Bybit has sued North Korea, its intelligence agency and the Lazarus Group in a U.S. federal court as the exchange seeks to recover assets stolen in the record $1.5 billion crypto hack.

Bybit takes Lazarus Group to US court

Bybit filed the civil lawsuit in the U.S. District Court for the District of Columbia, naming the Democratic People’s Republic of Korea, its Reconnaissance General Bureau intelligence agency and the Lazarus Group as defendants.

The case concerns the Feb. 21, 2025, breach that drained more than 400,000 Ether (ETH) and staked Ether from the Dubai-based exchange. The assets were valued at about $1.5 billion at the time, making the incident the largest recorded cryptocurrency theft.

The FBI attributed the attack to North Korea shortly after the breach. U.S. authorities track the actors involved under the name TraderTraitor and urged exchanges, validators and blockchain firms to block transactions connected to addresses identified in the laundering operation.

Bybit co-founder and CEO Ben Zhou said the exchange had worked with investigators, regulators, other trading platforms and law enforcement agencies since the attack.

“Our focus has never changed: protect our users first, recover what we can, and make sure the people behind these attacks are held accountable,” Zhou said.

Court freezes assets linked to Bybit hack

Alongside the lawsuit, Bybit secured a preliminary injunction covering certain stolen assets held by unidentified individuals and entities listed as John Doe defendants.

The order prevents those defendants from transferring, selling or otherwise disposing of the identified assets while the litigation continues. A preliminary injunction preserves property during a case but does not represent a final ruling on liability or ownership.

Bybit said it would seek further relief as the lawsuit progresses. The company is pursuing the civil claim separately from criminal investigations being conducted by U.S. law enforcement agencies.

The order gives Bybit another route to pursue the stolen funds after months of relying on blockchain tracing, voluntary freezes by industry participants and a bounty program for information leading to recoveries.

Stolen funds became harder to trace

Crypto.news reported in March 2025 that 88.87% of the stolen funds remained traceable, while 7.59% had gone dark and 3.54% had been frozen.

The traceable share later declined as the attackers converted assets into Bitcoin and dispersed them across thousands of wallets. By April 2025, Zhou said 27.6% of the stolen funds could no longer be tracked.

Lazarus-linked wallets used services including cross-chain protocols and crypto mixers to make the transaction trail harder to follow. Bybit previously offered rewards to platforms and investigators that helped identify or freeze the funds.

The exchange also covered the shortfall following the attack through Ether purchases, loans and deposits from industry counterparties, allowing it to continue processing customer withdrawals.

Lawsuit adds to US action against North Korean hackers

The case gives Bybit access to a U.S. civil process while federal agencies continue investigating North Korea’s crypto operations. Any recovery will depend on whether the defendants, exchanges or custodians controlling the identified assets comply with the court order.

North Korean groups stole an estimated $2.02 billion in cryptocurrency during 2025, according to Chainalysis data previously covered by crypto.news. The Bybit attack accounted for most of that amount and pushed the country’s estimated cumulative crypto theft to about $6.75 billion.

The threat continued into 2026. As reported by crypto.news, Lazarus-linked attacks allegedly drained another $577 million from Drift Protocol and KelpDAO in April.

Bybit’s next step will be seeking permanent relief and attempting to recover the assets covered by the injunction. The court has not yet issued a final judgment in the civil case.

A bipartisan ethics proposal aimed at unlocking progress on the US crypto market-structure bill could also produce a large potential tax advantage for President Donald Trump, Bloomberg reported Thursday. The reported benefit centers on how taxes would be handled if the president is required to divest from crypto-related interests under the ethics plan.

According to Bloomberg, an ethics addendum that has not been made public would require Trump to divest from crypto-related businesses. The filing reportedly includes a mechanism that would allow the president to defer capital gains taxes tied to those divestitures, potentially resulting in tax savings in the millions.

Key takeaways

• Bloomberg reports the proposed ethics addendum would require presidential divestment from crypto-related businesses as a condition for advancing the market-structure bill.
• The same proposal reportedly includes a tax-deferral feature that could reduce capital gains taxes, creating a potential windfall for Trump.
• Democrats have raised conflict-of-interest concerns as a major barrier to passing the bill, and the reported tax benefit could renew scrutiny.
• Trump’s most recent financial disclosure (for 2025, released in late June) shows substantial crypto-related earnings tied to licensing of memecoin brands and token sales via World Liberty Financial.

Ethics rules meet a tax question

The market-structure legislation has faced political resistance, largely because of Democratic worries that Trump’s financial involvement in crypto could conflict with the White House’s position on the bill. In an effort to overcome the stalemate, senators have been working on an ethics addendum intended to clarify and narrow potential conflicts.

Bloomberg’s report suggests that the addendum goes beyond divestment requirements by also addressing the tax treatment of any assets the president would have to sell or transfer. “People familiar with the matter,” Bloomberg wrote, indicated the plan would permit Trump to defer capital gains taxes on mandated divestitures, which could translate into substantial savings.

