In these final weeks of the month, the crypto market took a hit on multiple fronts, with events that shook investor confidence and raised pressing concerns about security and regulation.
In this article, we’ll dive into the LIBRA token crash that put Argentina’s President Javier Milei under investigation; Bybit lost $1.5 billion in a massive hack and Solana’s inflation spiked 30% after a controversial fee model change. Adding to the pressure, Bitcoin plunged 20% from its January peak; a dangerous seed phrase scam is spreading, prompting a warning from Binance’s CEO. Amid the chaos, Tron’s latest move offers a rare bright spot.
Let´s explore more!
The Scandal Involving the LIBRA Cryptocurrency
The United States Department of Justice (DoJ) has launched an investigation into the cryptocurrency Libra, promoted by Argentine President Javier Milei. This action came after Milei promoted the LIBRA token on his social media platforms on February 14, leading to a rapid surge in its value. Therefore, major stakeholders sold off large amounts of LIBRA, causing its value to plummet by 93% in approximately 5 hours, resulting in significant financial losses for numerous investors.
Prosecutor Taiano has requested reports from the Central Bank of Argentina and the National Securities Commission. He has also involved the cybercrime unit to trace online activities related to the LIBRA operation. Besides President Milei, five businessmen associated with the project are being investigated. These individuals include Mauricio Novelli, Sergio Morales, Hayden Mark Davis, Julian Peh and Manuel Terrones Godoy.
In response to the allegations, President Milei has denied any wrongdoing, saying he shared information about LIBRA without fully understanding the project’s details. He emphasized that he had no direct involvement with the cryptocurrency and characterized his actions as routine support for private sector initiatives. Despite the scandal, Milei still has strong public support, with approximately 50% of the population still backing him.
This incident has reignited debates on cryptocurrency regulation and the accountability of public figures who promote high-risk financial products. It highlights the dangers of rug pulls, where developers or insiders manipulate hype to attract investments before abruptly abandoning a project, leaving investors with worthless tokens. The speculative nature of meme coins, coupled with minimal regulatory oversight, makes them particularly vulnerable to such schemes, underscoring the urgent need for greater transparency and investor protection in the crypto market.
Hackers stole 1.5 billion dollars from the Bybit exchange
On February 21, Bybit, a prominent cryptocurrency exchange based in Dubai, experienced a significant security breach resulting in the theft of approximately $1.5 billion worth of Ethereum. This incident is considered one of the largest digital heists to date.
The FBI has confirmed that North Korean hackers, specifically the Lazarus Group, were behind a massive cryptocurrency theft from Bybit. The hackers infiltrated Bybit’s security by exploiting a vulnerability in a Safe{Wallet} developer’s system, which allowed them to execute fraudulent transactions. No indication of compromise was identified in Bybit’s infrastructure. The investigation is still ongoing to further confirm the findings.
Around 401,000 Ethereum tokens were stolen, and they were quickly converted into Bitcoin and other cryptocurrencies, spreading the funds across numerous blockchain addresses to obscure their trail. The FBI expects further laundering attempts before conversion to traditional currency.
After the incident, Bybit’s CEO, Ben Zhou, assured customers that their funds were safe and that the company would cover any losses. He has launched a bounty program offering up to $140 million for information that could help track and freeze the stolen assets.
Since being hacked, Bybit has received ~446,870 $ETH($1.23B) through loans, whale deposits and ETH purchases.
This event shows the growing sophistication of North Korean cyberattacks and the persistent security challenges faced by cryptocurrency exchanges, even with strong protections. It highlights the need for continuous security improvements, well-trained employees and industry collaboration to prevent advanced threats.
SOL inflation leaps 30% one week after changes in fee distribution model
Solana’s (SOL) annual inflation rate has recently increased by 30.5% following the implementation of a new fee distribution model on February 12, 2025. This change, introduced through Solana Improvement Document 96 (SIMD 96), directs all priority fees to network validators, whereas previously, half of these fees were used to burn SOL tokens. As a result, the daily amount of SOL burned has significantly decreased from nearly 18,000 SOL to just 1,000 SOL, leading to an increase in the annualized inflation rate from 3.6% to 4.7%.
This adjustment aims to enhance validator incentives and discourage off-chain agreements that could undermine network integrity. However, it has also impacted the distribution of real economic value (REV) among stakeholders. Prior to this change, token holders received approximately 67% of the network’s REV, with validators receiving about 30%. Post-implementation, the distribution shifted to 46% for token holders and 51% for validators.
In response to concerns about increased inflation, the Solana community is considering SIMD 228, a proposal to introduce a dynamic inflation mechanism. This mechanism would adjust the inflation rate based on the proportion of staked SOL tokens, potentially reducing inflation if staking participation exceeds certain thresholds.
