Crypto News Round-Up — February 2026

We review today’s top crypto headlines, from regulatory crackdowns and exchange mishaps to major price swings. Highlights include China expanding its cryptocurrency bans, a $40M DeFi hack, a bizarre exchange error that sent $44B in BTC to users, and bitcoin’s sharp price decline this week.

• China broadens crypto crackdown
• Step Finance hit by $40M hack
• Bithumb glitch accidentally sends $44B in Bitcoin
• Bitcoin plunges to 16-month low
• Coinbase confirms insider breach

China Broadens Crypto Crackdown

China’s central bank has issued a new circular expanding its 2021 ban on cryptocurrencies. The People’s Bank of China now prohibits activities like tokenizing real-world assets, even offshore tokenization of domestic assets without approval, as well as any crypto advertising or providing network capacity for mining (www.tomshardware.com). These measures build on earlier crypto restrictions and further tighten control of digital assets within and beyond China’s borders. PBoC officials say the rules are meant to prevent financial risk and protect the economy (Tom’s Hardware).

Why it matters:

• Bans innovation: The expanded rules bar new crypto projects and marketing in a major market, shrinking the global crypto ecosystem.
• Global impact: Even overseas token projects involving Chinese assets now need permits, warning international firms to tread carefully.
• Regulatory signal: China’s move underscores continuing regulatory pressure on crypto, which could dampen investor confidence worldwide.

Step Finance Suffers ~$40M DeFi Hack

Decentralized finance platform Step Finance revealed that hackers stole roughly $40 million from its treasury after compromising devices belonging to the company’s leadership (www.tomshardware.com). Security firm CertiK reported that at least 261,854 SOL (about $29M) was illicitly withdrawn, and Step later said built-in protocol protections enabled them to recover around $3.7M of those tokens, plus $1M in other assets. The breach, which occurred late January, affected only the platform’s treasury; according to Step Finance, no user funds were at risk (Tom’s Hardware).

Why it matters:

• Security risk: The attack shows that even complex DeFi platforms can be undone by lapses in basic security – in this case the compromise of executives’ devices.
• Defense mechanisms: Built-in smart contract safeguards helped limit the damage, highlighting how recovery protocols are becoming standard in DeFi.
• DeFi vulnerability: The incident is a reminder that decentralized finance projects remain prime targets for sophisticated hackers.

Bithumb Glitch Accidentally Sends $44B in Bitcoin

South Korean exchange Bithumb made headlines after a promotional campaign mistakenly distributed 620,000 BTC (around $44 billion) to users (www.reuters.com). The glitch stemmed from a typo: intended cash vouchers of 2,000 KRW ($1.40) became rewards of 2,000 BTC per winner. Bithumb clarified the incident was not a hack or security breach (www.reuters.com), and said the error has been corrected.

Regulators reacted sharply. An emergency meeting led South Korea’s crypto watchdog to announce inspections of Bithumb and other exchanges to check for any irregularities (www.reuters.com). The authorities warned that the mistake “exposed the vulnerabilities and risks” of virtual asset platforms and vowed tighter oversight (Reuters).

Why it matters:

• Human error: A simple mistake caused massive fallout, underscoring that operational risks at exchanges can be as serious as hacks.
• Regulation ramp-up: The incident quickly drew government scrutiny, suggesting tougher regulatory checks are coming to prevent repeat errors.
• Market shock: Bitcoin briefly plunged on Bithumb after the error leaked, illustrating how fragile market confidence can be.

Bitcoin Plunges to 16-Month Low

Bitcoin prices fell sharply this week amid a broad sell-off. Reports indicate that by Feb. 5, 2026, BTC had dropped to around $66,000, marking an over 11% slide from recent highs and a low not seen since mid-2024. This decline wiped out a significant portion of last year’s gains; bitcoin peaked near $126,210 in late 2024 and has now fallen well below levels from early 2025 (AP News). The rapid sell-off also triggered roughly $1 billion in derivative liquidations, as leveraged positions were blown out (Axios).

Why it matters:

• Volatility: The steep one-day drop is a reminder that crypto prices can swing wildly, especially when macroeconomic uncertainties rise.
• Risk of leverage: Massive liquidations show that margin trading in crypto carries heavy risk, as sharp moves can quickly wipe out positions.
• Adoption headwinds: A sustained slump may slow enthusiasm from institutional and retail investors who had chased recent all-time highs.

Coinbase Confirms Insider Breach

Crypto exchange Coinbase confirmed this week that a recent security incident was due to an “insider” issue rather than an external hack. The company said an employee improperly accessed some customer data, though no funds were stolen. Coinbase notified regulators of the incident and is cooperating with the investigation (TechRadar).

Why it matters:

• Insider risk: This underscores that threats to exchanges aren’t only external hackers – employees and contractors can also pose security risks.
• Regulatory focus: Coinbase’s disclosure to authorities will likely draw more scrutiny on industry practices and internal controls.
• Trust factor: News of any breach can shake user confidence, emphasizing that even top exchanges must maintain impeccable security.
• Volatility: Crypto markets remain extremely volatile and unpredictable.
• Do Your Own Research: Always confirm information from multiple sources before making any investment decisions.
• Not Advice: This summary is informational only and is not financial advice.

Bottom Line

This week’s headlines highlight the fast-moving and unpredictable nature of the crypto space. From government crackdowns to multi-million-dollar hacks and sudden market swings, events can change the landscape overnight. Investors should remain vigilant, educate themselves, and prepare for sharp ups and downs. Remember that crypto carries high risk, and no single news event should be the sole basis for financial decisions.