The Daily: Bybit gets hacked for over $1.4 billion, SEC set to dismiss Coinbase case and more

The following article is adapted from The Block’s newsletter, The Daily, which comes out on weekday afternoons.It's Friday! Just when things were starting to look a little brighter, with the crypto crackdown era continuing to fade, the industry faces its biggest hack yet! Never a dull moment in this space.In today's newsletter, crypto exchange Bybit gets hacked for over $1.4 billion, the SEC agrees in principle to dismiss its case against Coinbase, Copper says scrutiny of U.S. gold reserves by President Trump could drive bitcoin inflows and more.Let's get started.Bybit hacked for over $1.4 billionBybit CEO Ben Zhou confirmed the crypto exchange was hacked on Friday, with over $1.4 billion worth of funds stolen from its ETH cold wallet, though withdrawals are processing as "normal" for users. The hacker tricked Bybit's ETH cold wallet signers into approving a malicious transaction by exploiting a masked UI that appeared to use a legitimate Safe Wallet URL, Zhou explained on X."[The] hacker took control of the specific ETH cold wallet we signed and transferred all ETH in the cold wallet to this unidentified address," he said, attempting to reassure users that all other Bybit hot, warm and cold wallets were fine.The Bybit hack ranks among the largest centralized exchange exploits to date, surpassing the Coincheck ($534 million), Mt. Gox ($470 million) and FTX ($415 million) attacks in scale.The stolen funds, including ETH and liquid staking derivatives, were moved across multiple wallets and decentralized exchanges to try and obfuscate the theft.Despite the loss, Zhou later assured users that Bybit remains solvent and will cover the loss even if the funds cannot be recovered, ensuring that assets are fully backed 1:1 for clients.Safe's security team is assisting Bybit in the ongoing investigation of the incident, confirming that its official front-end was not compromised, but it would pause certain functionalities as a precaution.Meanwhile, the industry continues to react to the "largest crypto theft of all time."SEC set to dismiss case against CoinbaseSecurities and Exchange Commission staff have agreed in principle to dismiss the case against Coinbase, pending Commissioner approval, potentially ending its 2023 lawsuit over alleged securities violations.Coinbase sees the dismissal as a major win for the crypto industry and America's 52 million digital asset owners, asserting it was right on the facts and the case should never have been filed."There will be no settlement or compromise — a wrong will simply be made right," Coinbase Chief Legal Officer Paul Grewal said, thanking the crypto exchange's leadership, legal team and its lawyers at Wachtell and Sullivan & Cromwell.CEO Brian Armstrong described the news as "hugely vindicating," adding the crypto exchange was told to expect the SEC Commission's approval of the dismissal next week.Coinbase's stock rose 5% to $270 in pre-market trading following the announcement on Friday. However, that move was subsequently reversed after the hack on Bybit emerged.An SEC spokesperson declined to comment when reached by The Block.Trump's scrutiny of US gold reserves could drive bitcoin inflowsPresident Trump's proposed audit of Fort Knox's reserves could lead to greater scrutiny of its gold holdings, driving investors toward bitcoin, Copper Head of Research Fadi Aboualfa told The Block.If gold ETFs cannot verify they have 100% backing, they might trade at a discount, causing a global liquidity drain and prompting reallocations into digital assets, the analyst noted."The new administration's push to audit gold reserves highlights a broader demand for transparency — something digital assets can provide," he said. "It is no surprise, then, that momentum behind the concept of a bitcoin strategic reserve is growing."Aboualfa pointed out that recent concerns over the available supply of gold began to surface as increasing volumes of the precious metal moved from London to the U.S. amid speculation that Trump may reprice the country's gold holdings to market value.SBF asks for pardon in first prison interviewIn his first interview from the Metropolitan Detention Center in Brooklyn, New York, where he is serving a 25-year sentence for perpetrating one of the largest crypto frauds to date, Sam Bankman-Fried criticized the Biden administration while seeking a pardon from President Trump.The former FTX CEO distanced himself from his past political affiliations, now aligning with the Republican party and critiquing the Democratic party.Bankman-Fried reiterated claims that the now-defunct crypto exchange was solvent and that law firm Sullivan & Cromwell mishandled the bankruptcy process, arguing that customers could have been repaid earlier.Bankman-Fried's request follows Trump's pardon of early bitcoiner and Silk Road founder Ross Ulbricht, as well as Joseph Bankman and Barbara Fried's efforts to seek clemency for their son.The timing of The New York Sun interview also coincided with the start of the FTX repayment process, albeit at the crypto bear market low prices of November 2022 — when the exchange collapsed — rather than the current market rate.Ross Ulbricht joins calls to 'free' Roger VerRoss Ulbricht, the Silk Road creator recently pardoned by President Trump, joined calls to "free" early Bitcoin evangelist Roger Ver, who faces serious tax fraud charges related to his crypto holdings."Roger Ver was there for me when I was down and needed help. Now Roger needs our support," Ulbricht wrote on X. "No one should spend the rest of their life in prison over taxes."Ver, previously known as "Bitcoin Jesus," is under house arrest in Spain while awaiting extradition to the U.S. over charges of mail fraud, tax evasion and filing false returns linked to his expatriation process in 2014, alleging he owes the IRS approximately $48 million.Looking ahead to next weekEurozone CPI inflation data are out on Monday. U.S. jobless claims and GDP figures are released on Thursday. U.S. PCE numbers follow on Friday.Mantra, EigenLayer, Ethena, ASI Alliance, Celo and Moca Network are all set for token unlocks over the next seven days.ETHDenver kicks off on Sunday as AIBC EURASIA also gets underway in Dubai.Never miss a beat with The Block's daily digest of the most influential events happening across the digital asset ecosystem.Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.