Solana’s inflation rate increase directly impacts its market positioning by altering the balance of economic incentives between token holders and validators. While the shift strengthens validator rewards and network security, it reduces the deflationary pressure on SOL, which may affect its attractiveness to long-term investors.
Binance’s CEO and the New “share-seed-phrase” scam
The “share-seed-phrase” scam has been active since at least December 2024. On December 23, 2024, Kaspersky reported on this deceptive practice, highlighting how scammers publicly share seed phrases in YouTube comments to lure victims into transferring funds to compromised wallets.
In February 2025, the scam gained further attention when Binance CEO Richard Teng issued a warning about the scheme. On February 19, The Coin Republic detailed how fraudsters impersonate cryptocurrency professionals, urging users to import provided seed phrases to secure their assets, only to steal the funds once transferred.
In this deceptive practice, scammers impersonate crypto professionals and approach victims under the guise of offering security assistance. They claim that a user’s account has been compromised and instruct them to import a specific seed phrase to secure their assets. Believing they are protecting their funds, the unsuspecting victims transfer their crypto to this supposedly safe wallet. However, the fraudsters drain the assets once the transaction is complete, leaving no trace behind.
Binance CEO Richard Teng has addressed this issue, emphasizing the importance of vigilance against such scams. He stated that institutional interest continues to rise, ETF inflows remain strong, and new applications are filed regularly. Teng reassured users that while crypto markets react to macroeconomic shifts, they have consistently demonstrated resilience over time.
To protect yourself, always be cautious of unsolicited messages, never share your seed phrase, and verify communications through official channels. Remember, legitimate entities will never ask for your private keys or seed phrases.
Bitcoin’s Decline and the Impact on the Crypto Market
Bitcoin’s price has dropped from its January peak of $109,000 to around $83,000 by the end of February 2025, marking a 20% decline.
Several factors are contributing to this downturn:
The delay in expected pro-crypto policies from the Trump administration has led to disappointment among investors. Security concerns have also played a role, with a major $1.5 billion hack at the Bybit exchange shaking confidence in the market. Additionally, broader economic uncertainties, including new tariff threats from Trump, have increased market volatility.
On February 27, Bitcoin hit a low of $83,236, until the moment of this article. It hadn’t reached his ATL since November.
While some analysts believe the downturn is temporary and could present a buying opportunity, others warn that if regulatory uncertainty and macroeconomic concerns persist, Bitcoin’s recovery could take longer than anticipated. The next few weeks will be critical in determining whether Bitcoin stabilizes or faces further downside pressure.
Influence of U.S. policies on the Crypto Market
On February 25, Bitcoin dropped 6.9% to $89,060 after Donald Trump reaffirmed 25% tariffs on imports from Mexico and Canada, along with an additional 10% tariff on Chinese products.
These measures aim to combat drug trafficking, particularly fentanyl, and encourage domestic production in the U.S. Canada and Mexico have already taken steps to strengthen border security, but Trump’s decision has raised concerns about potential increases in consumer prices and negative impacts on the global economy. China criticized the move, warning of the mutual damage that a trade war could cause.
The announcement raised worries about inflation, raising the possibility of higher interest rates by the Federal Reserve, reducing liquidity and hitting risk assets.
Other cryptocurrencies also fell roughly, with Ethereum going down 8.8% to $2,427. The crypto market capitalization shrank to $3.02 trillion, and Bitcoin ETFs in the U.S. saw $516.4 million in outflows, mainly from Fidelity and BlackRock funds.
Experts say that trade issues, inflation, and high-interest rates are making investors choose safer options, causing crypto prices to drop faster.
Next Steps…
Tron Announces Gas-Free USDT Transactions: New Feature Launching Next Week
The Tron blockchain is about to launch a feature called “Gas Free” for transactions with the stablecoin Tether (USDT). Announced by Justin Sun, founder of Tron, on February 25, 2025, this feature will allow users to carry out USDT transactions without needing to hold TRX to cover gas fees. Is set to launch within the next week according to Sun’s February 25 announcement on X.
Historically, Tron was known for its low fees on USDT transactions, offering a cost-effective alternative to the Ethereum network. However, by the end of 2024, gas fees on the Tron network increased significantly, surpassing $9 per transaction in December. This rise made transactions on Tron more expensive than on other blockchains, such as Ethereum.
To address this issue and make transactions more accessible, Tron had been developing gas-free transaction solutions since mid-2024. With the introduction of the “Gas Free” feature, USDT transfers on the Tron network are expected to become an attractive option for users again, eliminating the need for TRX to cover transaction fees.
In summary…
This week in the crypto market has underscored the persistent challenges and vulnerabilities within the industry. These events highlight the need for stronger security, transparency, and investor education as the crypto market evolves. The coming weeks will likely bring further responses from regulators, exchanges, and blockchain communities as they work to rebuild trust and strengthen protections in an increasingly complex digital financial landscape.
