Biggest Hack in Crypto History by North Korea, SEC Dismisses Case Against Coinbase, Over 20 US States Adopt Crypto Bills (#203 - February 23, 2025)

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1. Lazarus Group Strikes ByBit in Biggest Crypto Heist Ever

North Korea’s Lazarus Group has terrorized the crypto sphere once again, this time targeting crypto exchange ByBit.

Couple of personal thoughts:

• this is the biggest hack ($1.5b) by a wide margin (closest is the $600m hack of Poly Network in 2021)
• this was such a sophisticated attack that it was definitely the work of North Korea’s Lazarus group and the transaction data shows that as well
• such a hack takes extreme level of technical crypto knowledge and months of preparation.?
• in short, the hackers targeted the UI of the cold wallet multi signatory wallets. So whilst Bybit was approving transaction X, in reality they were approving transaction Y.?
• these hacks also often happen during the weekend at night (and here happened on the Friday night when many people were flying out from HK Consensus)
• North Korea will have lots of difficulty to launder these funds. The? vast majority will never be able to be used, considering how advanced crypto traceability solutions are now.?
• there are some ways to launder small amounts via shady P2P and OTC brokers in China/Russia and other smaller countries in SEA/CIS countries but only a very small percentage of the ETH hacked will be able to be laundered?
• Bybit handled the situation quite well with good transparency and the crypto ecosystem came together to support. Bybit was the victim here but it literally could have been any other crypto firm.?
• the result of the investigations will be interesting to watch in the coming days.? Definitely a development to follow.

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2. SEC Agrees to Dismiss Case Against Coinbase

The Bybit hack eclipsed this important development that just took place in the U.S. as Coinbase announced that SEC staff agreed to dismiss the case against Coinbase.?

The SEC had approved the Coinbase IPO. But two years later, the SEC sued Coinbase. The only thing that had changed was the leadership of the SEC. T

he SEC charged Coinbase with securities laws violations but refused to provide clarity or show how Coinbase could actually comply with these regulations.?

As a lawyer, I could not believe the flagrant violations of due process that we saw from the SEC in recent years. Coinbase did the right thing by litigating these actions. Law schools will teach for years to come these SEC actions as examples of cases of flagrant abuse of a regulatory body.?

This is an important win for the crypto ecosystem and we should expect more similar dismissals from the “new” SEC. Case in point, just hours after the Coinbase news, the NFT marketplace OpenSea announced that the SEC is closing its investigation on their platform.?

The only losers here are the litigation lawyers representing Coinbase who have literally made millions in fees in recent years!

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3. Strategic Bitcoin Reserves: More to Come?

Crypto bills have been introduced in around 20 different U.S. states.

Many of these call for a strategic Bitcoin reserve. This would have been unthinkable only a couple of months ago in the pre-Trump era. We should expect a domino effect here as well when other states gradually also start enacting such legislation.?

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Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with. This newsletter is for educational purposes only, and none of its content should be construed as investment or financial advice of any kind.