The good news for cryptocurrency investors arrived just after 8 a.m. on 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 percent by the end of the day.
This split-screen contrast was a telling illustration of the state of crypto in 2025. Even as President 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.
Last week, a memecoin promoted 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, Mr. 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 this 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 S.E.C. 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 S.E.C. and follow strict rules to protect investors from financial harm.
But the government’s posture toward crypto transformed when Mr. 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, the securities lawyer Paul Atkins, to lead the S.E.C., which has quickly cut down on its enforcement efforts.
In a regulatory filing on Friday morning, Coinbase announced that the S.E.C. had agreed to drop its lawsuit without imposing any financial penalty. (The agreement requires approval by the agency’s commissioners, a process that is expected to be a formality.)
In celebratory social media posts, industry executives declared the end of a “siege against crypto” by the federal government.
The euphoria didn’t last long. Bybit, which is based in Dubai and processes tens of billions of dollars in daily transactions, revealed that thieves had breached its system, stealing huge quantities of Ether.
Crypto has a long history of damaging hacks, but the theft from Bybit dwarfed the previous record, when thieves stole $611 million in cryptocurrencies from a platform called PolyNetwork in 2021.
Even outside the crypto world, there is little precedent for a theft so big. “It may even be the largest single theft of all time,” said Tom Robinson, a co-founder of Elliptic, a crypto analysis firm.
On social media, Bybit’s chief executive, Ben Zhou, assured customers that the company was still solvent. “Even if this hack loss is not recovered, all of clients assets are 1 to 1 backed,” he wrote. “We can cover the loss.”
In a livestream on Friday, Mr. Zhou, who was swigging Red Bull, said the “affected amount” was 401,000 Ether, or about $1.1 billion. Crypto forensics experts estimated the total at closer to $1.5 billion, based on analysis of public transaction records.
Bybit does not offer services to customers in the United States, according to its website. The company’s representatives did not immediately respond to a request for comment.
A crypto research group, Arkham Intelligence, said North Korean hackers were behind the Bybit breach. Attacks by North Korean groups have plagued the industry for years.
The price of Bitcoin plunged from about $100,000 early Friday to just over $95,000 that evening, a 5 percent drop. Other cryptocurrencies fell even further.
And a day of celebration for Coinbase ended with a stock market plunge: By the time the market closed on Friday, its shares were trading at their lowest price since November.