Coinbase on Friday said the SEC has agreed to drop the lawsuit against the company with prejudice, meaning it cannot be filed again.
The move, which is still subject to the approval of the SEC’s Commissioners, is yet another signal that the Trump administration plans to be more friendly to crypto than the SEC was under former leader Gary Gensler.
The SEC’s lawsuit, filed in 2023, alleged that crypto assets were securities and that Coinbase was operating as “an unregistered national securities exchange, broker, and clearing agency.”
Coinbase fought back, arguing, in part, that the SEC hadn’t established clear enough rules concerning crypto in order to sue over breaking them.
“I remember in 2023, a lot of people were advising on this and they were saying, ‘Do not engage in litigation with the SEC; it’s going to cost you tens of millions of dollars,’” Coinbase CEO Brian Armstrong said in a video he posted on X on Friday announcing that the suit was being dropped. In the video, Armstrong also made allegations about the SEC’s motivations and tactics.
Armstrong said he fought because he believed that he was saving the crypto industry in America.
“Not as many other companies had deep pockets like we did,” he said. “And ultimately we had to spend $50 million defending this case” — proving the naysayers right on how expensive the fight would be.
A Coinbase spokesperson clarified that this amount included strictly external legal fees, not employee time.
Coinbase’s apparent legal victory aside, Armstrong said that he still believes that the U.S. needs “to get legislation for crypto passed” to codify favorable regulations, or risk falling behind other nations.
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Crypto exchange Bybit announced on Friday that “a sophisticated attack” led to the theft of Ethereum (ETH) from one of the company’s offline wallets.
Bybit’s chief executive and co-founder Ben Zhou said in a livestream that the hackers stole around 401,346 ETH, which at the time of the theft amounts to about $1.4 billion.
Both crypto security firm Elliptic, as well as crypto security researcher ZachXBT, the total amount of ETH stolen is worth around $1.4 billion, making this the largest known theft of crypto in history. The previous highest crypto breaches were the hacks against the Ronin Network and Poly Network, which resulted in the loss of $624 million and $611 million, respectively, according to data collected by Rekt, a site that tracks web3 and crypto breaches.
“In fact, it may even be the largest single theft of all time,” Tom Robinson, Elliptic’s co-founder and chief scientist told TechCrunch, referring to any kind of theft, not just data breaches.
Prior to Bybit’s breach, the withdrawal of around $1 billion from the Central Bank of Iraq is said to be the largest bank robbery of all time, according to the financial news site World Finance.
Zhou wrote on X that the hacker “took control” of one of the company’s cold wallets, referring to a digital wallet that stores cryptocurrency but in theory isn’t connected to the internet, and transferred funds to a “warm” wallet, which is online.
When reached for comment, Bybit spokesperson Tony Au referred to Zhou’s public posts. In one post, Zhou wrote that the company is “solvent” and “can cover the loss” even if it can’t recover the stolen funds.
Bybit, which is based in Dubai, United Arab Emirates, had an estimated total assets of $16 billion as of last week, according to CoinMarketCap.
To put things in perspective, in all of 2024, the total amount of crypto stolen by hackers was around $2.2 billion, according to blockchain tracking firm Chainalysis. And, in 2023, it was around $2 billion, according to multiple estimates.
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