Compiled: Block unicorn

Welcome to experience the official beginning of the cryptocurrency regulatory vacuum. That's where we are now, as Coinbase, the largest cryptocurrency exchange in the United States, said it had reached an agreement with staff from the Securities and Exchange Commission (SEC) to dismiss the lawsuit accusing the company of operating an illegal stock exchange (at least that's what Coinbase said yes - we have to wait until the SEC confirms the news after the committee votes).

Coinbase's share price rose 2.2% last Friday morning U.S. time. The news triggered important progress in the cryptocurrency industry in regulatory priorities, especially after the SEC decided to abandon its long-term lawsuit against Coinbase, which appears to have entered a regulatory vacuum. Coinbase CEO Brian Armstrong said in a post on X that the dismissal means Coinbase will not pay any fines or make any changes to its business, adding that the company has spent about $50 million to Litigation of this case.

It looks like top financial regulators are suspending the implementation of decade-old securities rules related to cryptocurrencies as it waits for Congress to formulate new rules – if Congress can pass any rules. And these deliberations in Congress are likely to drag on for a while. Basically, cryptocurrency companies are promised to get regulatory exemptions when Trump’s crypto mission team tries to figure out what the industry is going next.

While all this sounds optimistic to the cryptocurrency industry, things are not bright. Today we see some risk reminders facing cryptocurrencies: Just two hours after Coinbase released the good news, Bybit, the world's third largest cryptocurrency exchange, confirmed that it has been hacked by more than $1 billion, which is in the history of cryptocurrencies. The biggest hack.

When such a hack occurs, panicked investors can divest on a large scale, which could be a fatal blow to the exchange if the exchange does not have enough funds to deal with withdrawal requests. Currently, Bybit CEO Ben Zhou said the exchange has enough funds to cover the hacked amount and is still processing withdrawals normally. Still, both Bitcoin and Ethereum prices fell one after another, while Coinbase’s share price — which rose in the morning after news of the SEC’s action — fell 8% in the afternoon.

This situation may take several days or weeks to become clear and any chain reaction will appear. In addition to revealing the inherent risks of cryptocurrencies, this hacker attack also shows that the current protective measures of traditional financial institutions can protect them from cryptocurrency risks. For banks and traditional stock exchanges that are still strictly regulated by the SEC and federal banking regulators, thisIt's a kind of comfort.

These companies have been arguing that the cryptocurrency industry now has an unfair advantage in regulation. Nasdaq, for example, complained when meeting with the mission team earlier this month, asking the SEC to set a clear deadline for this “lazy” state of cryptocurrency exchanges. The exchange operating giant has previously expressed hope to launch a cryptocurrency business. Banks also want to launch cryptocurrency services for bulk traders and investors, possibly in order to avoid losing customers interested in cryptocurrency, turning to cryptocurrency exchanges and trading companies. But they still need approval from bank regulators to do so.

This week, a heavyweight coalition of bank lobby groups asked Trump to find a way to make sure they don't miss the game. This series of events not only highlights the vulnerability of the cryptocurrency industry, but also reflects the advantages of traditional financial institutions in regulatory and protective measures. With the continuous development of the cryptocurrency market and the gradual formation of the regulatory environment, how to balance innovation and risks in the future remains a question worthy of attention.