All Been Crypto — Week 28 Feb 2025
Another week where it feels like months in crypto so much happened and prices finally seeing some reaction with BTC dropping below the narrow trading band it has been since Trump election victory in Nov now at 82k down -16% Wow with ETH at 2200 -18% and SOL -25%. We shaved off 300bn of market cap past 7 days now hovering again below 3trn. Only major outperformer is MKR +19% as a flight to safety and upon launching USDS bridge to Bearachain. Of course sentiment is very bad and the massive hack certainly didn’t help, we saw large scale outflows from ETFs this week suggesting institutions are changing their mind on the asset class. And BTC was the one that held everything up ALTs especially SOL had been butchered after the MEME scandals and throw oil into the fire Pump.Fun account got hacked further dampening sentiment on the already very bearish MEME coin market. Notwithstanding that on the institutional side zooming out we had some major +ve development, SEC dropped charges against almost all their wells notices and TradFi giant Citadel saying they are entering crypto trading. It’s ETH Denver week so will also get some announcements on tech upgrades and hopefully a bit of a sentiment shift. Stay safe and enjoy reading!
Bat Tai Chi — btc21@mail.com
HEADLINES:
Bybit’s 1.4bn Hack
The largest hack not just in crypto but ever. It happened last weekend that Lazarus group managed to gain control of Bybits cold wallets and drained >400k ETH. The exact post-mortem is still being prepared but here’s the interim and so far it looks like a sophisticated exploit of its Ethereum multisig wallet. The breach occurred during what appeared to be a routine transfer from the cold wallet to a warmer wallet — a process the attackers managed to hijack via malicious tampering. CEO Ben Zhou explained that the wallet’s signing interface had been compromised: the attackers presented the wallet signers with a falsified user interface that showed the correct transaction details and a legitimate Safe (multisig) URL, even as the underlying signing request had been maliciously altered. Tricked by this spoofed interface, Bybit’s signers unknowingly approved a transaction that replaced the wallet’s smart contract logic with a malicious contract, giving the hacker complete control. Subsequent forensic investigations uncovered that the attackers targeted a vulnerability in the third-party multisig wallet provider used by Bybit. The exchange relied on Safe Wallet (formerly Gnosis Safe) for its ETH storage, and North Korean Lazarus hackers reportedly breached Safe’s infrastructure to pull off the heist. You wonder why they moved the assets to ETH well its a huge sum so of course there’s not that many choices. BTC they didn’t manage to hack although they are bridging over now and SOL well risk of freezing is way too high. Bybit thanked the foundation and Pump.Fun for blocking certain addresses and removing tokens potentially linked to the hack. Currently we got about 920+ addresses receiving funds tied to the hack and this will likely grow. Bybit announced a bounty hunt for freezing Lazarus assets.
As for the exchange Bybit managed to receive bridge loans from other industry players and has since repurchased the ETH OTC. The exchange saw huge outflow first couple of days but has now stabilized and claims can cover the shortfall with profits.
US regulatory overhaul showing
This week we got confirmation of what many in the industry have hoped for and been lobbying and throwing campaign dollars behind Trump — and end to the SEC’s aggressive regulation by enforcement actions. The agency had fired out wells notices at rapid speed over the past years and it became increasingly clear that it was used at least in part as a scare tactic as a chilling effect. Now we got confirmation that they are closing investigations into Robinhood, Coinbase, Gemini, Consensys, Open Sea and Uniswap. A major win as the agency is shifting more towards providing guidelines and rules than threatening off existing industry practitioners. Interestingly even Justin Sun’s lawyers jumping on the band wagon now looking to settle. He bought 75mm of world liberty finance and so guess betting that this will help him in some way. We also saw OKX resolving a DOJ investigation with 84mm penalty and >400mm forfeiting of revenues. Clearly on the regulatory side US is gearing up to a different regime as anticipated, it’s hard to remain very bearish on the asset class if there’s such regulatory tailwinds from the leading financial capital in the world.
QUOTES:
Went to a crypto happy hour event in Manhattan tonight — easily the oldest crowd I’ve seen at a crypto gathering. Average age had to be 55+. Everyone was bullish on crypto. No one knew about memecoins. All focused on getting their family offices into Bitcoin and early-stage crypto projects. Complete antithesis of Crypto Twitter.
Frank Chaparro — Author and Podcaster at The Block
Freedom isn’t freedom when it only applies to the people you agree with. “Freedom” then becomes censorship which is the tool of choice of oppression. I joined this industry because I saw it’s opportunity to change human societies forever, granting a new level of freedom, self sovereignty, and liberty we’ve never seen before in any society. If you don’t agree, then you must also say that blockchain technology is useless. After all, blockchains are piss poor databases that are crazy slow and expensive. What makes this tech so valuable is its unique attributes of permissionlessness and censorship resistance. Its governance and operation outside of govt ideology. Its transparency and security/cryptography. Its economics and ability to get many actors to coalesce and collaborate towards a collective vision. Don’t lose sight of our satoshi roots.
Chad Barraford — Rune Core Dev
Pleased to share I’ll be working with MattHuang @Paradigm as an incident response advisor to assist their portfolio companies. It was an easy decision as this gives me the freedom to continue helping the community and publishing investigations like. I’ve always respected how Paradigm has given back to the space by funding initiatives such as Security Alliance, publishing open source research, and helping defend the right to privacy.
ZachXBT — Onchain Researcher
All Been Crypto — Week 28 Feb 2025 was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.