PA Daily | Eight ministries release new regulations for virtual currency; Bithumb mistakenly sends 620,000 Bitcoins

Today's top news highlights:

1. The People's Bank of China and eight other departments issued a notice on further preventing and handling risks related to virtual currencies.

2. The China Securities Regulatory Commission (CSRC) issued the "Regulatory Guidelines on the Issuance of Asset-Backed Securities Tokens Overseas by Domestic Assets".

3. Bithumb: 620,000 Bitcoins were mistakenly sent; 99.7% have been recovered.

4. Bithumb apologizes for the erroneous payment incident and announces a compensation plan.

5. Binance confirms completion of the $250 million Bitcoin conversion for the SAFU Fund, bringing its total holdings to 6,230 BTC.

6. Only 21,300 ETH remain on the Trend Research blockchain.

Macro & Regulatory

The People's Bank of China and eight other departments stated that virtual currencies do not have the same legal status as legal tender.

The People's Bank of China and eight other departments issued a notice on further preventing and handling risks related to virtual currencies (Yinfa [2026] No. 42). The notice clarifies the essential nature of virtual currencies, the tokenization of real-world assets, and related business activities, stating that virtual currencies do not have the same legal status as fiat currency. Bitcoin, Ethereum, Tether, and other virtual currencies are characterized by being issued by non-monetary authorities, using encryption technology and distributed ledgers or similar technologies, and existing in digital form. They lack legal tender status and should not and cannot be used as currency in the market.

Related Reading: Full Text | Multiple Ministries Issue Notice on Further Preventing and Handling Risks Related to Virtual Currencies

The China Securities Regulatory Commission (CSRC) has issued regulatory guidelines on the issuance of asset-backed securities tokens overseas by domestic assets.

The China Securities Regulatory Commission (CSRC) has issued regulatory guidelines on the issuance of asset-backed securities tokens overseas by domestic assets. The guidelines define the issuance of asset-backed securities tokens overseas by domestic assets as activities that use the cash flow generated by domestic assets or related asset rights as repayment support, and utilize cryptographic technology and distributed ledger or similar technologies to issue tokenized equity certificates overseas. Domestic assets issuing asset-backed securities tokens overseas must strictly comply with laws, administrative regulations, and relevant policies concerning cross-border investment, foreign exchange management, and network and data security, and fulfill the approval, filing, or security review procedures required by the aforementioned regulatory authorities. Such issuances must not harm national interests or the public interest.

The document states that the China Securities Regulatory Commission (CSRC) strictly regulates the issuance of asset-backed securities tokens overseas by domestic assets in accordance with laws and regulations. Before commencing any related business, the domestic entity that actually controls the underlying assets must file with the CSRC, submitting a filing report, a complete set of overseas issuance documents, and other relevant materials as required, fully explaining the information of the domestic filing entity, the underlying assets, and the token issuance plan. The domestic filing entity, its controlling shareholders, actual controllers, directors, supervisors, senior management personnel, and relevant intermediaries must ensure that the filing materials they provide are true, accurate, and complete, and must not contain any false records, misleading statements, or material omissions.

The White House will hold another meeting next Tuesday to discuss stablecoin yields.

Crypto journalist Eleanor Terrett reported that, according to insiders, the next round of consultations between the White House and cryptocurrency institutions regarding stablecoin yields is scheduled for next Tuesday. While bank staff will still participate, representatives from various industry associations will also be present in addition to bank representatives. A more detailed list of attendees will be released later.

Sberbank, Russia's largest state-owned bank, launches cryptocurrency mortgage lending service.

Sberbank, Russia's largest state-owned commercial bank, is preparing to offer loans secured by cryptocurrencies and has stated its readiness to work with the Central Bank of Russia to develop a regulatory framework.

In January of this year, the bank issued Russia's first Bitcoin-backed loan to Intelion Data, a major mining company, as a pilot project for this model. In addition, the bank also offers clients structured bonds and digital assets linked to Bitcoin and Ethereum.

All three major U.S. stock indexes closed higher, with the Strategy Index surging over 26%.

According to CLS News Agency, the three major U.S. stock indexes all closed higher. The Dow Jones Industrial Average rose 2.47%, surpassing 50,000 points to set a new closing high, with a cumulative increase of 2.5% this week. The Nasdaq Composite Index rose 2.18%, with a cumulative decrease of 1.84% this week. The S&P 500 Index rose 1.97%, with a cumulative decrease of 0.1% this week.

