-centric paranoia is circulating through the crypto space, and the Bybit hack is only helping matters. Pump.fun’s social media account was hacked to promote a scam this week.

After the initial posts were deleted, the hackers were able to advertise another scam on the same page minutes later. Fears are building that this chaos is damaging the industry’s reputation.

In short, a lot has happened in crypto this week. Major crimes and bearish market conditions go alongside political developments and institutional adoption.

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