Big day for crypto goes south in a hurry after a giant hack

SAN FRANCISCO — The good news for cryptocurrency investors arrived just after 8 a.m. Friday: Coinbase, the largest crypto marketplace in the United States, had reached a deal with U.S. regulators to dismiss a lawsuit that had hung over the industry for years.

But within hours, the crypto market descended into a new crisis. At 10:51 a.m., Bybit, another leading crypto exchange, said it had been hacked — with industry analysts estimating the loss at nearly $1.5 billion, the largest theft in crypto history.

The prices of bitcoin, ether and other major cryptocurrencies plunged. Even Coinbase’s share price had dropped 8% by the end of the day.

This split-screen contrast was a telling illustration of the state of crypto in 2025. Even as President Donald Trump embraces the industry, it remains the Wild West of the financial world, prone to scams, thefts and sudden market meltdowns.

A series of policy changes in Washington are poised to encourage millions of investors to dabble in crypto for the first time, despite the industry’s continued struggles to police and prevent criminal activity. The hack was a reminder that, for all its growing influence in politics, crypto remains something of an international free-for-all — a chaotic market in which even the most experienced investors sometimes suffer extreme losses.

“These guys whose whole business is crypto, being smart about these issues, just lost $1.5 billion,” said Corey Frayer, who worked on crypto policy at the Securities and Exchange Commission during the Biden administration. “So, how do we expect regular Americans who just want their debit card to work to safely use the products?”

The news about Coinbase and Bybit came at the end of a roller-coaster few days in the crypto world. A proliferation of new memecoins — digital currencies based on an internet joke or a celebrity mascot, with no practical function — has prompted widespread complaints about scams.

A memecoin promoted this month by the president of Argentina, Javier Milei, suddenly plummeted in value, setting off a political crisis there and costing investors more than $250 million.

Recently, crypto executives have expressed worry about the spread of these high-risk cryptocurrencies, fretting that they could undo some of the progress the industry has made with lawmakers. Shortly before his inauguration, Trump put his own memecoin on sale — it shot up in value before crashing. More than 800,000 crypto accounts lost money.

“Memecoins aren’t just a casino — they’re worse,” Haseeb Qureshi, a crypto venture investor, wrote on social media last week. “They’re a casino where each slot machine has a different owner, each trying to rip you off as much as they can before you move on to the next one.”

Under the Biden administration, federal regulators oversaw a wide-ranging crackdown on crypto, filing lawsuits against many of the industry’s biggest companies.

At the top of that list was Coinbase, a $60 billion company that went public in 2021. Two years ago, the SEC sued Coinbase, arguing that the digital currencies sold on its platform were securities, just like the stocks and bonds traded on Wall Street. The regulators argued that Coinbase should have to register with the SEC and follow strict rules to protect investors from financial harm.

But the government’s posture toward crypto transformed when Trump took office. The president has his own crypto business, World Liberty Financial, giving him a personal stake in the industry’s success. And he has nominated a crypto industry ally, securities lawyer Paul Atkins, to lead the SEC, which has quickly cut down on its enforcement efforts.

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