That structure could become a point of contention. While divestment requirements are designed to reduce perceived conflicts, a tax deferral that benefits the president may lead Democrats to argue the ethics safeguards are not strong enough—or not strong in the ways they prefer—despite the divestment trigger.

Why Democrats’ concerns remain central

Democratic objections to Trump’s crypto relationships have been described as a key obstacle to moving the market-structure bill forward. The ethics addendum was reportedly conceived to address those concerns directly, but Bloomberg’s account indicates the reported tax angle may reintroduce doubt about whether the measures genuinely neutralize the president’s incentives.

For readers tracking the bill, the key issue is not only whether divestment occurs, but how effectively the proposed framework separates presidential actions from personal financial exposure—and whether the tax treatment is viewed as consistent with that separation.

Cointelegraph reached out to the White House for comment but did not receive an immediate response.

What Trump’s filings show about crypto exposure

Trump’s disclosures provide context for why the ethics debate has been so politically combustible. His annual financial disclosure report for 2025, released at the end of June, showed Trump received about $1.4 billion in income from crypto-related ventures last year.

According to the 927-page disclosure, the largest share of income came from licensing and sales tied to memecoin activity. Trump reportedly earned roughly $635 million from “royalties” in a “license agreement with Celebration Coins,” with “Official Trump (TRUMP)” cited as an example.

The filing also identified World Liberty Financial as the second-biggest source, generating about $588 million through “proceeds from token sales.”

Beyond those major categories, the disclosure reportedly included $197 from the sale of an equity interest in a stablecoin venture.

Those numbers are likely to shape how lawmakers assess whether any divestment requirement would materially reduce Trump’s financial connection to crypto. If the president’s exposure is largely tied to licensing and token-sale-related income, divestment details—such as what must be sold, what can be retained, and how quickly—become crucial.

World Liberty ownership details add complexity

Alongside the financial disclosure, additional information connected to World Liberty Financial’s corporate structure appears to reinforce the idea that Trump-adjacent entities maintain significant involvement. Disclosures on World Liberty’s website indicate that DT Marks DEFI LLC, described as an entity affiliated with Trump and certain family members, holds “approximately 38% of the equity interests” in the parent company of World Liberty.

This matters for the ethics argument because divestment requirements—if they apply broadly—may need to cover not only direct business operations, but also equity stakes and other positions that could benefit from the success of crypto-related initiatives.

At the same time, the reported tax deferral mechanism highlighted by Bloomberg introduces a separate layer of complexity: even if divestment reduces future exposure, how taxes are handled in the transition could still be perceived as aligned with the president’s personal financial interests.

As senators continue negotiating the bill and the ethics addendum, the next thing readers should watch is whether the divestment and tax-handling provisions are finalized and publicly clarified—and whether Democrats, who have already questioned Trump’s conflicts, accept that the safeguards adequately change the underlying incentives around the market-structure legislation.

SpaceX stock surged 14% on Friday after an analyst upgrade, softer U.S. jobs data, and limited insider selling eased pressure on the recently listed company.

SpaceX stock jumps after Argus upgrade

Space Exploration Technologies Corp. traded at $131.06 as of 3:26 p.m. EDT, up $16.14 for the session. The stock opened near $115 before rising above $120 and accelerating toward $131 during afternoon trading.

Friday’s rally followed a 6.1% gain on Thursday, reversing part of the 13.6% decline recorded after SpaceX released its first quarterly results as a public company.

Argus Research helped drive the latest move by upgrading SpaceX from Hold to Buy. The firm maintained a $160 price target, implying further upside from the stock’s Thursday close.

Argus pointed to SpaceX’s second-quarter performance despite concerns about its planned spending on artificial intelligence infrastructure. The company reported $7.8 billion in revenue, up 92% from a year earlier and above the roughly $6.8 billion expected by analysts.

SpaceX also recorded $3.5 billion in adjusted earnings before interest, taxes, depreciation and amortization, exceeding Wall Street expectations of about $2.1 billion.

Lockup expiration fails to trigger heavy selling

Relief over SpaceX’s first post-IPO lockup expiration also contributed to the rally.

Up to 911.5 million shares held by employees and early investors became eligible for sale on Thursday. The expiration increased the potential public float from about 4.9% to 11.8%, raising concerns that additional supply would push SPCX lower.

That selling pressure did not immediately appear. SpaceX shares instead gained on Thursday and extended the move on Friday, suggesting the market had already priced in much of the unlock risk.

As such, the absence of large-scale insider selling removed a key overhang for the stock. However, more shares are scheduled to become eligible for trading in later lockup tranches.

Short covering may have amplified the rally. Short interest had risen ahead of the company’s earnings and lockup expiration, leaving bearish traders exposed when the anticipated sell-off failed to occur. The scale of short covering during Friday’s session has not been confirmed.

Weak jobs report lifts U.S. growth stocks

A softer U.S. labor report provided a broader market tailwind.

Nonfarm payrolls fell by 23,000 in July, compared with economist forecasts for an increase of about 86,000. The result reduced concerns that the Federal Reserve would raise interest rates again in the near term.