US cryptocurrency stocks generally rose, with COIN (Coinbase) up 13%; MSTR (Strategy) up 26.11%; CRCL (Circle) up 13.56%; and BMNR (Bitmine) up 17.64%.

21Shares is applying to issue an Ondo ETF.

Eric Balchunas, a senior ETF analyst at Bloomberg, said on the X platform that 21Shares is applying to issue an Ondo ETF. "I've never heard of this ETF before, it sounds like the name of a planet from Star Wars."

Project Updates

Strategy plans to launch a Bitcoin security initiative to address the quantum threat.

During the earnings call, Strategy Executive Chairman Michael Saylor announced plans to launch a Bitcoin security initiative aimed at addressing quantum computing and other future security threats. This initiative will collaborate with the Global Cybersecurity, Cryptosecurity, and Bitcoin Security Council to coordinate related research and risk response.

Saylor stated that the current consensus is that the quantum threat is at least 10 years away from becoming apparent, and many global teams are already developing quantum-resistant protocols. He emphasized that Bitcoin is upgradeable, and if a quantum upgrade is needed in the future, its network will become more robust. However, he cautioned that addressing such risks requires timing; acting too early may result in immature technology, while acting too late could lead to unnecessary risks.

The Aave protocol liquidated over $450 million in collateral in the past week.

Aave founder Stani posted on the X platform that the Aave protocol and the entire DeFi space have experienced an extremely resilient week. In the past seven days, the protocol has liquidated over $450 million worth of collateral across multiple networks. For a lending protocol with a scale exceeding $50 billion, this represents approximately 0.9% of total deposits at the time. Simultaneously, Aave continues to accumulate additional revenue. Bad debts can occur during the lending process, and Aave has built-in mechanisms to handle such situations. Furthermore, a new liquidation engine will be released for Aave V4, bringing greater flexibility and performance to the protocol.

Coinbase will suspend several perpetual contracts, including EDGE-PERP and PROMPT-PERP.

According to an official announcement from Coinbase Markets, Coinbase Advanced and Coinbase International Exchange will suspend trading of the following perpetual contracts starting at approximately 21:00 Beijing time on February 20th: EDGE-PERP, PROMPT-PERP, 1000SATS-PERP, FLOW-PERP, SCR-PERP, IO-PERP, AR-PERP, HMSTR-PERP, DEGEN-PERP, L3-PERP, GIGA-PERP, TNSR-PERP, BLAST-PERP, DYM-PERP, ZETA-PERP, CGLD-PERP, LAYER-PERP, MEW-PERP, CRO-PERP, MANTLE-PERP, RSR-PERP, HNT-PERP, SYRUP-PERP, PROVE-PERP, and GRASS-PERP.

The platform stated that this suspension is part of its ongoing efforts to maintain a high-quality derivatives market, aiming to concentrate resources on supporting products with good liquidity and meeting market quality standards. This ensures price integrity and provides users with deeper liquidity and a better trading experience. By streamlining its perpetual contract product line, the platform can focus more on supporting the markets most frequently used by its clients and launch new high-quality derivatives more efficiently. In the coming months, the platform will accelerate the launch of new perpetual contracts by simplifying internal processes and utilizing advanced evaluation frameworks.

Coinbase adds Superform (UP) to its listing roadmap

According to an official announcement, Coinbase has added Superform (UP) to its asset listing roadmap. The listing of this asset still depends on whether market-making support and technical infrastructure are in place. The specific listing time will be announced separately once the relevant conditions are met.

Bithumb: 620,000 Bitcoins were mistakenly sent; 99.7% have been recovered.

According to a Bithumb announcement, the exchange made an operational error during the distribution of event rewards, resulting in the wrong distribution of a total of 620,000 bitcoins to 695 users (instead of the 2,000 bitcoins previously speculated by the market).

Bithumb froze the transactions and withdrawals of 695 customers within 35 minutes of the overpayment of rewards. 618,212 BTC (99.7% of the total) have been recovered, and 93% of the assets corresponding to the 1,788 Bitcoins already sold have been recovered. Bithumb stated that it will use its own assets to make up for the unrecovered Bitcoins and will redesign its asset distribution process and strengthen its internal control system to prevent similar incidents from happening again.

