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GM. This is Milk Road, your crypto referee (we tally the industry’s wins and losses, and send them straight to you).

Here’s what we got for you today:

• ✍️ SEC drops Coinbase case

• ✍️ Bybit hacked for $1.4B

• 🎙️ The Milk Road Show: Are You Over Allocated to L1s and Under Allocated to Apps? w/ Electric Capital Co-Founder

• 🔥 Want to put your brand in front of 300k+ of the smartest/coolest people in crypto? Apply to sponsor Milk Road here! 

SEC STAFF AGREE TO DISMISS THEIR COINBASE LAWSUIT 🧑‍⚖️

• No more overreaches of authority

• No more fear of getting punished for simply existing

• And a big ol’ green light to ‘do our own thing’ without fear of repercussions

No, I’m not talking about the time my mom broke up with her deadbeat boyfriend, Dave. 

(Though it had largely the same result.)

This is better! SEC staff have just agreed to dismiss their lawsuit against Coinbase, pending final approval from the SEC Commission.

ICYMI: Back in June 2023, the SEC alleged that Coinbase was enabling the trade of 13 unregistered securities (including Solana, Near, and Polygon).

Which was particularly hypocritical, considering that in 2021, the SEC allowed Coinbase to go public – with many of these alleged ‘securities’ already live on its platform.

On a ‘local’ level – this was bad for Coinbase. On a much broader scale, this sent a message to any other company in the US looking to build in the crypto space:

“Do not start. Do not progress. We will sue you”.

The TL;DR of what this now enables?

• Dropping this lawsuit acts as a green light for the rest of the US crypto industry to start building

• This was stopping companies/institutions from investing in the broader crypto ecosystem (that fear is now lifted)

• This will allow Coinbase to start building both off and onchain without fear of litigation (shackles off, hounds released)

• We wouldn’t be surprised to see a whole bunch of fresh capital headed for Coinbase in the coming days/months (though that will likely hit once the dismissal is confirmed 👇)

This is almost all upside. Almost. The only real downside is this:

Since the case won’t proceed to a final ruling, no binding legal precedents will be set (for now) – meaning we won’t get legal confirmation that the tokens in question definitely are not securities.

(Though legal precedent is a double edged sword – the courts could have ruled in the SEC’s favor and classed those tokens as securities).

Either way you slice it, this is a massive morale boost for the US industry, which could – and most likely will – have global ripple effects (since crypto is a global asset class)!

In a nutshell: The crypto industry now has big “Dave’s not going to be coming around anymore” energy.

It’s electric!

BYBIT HACKED FOR $1.4B 🚨

I guess crypto is having a ‘Thanos moment’ today (“balance in all things”).

The Coinbase news is great! This? Not so much…

At around 9:52 AM EST today, Bybit was hacked for ~$1.4B worth of $ETH and various liquid staked $ETH tokens.

With Bybit’s CEO, Ben Zhou, confirming the hack:

So how’d it happen?

This was a super-sophisticated hack! The attacker ‘spoofed the UI’ of Safe (a widely used wallet interface), to re-route the multi-sig transaction.

Here’s what that jumble of tech-babble actually means…

👉 Spoofed the UI: The hacker was somehow able to insert a fake user interface (UI) that looked and felt like Safe’s UI, tricking Bybit’s staff into thinking the transaction was safe.

👉 Multi-sig transaction: to protect against single users making large (potentially shady) transactions, big firms like Bybit require multiple people to sign sizable transactions – so there’s not a single point of failure.

👉 Re-routing: There was new code added to the spoofed UI that allowed the hacker to re-route the funds to their own wallet.

🎙️ We just covered details of the hack (and more) on today’s episode of The Milk Road Show, with Avichal.

That’s the bad news…the good news (for now) is this:

And the silver lining? $1.4B of buy pressure might just hit Ethereum (lol)…

All jokes aside, this is a tough situation for Bybit. They’ve been “one of the good ones” in this space for many years.

(And there aren’t a lot of companies in crypto that we can say that about – they’re a company that we use and recommend ourselves.)

Our hope is that Bybit can bounce back from this (it sounds like their revenues can pay for this loss if they don’t get it back) and there’s no additional contagion that comes along with it.

So far, it appears that the coast is clear, but we will continue to cover this story as things unfold.

We’re rooting for Bybit to bounce back strong from this!

P.S. What are your thoughts on all of this? Reply to this email and give us your take!

BITE-SIZED COOKIES FOR THE ROAD 🍪

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Check the date before reading this. It’s not April 1st. Saylor wants the US to buy 20% of the Bitcoin supply.

Good news! Crime isn’t legal. SEC launches cyber and emerging technologies unit to monitor bad actors within crypto (and other sectors).

The SEC is “very, very interested” in staking — in a good way! The SEC is apparently learning everything it can about staking (hopefully to approve it within ETFs)

Agoric launches Fast USDC—cross-chain transfers in seconds. No more delays, no more missed opportunities.*

*This is sponsored content.
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.