Bybit Blame Game

Plus, 📈 Bitcoin Strategic Reserve on fast track, 📜 U.S. House strikes down IRS DeFi rule, ⏱️ Ripple ETF delays pile up, and more!

Author

Juan Aranovich
March 12, 2025

Hi! In today’s edition:

  • 🧐 OKX says no Bybit probe

  • 🏦 BTC reserve: Coming soon 

  • 🚮 Congress discards DeFi tax rule

  • 🕰️ XRP fund approvals face delays

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By Tikta

OKX Denies Being Probed Over Bybit Hackers’ Laundering

Major crypto exchange OKX denied on Tuesday that it is the subject of an investigation by European Union regulators over its alleged role in laundering funds stolen from Bybit last month.

Bloomberg reported on Monday that OKX’s Web3 service was used to launder around $100 million from the $1.5 billion Bybit hack. 

The Digital Finance Standing Committee of the European Securities and Markets Authority was said to be scrutinizing whether that service fell under its Markets in Crypto-Assets (MiCA) regulations, and, if so, what penalties to impose on the exchange for any violations found. 

OKX called the article “misleading” and accused Bybit of spreading misinformation.

“We want to clarify for our community that (1) OKX is not being investigated (2) This is simply a case of Bybit's lack of security know-how (3) Our Web3 wallet services are no different than what is offered by other industry players,” OKX said on X.

OKX founder Star Xu reiterated those points in his own X posts, saying that Bybit had built its own Web3 wallet and decentralized exchange base using OKX’s API interface. 

Bybit founder Ben Zhou responded to Xu’s comments, clarifying that Bybit hadn’t made any direct statements to Bloomberg and saying the article was probably quoting from the Lazarus Bounty website, which Bybit had set up.

“We believe in facts and stated facts only, what the hacker did was to use a number of bridges to convert the hacked ETH to BTC, as we show here, such as Thor[,] the biggest bridge that they used. I hope this clarifies,” Zhou said.

Bitcoin Strategic Reserve Timeline is ‘Days and Weeks’: David Bailey

The U.S. Strategic Bitcoin Reserve will be set up sooner than the market expects, says David Bailey, CEO of BTC Inc. and Bitcoin Magazine.

Bailey, who was one of the attendees at President Donald Trump’s White House Crypto Summit last week, said on X: “The admin is ‘moving at the speed of tech’ and ‘acting with urgency.’”

He said the timeline for the implementation of the executive order signed last week to establish the Strategic Bitcoin Reserve and a Digital Asset Stockpile, was “measured in days and weeks, not months or years.”

The reserve aims to solidify Bitcoin's role as a strategic asset for the U.S., akin to gold, without burdening taxpayers.

Bitcoin had recovered 2.9% in the 24 hours to midnight Tuesday ET, regaining some of the ground lost in Monday’s selloff. However the OG crypto is still facing persistent sell pressure, particularly from newer buyers, according to blockchain analytics firm Glassnode. 

“Heightened volatility, weak demand, and liquidity constraints have prevented meaningful accumulation from restarting, reinforcing downside risks,” Glassnode said on X.

The U.S. House of Representatives voted on Tuesday to overturn an Internal Revenue Service rule requiring DeFi platforms and other crypto entities to act as brokers, collecting and reporting taxpayer and transaction information. 

The bipartisan vote passed by 292-132 following similar approval by the Senate last week. 

The House resolution, advanced under the Congressional Review Act, aims to nullify the Biden administration-era rule, which was finalized in December 2021.

Supporters of the repeal argue that the rule imposes unrealistic compliance burdens on DeFi platforms, which lack the infrastructure to collect such data.

“The House just passed my bill to repeal the IRS DeFi Broker Rule in a strong, bipartisan fashion,” said Republican Rep. Mike Carey, one of the lawmakers leading the effort. “Now we need to get it on @POTUS’s desk and signed into law.”

Four XRP ETFs Face Delay in SEC Approvals Process

The U.S. Securities and Exchange Commission has delayed decisions on four XRP exchange-traded fund applications filed by Grayscale, 21Shares, Bitwise, and Canary.

The regulator said it needed a longer period to determine whether the ETFs should be approved or denied, and it has extended its timeframe for decisions on them by 45 days.

The delay comes as Franklin Templeton joins the race to launch an XRP ETF, filing an S-1 form to launch its own fund tracking the asset. Franklin Templeton’s filing takes the total number of XRP ETF proposals on the table to 17. 

Despite news of the SEC pushing its decision deadline back, XRP rallied 6.1% in the 24 hours to midnight Tuesday ET to trade at $2.17.

Bits + Bips: Trump Has Spread Uncertainty Across All Markets. What’s Next?

The markets are a bloodbath.

If you’re feeling lost in the markets right now, you’re not alone. Stocks are getting crushed, bonds are sliding, and crypto isn’t escaping the carnage. The question is: why is everything selling off—and where does it go from here?

One thing is clear: the next market move is extremely hard to predict. Between Trump’s economic policies, inflation worries, and DOGE’s cuts, there’s a storm of conflicting signals.

So, is this pain temporary? Or are we looking at a long trend downward?

Listen to the episode on Apple Podcasts, Spotify,Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

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  • 🇺🇸 Republican U.S. Senator Cynthia Lummis reintroduced the Bitcoin Act to establish a U.S. Strategic Bitcoin Reserve, proposing a decentralized network of secure vaults and a phased acquisition plan to amass 5% of Bitcoin’s total supply.

  • 📊 Cboe BZX Exchange filed to amend Fidelity’s Ethereum ETF to include staking on Tuesday, a move that could generate additional income as the fund sees declining assets under management amid Ethereum’s price slump.

  • ⚡ Circle launched its Cross-Chain Transfer Protocol V2, cutting USDC settlement times between Ethereum and layer 2 networks from up to 19 minutes to just seconds, enhancing cross-chain liquidity for digital dollar transactions.

  • 🔄 Collapsed exchange Mt. Gox moved another $930 million of bitcoin to new wallets ahead of its October creditor repayment deadline, following last week’s $1 billion reshuffle, raising concerns about market impact as it still holds $2.9 billion of assets.

  • ₿ Ethereum layer 2 Starknet is partnering with Bitcoin wallet Xverse to integrate DeFi capabilities on Bitcoin, aiming to enhance programmability and scaling while awaiting potential network upgrades such as OP_CAT.

  • 📉 Robinhood’s crypto trading volume plummeted 29% in February as retail investors retreated during the market downturn, although activity remained 122% higher than the same month last year.

  • 🛑 The Ethereum Foundation on Tuesday denied speculation that it had transferred $58 million in ETH to Maker to manage liquidation risks, dismissing claims made by blockchain analysts as inaccurate.

  • 🧙‍♂️ Bitcoin Ordinals project Taproot Wizards is set to auction 2,121 of its hand-drawn wizard NFTs, reviving interest in Bitcoin-based digital collectibles two years after hey were inscribed on the original blockchain.

  • 🏅 Bahrain-based crypto exchange ATME launched its first tokenized real-world asset with gold-backed tokens on Tuesday, allowing investors to trade or redeem physical gold as demand for tokenized commodities rises. 

  • 🎮 Sony’s blockchain division is integrating four LINE mini-app games into its Ethereum-based Soneium layer 2 network, aiming to enhance in-game transactions and onboard LINE’s 200 million users into Web3

  • 💵 Crypto payments firm Mesh secured $82 million in a series-B round led by Paradigm, with most funds settled in PayPal’s PYUSD stablecoin, as it scales its global stablecoin payment infrastructure.