Previously, it was reported that a Bithumb employee's airdrop error resulted in the wrong distribution of 2,000 BTC, causing the price of BTC on the platform to plummet by 10% compared to other markets.

NBA star Giannis Antetokounmpo joins prediction market Kalshi as a shareholder.

NBA star Giannis Antetokounmpo ("The Greek Freak") has announced that he will join the prediction market Kalshi as a shareholder. Giannis Antetokounmpo currently plays for the Milwaukee Bucks in the NBA.

Bithumb apologizes for the erroneous payment and announces a compensation plan.

Bithumb issued an apology regarding the erroneous payment incident. Bithumb stated that it failed to uphold the primary principles of virtual asset trading platforms: "stability and integrity." Following the incident, it has reported it to all relevant departments and is fully cooperating with the investigation by the Financial Supervisory Commission.

1. Bithumb will improve its systems and processes to prevent human error from escalating into accidents.

To prevent such incidents from happening again, Bithumb has upgraded its internal control system and implemented innovative measures.

(1) Strengthen the asset verification system: We will strengthen the verification of customer and company assets during the payment process based on events or company policies.

(2) Improve the multi-payment system: Improve some previously missing processes to ensure that customer asset transfers and reward payments require at least two payment steps to prevent similar incidents from happening again.

(3) Strengthen the AI ​​system for detecting and automatically intercepting abnormal transactions: Once an abnormal transaction or data is detected, the system will immediately activate the "security protection" system, which will run continuously 24 hours a day to prevent the incident from happening at the source.

(4) External expert system audit: A global security expert organization will be commissioned to conduct a comprehensive system evaluation of Bithumb, and the results will be published in a public and transparent manner.

2. The company will assume full responsibility for preventing customer losses.

Since the second announcement, there have been no direct customer losses due to the overpayment incident. However, due to the price crash, some unfavorable transactions (panic selling) were confirmed during the event. Bithumb believes these transactions fall within its responsibility to protect customers and plans to provide full compensation, including additional compensation, to affected customers.

As of 16:00 on February 7, 2026, the estimated loss to customers is approximately 1 billion Korean won. The company plans to compensate for any additional losses.

(1) Special Compensation for Panic Selling: Users who sell at low prices during the event period (19:30-19:45 on February 6, 2026) will receive a full selling price plus an additional 10% compensation. (Automatic payment will be made within one week after data verification.)

(2) Compensation for all Bithumb users who accessed the service during the incident: All users who accessed the Bithumb service during the incident will receive 20,000 Korean won in compensation within one week.

(3) No transaction fees for all users: Transaction fees for all trading instruments will be reduced to 0% for seven days. (To be announced later)

(4) Establish a 100 billion won “Customer Protection Fund”: A special fund will be established to immediately save customer assets in the event of an incident.

Analysis & Opinions

Analysis: The number of unemployed in the United States has reached a 17-year high, sending a positive signal to Bitcoin bulls.

The number of planned layoffs in the U.S. surged to 108,435 in January, the highest level since January 2009, representing a 205% increase month-over-month and a 118% increase year-over-year. This data contrasts sharply with the still resilient official non-farm payroll report and is seen as an early sign of a rapidly cooling labor market. Human resources firm Challenger, Gray & Christmas points out that many of the layoff plans are scheduled for late 2025, reflecting employers' pessimistic outlook for 2026. Simultaneously, Truflation, a blockchain-based real-time inflation indicator, shows that the U.S. inflation rate has plummeted below 1%, far below official CPI data. These unofficial indicators collectively suggest that economic growth is slowing, potentially prompting the Federal Reserve to cut interest rates to support the economy.

Analysts are divided on their expectations for the Federal Reserve's future policy. JPMorgan Chase predicts interest rates will remain unchanged until 2027, while other banks forecast at least two rate cuts this year. Some economists expect Kevin Warsh, Trump's nominee for Fed chair, to cut rates by 100 basis points before the November midterm elections. The market believes that a potential shift in monetary policy could provide support for risk assets such as Bitcoin. Bitcoin's price has since fallen nearly 50% from its all-time high of over $126,000 last October.

CryptoQuant CEO: If BTC does not see a substantial rebound in the next month, the risk of a chain reaction of institutional selling will increase significantly.