Lower rate expectations tend to support growth companies because they reduce the discount applied to projected future earnings. SpaceX is particularly sensitive to changes in borrowing costs because of its planned spending on launch systems, Starlink infrastructure and AI computing capacity.

The Nasdaq Composite and semiconductor stocks also advanced during the session, indicating that at least part of the SPCX rally reflected a broader return to technology and growth shares.

ARK Invest added further support by purchasing 181,830 SpaceX shares after Wednesday’s decline. The position was valued at approximately $19.7 million based on that session’s closing price.

SPCX approaches key resistance at $131

SpaceX stock reached an important technical area following Friday’s advance.

The 4-hour chart places the 61.8% Fibonacci retracement near $130.67, close to the latest market price. A sustained move above that level could allow buyers to test the next retracement near $138.63.

SPCX also moved above the upper Bollinger Band near $128.20, showing strong short-term momentum but raising the possibility of a pullback if buyers fail to hold the breakout.

The 4-hour relative strength index rose to 59.93, above its signal average of 43.39 but below the 70 level generally associated with overbought conditions. Immediate support sits near $128, followed by the $119.34 Fibonacci level and the moving average around $115.24.

Despite the rebound, SpaceX stock remains well below its June peak above $225. The next test will be whether the shares can reclaim the company’s $135 IPO price while the market absorbs additional insider unlocks.

SharpLink CEO Joseph Chalom has opposed an Ethereum proposal that could eventually eliminate issuance-based staking rewards, warning that the change may weaken ETH’s appeal to institutions and raise capital costs across decentralized finance.

SharpLink challenges Ethereum staking proposal

Chalom said the proposed issuance model would damage one of Ethereum’s main economic advantages by gradually destroying part of the rewards paid to validators.

The SharpLink executive referred to the plan as EIP-8363. However, the mechanism he described matches EIP-8361, the Tapered Issuance Burn proposal previously covered by crypto.news.

EIP-8361 would burn a growing percentage of consensus-layer rewards as more ETH enters staking. The burn rate would reach 100% when approximately 60.25 million ETH, or about half of Ethereum’s current supply, is staked.

Validators would then stop receiving newly issued ETH but could continue earning transaction priority fees and maximal extractable value. The proposal includes an estimated 18-month transition intended to prevent an immediate decline in returns.

Chalom said Ethereum currently offers a variable staking yield of approximately 2.75%. According to his assessment, transaction-related earnings account for only about 15% of total validator rewards, leaving operators heavily dependent on issuance.

Zero ETH yield could pressure DeFi collateral

Chalom argued that Ethereum’s staking yield serves as a benchmark for interest rates across its on-chain economy. Liquid staking tokens use validator rewards to generate returns while allowing holders to deploy the underlying value across lending and other DeFi markets.

Around $35 billion is currently locked in liquid staking products, according to figures cited by Chalom. He warned that reducing issuance rewards to zero could increase the effective cost of capital and make returns negative after infrastructure expenses and other operational costs.

That pressure could cause collateral to move toward assets that continue producing yield. Independent validators and smaller staking operators may face the greatest impact because they lack the scale and additional revenue sources available to larger providers.

The proposal’s authors have taken a different view. They argue that Ethereum’s current issuance curve continues encouraging additional staking even after more deposits provide limited security benefits.

“The current issuance curve continues offering a yield of around 1.5% even if nearly all ETH is staked,” the authors wrote in the proposal.

EIP-8361 remains a draft and has not been approved for inclusion in an Ethereum network upgrade.

SharpLink says yield gives ETH an institutional edge

Chalom also argued that native yield is one reason institutions may choose Ethereum over Bitcoin. Bitcoin can provide price exposure and serve as a treasury reserve, but it does not produce protocol-native returns for holders.

That distinction is central to SharpLink’s own strategy. As reported by crypto.news, the Nasdaq-listed company had staked nearly 900,000 ETH and earned more than 18,000 ETH in cumulative rewards by April.

SharpLink has also expanded beyond basic validator returns. In May, it committed $100 million to a $125 million on-chain yield fund managed by Galaxy Digital. The fund plans to deploy capital across DeFi liquidity protocols while preserving SharpLink’s broader ETH exposure.

Chalom said issuance represents a transfer of value to validators that secure Ethereum rather than a cost paid to an outside party. Burning those rewards, in his view, would remove value from network participants instead of redistributing it within the ecosystem.

US Ethereum products have started distributing yield

The dispute comes as staking becomes more accessible to U.S. institutional investors. Grayscale completed the first staking-reward distribution by a U.S.-listed Ethereum exchange-traded product in January.

Its ETHE product distributed approximately $9.4 million in cash generated from staking activity. The structure allowed shareholders to receive Ethereum-linked income without operating validators or directly managing staked ETH.

Chalom said SharpLink agrees with the proposal authors’ goal of limiting excessive staking and supporting ETH scarcity. However, he argued that Ethereum should pursue that objective through its existing base-fee burn rather than changing the protocol’s issuance-based reward structure.

ETH traded near $1,916 at the time of writing, with no clear price reaction directly linked to SharpLink’s opposition. Debate over the proposal is expected to continue before developers consider whether it should advance toward a future network upgrade.