Crypto News Round-Up — February 2026

The cryptocurrency world saw a flurry of activity in the past 24 hours, with major hacks, regulatory crackdowns and market swings making headlines. We highlight the key developments and their implications for investors and the industry.

• Step Finance loses ~$40M in hack
• China expands crypto ban to real-asset tokens
• Bithumb typo mistake sends $44B in Bitcoin
• Bitcoin falls below $67K amid ETF outflows
• U.S. banks and crypto clash over stablecoin rules
• ‘NYC Token’ launch crashes after hype

Step Finance loses ~$40M in hack

Decentralized finance platform Step Finance announced that hackers stole about $40 million from its treasury by compromising devices belonging to its executives. The attackers accessed the team’s devices on Jan. 31 and drained the treasury, initially taking over 261,000 SOL (around $29M) according to blockchain security monitors. Step Finance later confirmed the loss was closer to $40M, although it managed to recover roughly $4.7M of assets shortly thereafter. The company has halted some operations and warned users to pause trading its native STEP token while an investigation is underway (Tom's Hardware).

• The breach underscores the human and operational vulnerabilities in DeFi – not all attacks rely on broken code, but often on phishing or device compromise.
• A $40M loss makes this one of the largest single-platform hacks of 2026 so far, highlighting ongoing security challenges in crypto.
• Quick asset recovery shows the value of coordinated incident response, but also reminds users and platforms to follow strict security protocols.
• Investors should monitor how platforms secure executive access and private keys, and remember that even well-known projects can be targeted.

China expands crypto ban to real-asset tokens

China’s central bank and seven other agencies issued a new directive widening the country’s cryptocurrency ban. The circular explicitly extends the 2021 ban to include tokenization of real-world assets (domestic or offshore) and even bans internet providers from advertising or facilitating any crypto-related activities. Under the new rules, telecommunication and public security authorities are empowered to shut down any websites or apps related to virtual currencies or tokenized assets. Authorities warned that any virtual currency investor will have no legal protection under Chinese law (Tom's Hardware).

• This is one of the strictest crypto crackdowns yet: China is formally outlawing even tokenized versions of physical assets and tightening media restrictions.
• Broad enforcement by eight governmental bodies means that almost any crypto business involving Chinese assets faces serious legal risk.
• The measure is intended to prevent fraud and capital flight; investors in China should expect near-zero regulatory support.
• Global crypto firms may see limited expansion or partnerships in China as a result, reinforcing Chinese dominance of regulatory influence in digital assets.

Bithumb typo typo mistake sends $44B in Bitcoin

South Korean exchange Bithumb suffered a bizarre logistical error when it accidentally sent around 620,000 bitcoins (worth roughly $44 billion) to random users during a promotional event. According to reports, a staffer meant to award a small cash incentive of ₩620,000 (~$425) found that typing “$620,000B” triggered a massive distribution of Bitcoin instead. The exchange quickly halted withdrawals and reversed the transactions, reportedly recovering almost all of the coins minutes after the accident. Bithumb emphasized this was due to an internal input error, not a security breach (Tom's Hardware).

• The incident highlights how simple human or software errors — not only hacks — can pose huge risks in crypto operations.
• Regulators in South Korea have already begun reviewing exchange oversight procedures, signaling that authorities may impose stricter controls or audits on crypto platforms.
• That Bithumb recovered most of the funds shows that effective risk controls (like quick freezes) can limit damage, but the shock to users underscores fragility.
• Investors should remain aware that exchange accidents, even non-malicious ones, can have major market consequences.

Bitcoin falls below $67K amid ETF outflows

Bitcoin’s price continued to slide, falling about 11% on Thursday to roughly $66,300 — below levels seen before the U.S. election that ushered in a more crypto-friendly administration. This brought Bitcoin’s losses to nearly half off its October 2025 highs. Analysts attribute the sell-off to a mix of cautious investors pulling back from speculative assets and concerns about looming regulations on digital currencies. Notably, data shows investors withdrew about $5.7 billion from popular spot Bitcoin exchange-traded funds (ETFs) between November and January. Major crypto-related stocks also tumbled, with Coinbase down 9% and other firms seeing double-digit drops (AP News).

• The steep pullback underscores crypto’s volatility; even after record highs, prices can quickly reverse on the slightest negative news.
• Large ETF outflows suggest waning investor enthusiasm, as market participants sell bitcoin indirectly rather than holding the asset.
• Ongoing debate in Washington over stablecoin legislation may be spooking the market, as uncertainty around rules tends to dent crypto valuations.
• For traders and investors, these moves are a reminder to tread carefully – markets can turn on policy shifts or sentiment swings at any time.

U.S. banks and crypto clash over stablecoin rules

Looming legislation in Washington has pitted traditional banks against crypto companies over stablecoin regulation. Officials from the White House convened a meeting between big banks and crypto executives to discuss a proposed law governing “crypto savings accounts” or stablecoin rewards. The core dispute is whether crypto firms offering interest on stablecoin deposits should face bank-like capital requirements. Banks argue that crypto “savings accounts” are functionally similar to bank accounts and must be regulated with equal rigor. In response to lobbying pressure, crypto leaders like Coinbase CEO Brian Armstrong have withdrawn support for the bill, stalling its progress in Congress (Axios).

• The showdown marks a key inflection point: how this fight resolves will shape the future of crypto banking and investment products.
• If conventional banks win, crypto platforms may face stricter rules and higher compliance costs, curbing some growth.
• The clash illustrates that Washington’s stance on crypto is still fluid – strong lobbying could tip the scales in coming weeks.
• Crypto investors should watch regulatory developments closely; new laws on stablecoins or customer rewards could alter market dynamics significantly.

Ex-NYC Mayor’s ‘NYC Token’ launch crashes after hype

Former New York City Mayor Eric Adams launched a new cryptocurrency called the “NYC Token” with the promise of combating hate and bolstering city initiatives. The token’s price and market capitalization briefly skyrocketed – hitting an implied $600 million valuation after launch – before plunging nearly 75% in a single day. Investigations revealed that shortly after launch, an affiliated account withdrew $2.5 million worth of tokens, then returned about $1.5 million, triggering a “rug pull” panic. Adams’s team insists the former mayor did not benefit personally and said volatility was expected for a new token (AP News).

• This episode highlights the risks of celebrity or political figures promoting crypto: even well-intentioned projects can face skepticism and accusations of fraud.
• Pump-and-dump schemes remain common; many warn that inadequate safeguards let insiders dump tokens, leaving ordinary investors with steep losses.
• Regulators may pay closer attention to similar token launches in the future, especially those tied to public figures or political causes.
• Prospective buyers are reminded to conduct due diligence; if a new coin’s early insiders exit early, the remaining investors could suffer.

Reminder: Cryptocurrency markets are highly volatile. Price swings of 50% or more can happen quickly. Always exercise caution and do your own research (DYOR) before investing, and never trade more than you can afford to lose. Regulatory changes, security incidents and market sentiment can all dramatically affect crypto prices.

Bottom Line

These stories show that the crypto space remains fast-moving and unpredictable. Security breaches, regulatory shifts and unpredictable market moves can quickly change the landscape. Going forward, investors and observers should stay informed, remain cautious and recognize the risks inherent in digital assets. Each headline above underscores that crypto requires vigilance — both in watching policy developments and in managing portfolio risk.