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Today in crypto: US takes control of Russian crypto exchange

Trump’s Bitcoin Reserve triggers volatility, while New York lawmakers crack down on memecoin scams

The Crypto ProfessorProfile
By The Crypto ProfessorMar. 7th - 2pm
4 min read
New York cityscape
New York legislators have introduced bill targeting rug pulls, seeking criminal penalties for fraudulent crypto projects. Photo: Unsplash / Michael Discenza

Bitcoin drops as Trump’s Bitcoin Reserve sparks volatility

Bitcoin tumbled 5.7% in an hour on Thursday, falling to $85,000 after President Donald Trump signed an executive order creating a Strategic Bitcoin Reserve. The decline came after Bitcoin surged past $92,000 earlier this week amid speculation about the policy.

The executive order authorizes the U.S. government to hold Bitcoin seized from criminal and civil forfeitures, forming a reserve that White House AI and Crypto Czar David Sacks called a “digital Fort Knox.” Sacks emphasized that the reserve would be built using 200,000 Bitcoin already in government possession—valued at $17.7 billion—without additional taxpayer funding.

The announcement initially fueled a rally but quickly triggered a sell-off, with traders taking profits and reassessing how the U.S. might manage its Bitcoin holdings. Bitcoin has since rebounded slightly to $87,200, according to CoinGecko.

The market downturn extended across major cryptocurrencies:

  • Ethereum fell 6.1% to $2,100
  • Solana dropped 6.8%
  • Dogecoin declined 5.8%
  • BNB fell 3.6% to $576
  • Cardano suffered the worst drop, plunging 13.8% to $0.81

Despite the sell-off, Bitcoin remains up nearly 30% year-to-date, driven by institutional inflows into spot Bitcoin ETFs and growing mainstream adoption.

US Secret Service seizes Russian crypto exchange Garantex

In a major crackdown on illicit crypto activities, the U.S. Secret Service has seized and shut down Russian crypto exchange Garantex, citing ties to sanctioned banks and criminal networks.

Attempts to access Garantex’s website now result in connection timeouts, with previous visitors seeing a U.S. government seizure notice. The Secret Service worked with international law enforcement agencies to execute the takedown under a warrant from the Eastern District of Virginia.

Garantex has long faced scrutiny for allegedly facilitating money laundering through darknet marketplaces and ransomware groups. Stablecoin issuer Tether preemptively froze $28 million in USDT held on the exchange just a day before the shutdown, further cutting off its liquidity.

In response, Garantex’s leadership claimed on Telegram that the platform had been forced to suspend all services, blaming Tether for the frozen funds but vowing to continue operating.

This marks another blow for Russia-linked crypto exchanges facing Western sanctions. The U.S. Treasury previously sanctioned Garantex in 2022, linking it to $100 million in illicit transactions, including $6 million tied to Russian ransomware group Conti and $2.6 million connected to darknet marketplace Hydra.

New York lawmakers propose anti-rug pull legislation

New York legislators have introduced one of the first bills targeting rug pulls, seeking criminal penalties for fraudulent crypto projects.

Assembly member Clyde Vanel filed Bill A06515 to establish new legal definitions for “virtual token fraud”, aiming to crack down on developers who abandon projects and drain investor funds.

The legislation arrives amid growing outrage over memecoin scams, including the recent LIBRA token collapse, where Argentine President Javier Milei’s endorsement led to a 94% crash and $107 million in insider profits.

Crypto security expert Anastasija Plotnikova, CEO of Fideum, said rug pulls should fall under existing fraud laws but welcomed the bill’s explicit legal framework.

Bybit hack traced to compromised developer laptop

New details have emerged about last month’s $1.4 billion Bybit hack, revealing that the breach originated from a compromised developer laptop, according to findings from multi-signature wallet provider Safe.

Safe’s investigation, conducted in collaboration with cybersecurity firm Mandiant, confirmed that the attacker gained initial access on February 4 when a developer’s workstation interacted with a malicious Docker project. This breach allowed hackers—suspected to be North Korea’s Lazarus Group, according to on-chain analysts and the FBI—to hijack active AWS session tokens and bypass multi-factor authentication.

Two weeks later, malicious JavaScript code was injected into Safe’s website, ultimately leading to the February 21 exploit that drained Bybit’s funds.

Safe has since reset its entire infrastructure and introduced stricter security protocols, including enhanced transaction verification systems. However, the company warned that users must remain vigilant when signing transactions, stating: “The act of signing the transaction itself is the last line of defense.”

The Bybit hack remains the largest crypto theft in history. The exchange is actively tracking stolen funds and has offered bounties of up to $140 million to assist in recovering assets.

What’s next for crypto markets?

From Trump’s Bitcoin Reserve to crackdowns on illicit exchanges and massive security breaches, today’s news highlights the growing pains of the crypto industry.

  • The Strategic Bitcoin Reserve signals institutional legitimacy, but markets remain uncertain about U.S. government holdings.
  • Regulators are increasingly aggressive, as seen with Garantex’s shutdown and New York’s anti-rug pull bill.
  • Security remains a major issue, with North Korean hackers continuing to exploit crypto vulnerabilities.

With Bitcoin still up 30% YTD, investors are watching whether markets stabilize or face further volatility.

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