The SEC is dropping its lawsuit against Coinbase, according to an announcement from CEO Brian Armstrong. However, the Commission’s lawsuit against Ripple remains open for now, raising more questions.

Both lawsuits deal with certain cryptoassets’ status as securities, not commodities. For Coinbase, this interpretation would hamper operations, but it could prove fatal for the XRP issuer.

SEC Drops the Coinbase Suit

Brian Armstrong, the founder and CEO of Coinbase, is having a good day today. Recently, the company has been advocating for better US crypto regulation, and it achieved a major milestone today. Armstrong announced that the SEC was dropping its 2023 lawsuit.

“Great news! After years of litigation, millions of your taxpayer dollars spent, and irreparable harm done to the country, we reached an agreement with SEC staff to dismiss their litigation against Coinbase. Once approved by the Commission (which we’re told to expect next week) this would be a full dismissal, with $0 in fines paid and zero changes to our business,” he said.

Armstrong called this development “hugely vindicating,” claiming it was a real challenge to resist the Commission’s “mafia tactics” under the previous leadership.

He also said that this suit is a groundbreaking development for the future of crypto in the US because it would’ve substantially hindered exchanges’ ability to do business nationwide. For Coinbase, the SEC legal battle appears over.

However, the SEC has another active crypto lawsuit – its fight against Ripple. The two suits have major similarities, both hinging upon the notion that certain cryptoassets are securities. This interpretation opens crypto-related businesses to much stricter regulation.

How Will the Coinbase Settlement Impact the XRP Lawsuit?

For Coinbase, the issue is that the SEC insisted upon a lack of clarity with these classifications, essentially claiming that it could demand the exchange delist any token at a whim. In the Ripple case, however, it alleged that the firm was forbidden from raising funds through XRP token sales without registration.

In both instances, the SEC leaned on a lack of clear standards for crypto.

Even before today’s announcement, the SEC had already signaled it would drop charges against Coinbase, but the process has been murkier for Ripple. The Commission recently removed the XRP lawsuit from its website, and may be waiting for a few broader changes to dismiss it outright.

Ultimately, however, the Ripple case may be more complicated. The SEC alleged that Coinbase was hosting certain unlawful assets, and complying would severely impact the business model for all exchanges.

In the latter suit, it claimed that selling XRP was itself a securities violation, which would severely impact a great number of token projects.

The SEC is already taking a few measures to lay the groundwork for a broader policy realignment. Commissioner Peirce claimed that it wants to formally remove some tokens’ security status.

Also, the Commission is looking to reduce its crypto enforcement activities generally. Overall, the Coinbase case does provide some optimism for the XRP community.

According to the latest reports, crypto exchange Bybit suffered a major hack, and over $1.46 billion in Ethereum was withdrawn from its hot wallets. 

This could potentially be the biggest security breach in crypto history. 

Bybit Hack: Everything We Know So Far

On-chain data shows that a staggering 401,346 ETH (valued at $1.13 billion) was reportedly transferred from Bybit’s hot wallet to an unknown wallet address. The amount is now being liquidated, which also immediately impacted Ethereum’s market price. 

This large transfer immediately sparked concerns that Bybit had suffered a breach, especially considering the significant value of the assets involved.

Bybit CEO Ben Zhou confirmed the reports on social media.  

“Hacker took control of the specific ETH cold wallet we signed and transferred all ETH in the cold wallet to this unidentified address. Please rest assured that all other cold wallets are secure. All withdraws are normal,” Zhou wrote on X (formerly Twitter).

According to his statement, Bybit’s Ethereum cold wallet was hacked because the attackers tricked their security system. The wallet signers (authorized people) saw a fake user interface that showed the correct address, making them believe they were approving a normal transfer. 

However, in reality, they were unknowingly signing a change to the smart contract logic, which gave the hacker control over the wallet. As a result, all the ETH in that cold wallet was transferred to an unknown address. 

“The biggest hack ever by far. Very similar to the WazirX $235 million access control attack,” Deddy Lavid, CEO of blockchain security firm Cyvers, told BeInCrypto.

Meanwhile, the hack immediately impacted Ethereum’s market price. As large volumes of the stolen ETH were liquidated, the altcoin fell over 4% in a straight line.

According to Arkham data, nearly $200 million worth of Lido Staked Ether (stETH) were sold within the first 30 minutes. Security experts have told BeInCrypto that this attack was almost identical to last year’s WazirX and Radiant Capital hack.

“Two minutes before the outflow transactions, the hacker re-implemented their Safe multisig wallet to delegate calls to the hacker’s malicious contract. This was likely caused by blind signing while attempting to execute a legitimate transaction. From that moment, the hackers had full control over the wallet and no longer needed additional signatures. This attack is very similar to those on WazirX and Radiant Capital,” Meir Dolev, Co-Founder and CTO of Cyvers, told BeInCrypto. 

It appears that Bybit fell victim to the same malicious techniques that caused the biggest hacks of 2024. 

This is an ongoing story. More information will be provided as the investigation unfolds.