In response to DeFi Development executive Parker White's view that "the culprit behind today's IBIT crash may be one or more non-cryptocurrency hedge funds based in Hong Kong," CryptoQuant CEO Ki Young Ju stated: "Unless this is a forced sell-off by institutions, it's hard to understand why they would release such a massive amount of Bitcoin all at once. The most worrying thing in the Bitcoin market is precisely this chain reaction of forced sell-offs: as funds are liquidated and prices fall, miners will go bankrupt, and even small investors who held on until the end will have to cut their losses and leave. Frankly, if Bitcoin fails to see a meaningful rebound at its current price level within the next month, the risk of a structural, chain reaction of institutional sell-offs will increase significantly. And once institutions choose to surrender at the bottom, they are unlikely to return—rebuilding trust takes a long time."

According to previous reports, a partner at Pantera Capital speculated that the recent sell-off in the crypto market was triggered by large Asian entities .

Peter Brandt: Based on past bear market cycles, Bitcoin's bottom may be around $42,000.

Peter Brandt, the renowned trader and chart analyst who successfully predicted the 2018 Bitcoin crash, wrote today that if Bitcoin falls to the "banana peel" technical zone as it has in past bear market cycles, then the downside for bulls will be limited, with the bottom likely around $42,000. The current price is very close to that target area.

Previously, on February 1st, Peter Brandt stated that Bitcoin might fall to $58,000, and the bear market was still ongoing .

Bitwise: Market anxiety has peaked, indicating the crypto market is nearing its bottom.

Bitwise suggests that the current high level of market anxiety may indicate that the market is nearing a bottom. The company points out that this anxiety is similar to the sentiment seen at the bottoms of the cycles in 2018 and 2022, both of which presented "excellent buying opportunities." Bitwise's Chief Investment Officer, Matt Hougan, notes that investors who bought at the 2018 lows achieved returns of approximately 2000%, while those who entered at the 2022 lows saw gains of around 300% over three years. He believes that the current disconnect between prices and actual industry progress mirrors these cyclical characteristics. Hougan emphasizes that the rise of stablecoins, asset tokenization, and trends such as "AI + Finance" indicate that the ecosystem is still maturing and the fundamentals have not changed.

Regarding market shifts, Bitwise believes that crypto bear markets typically end with emotional exhaustion rather than sudden euphoria. Potential upside catalysts include the passage of the Clarity Act, a shift in market risk sentiment, rising expectations of interest rate cuts, and technological breakthroughs at the intersection of AI and crypto. Without a sudden positive shock, the market may "gradually bottom out."

Bitwise Chief Investment Officer: Six Factors Led to the Plunge, This Decline Presents a Buying Opportunity

Bitwise Chief Investment Officer Matt Hougan wrote that the current market sentiment is exactly the same as the 84% and 77% of the declines in previous cycles, which ultimately proved to be "excellent buying opportunities".

Bitwise attributed the crash to six factors: long-term investors preemptively selling to avoid a four-year cycle; investors shifting their attention to artificial intelligence and precious metals; the October 10th leveraged liquidation event, which prompted traders to flock to the cryptocurrency market to express their dissatisfaction; concerns about Kevin Warsh's appointment as Federal Reserve Chairman; concerns about quantum computing; and the impact of macroeconomic risk aversion.

Regarding a potential market rebound, Bitwise acknowledges that cryptocurrency bear markets typically end with market weakness rather than a sudden surge. However, the asset management firm also points to specific factors that could catalyze a market recovery. These include the potential passage of the Clarity Act, a rebound in market risk appetite, rising expectations of interest rate cuts, and technological breakthroughs at the intersection of artificial intelligence and cryptocurrency. Without any sudden positive catalysts, Bitwise anticipates a "slow bottom" for the market and advises investors to adopt a patient strategy, focusing on long-term goals.

VanEck: Five factors combined led to the crypto market crash

Matthew Sigel, head of digital asset research at VanEck, believes that the drop in Bitcoin to $60,000 was due to a combination of five factors. These include large-scale deleveraging, forced selling by miners, the waning hype surrounding artificial intelligence, the risks of quantum computing, and the psychological impact of Bitcoin's four-year cycle on market sentiment.

However, unlike previous crashes with clear causes (such as the FTX collapse and Terra's bankruptcy), this sell-off lacked a single trigger. This makes predicting the bottom more difficult, but it may also create a clearer picture for recovery.

An a16z partner published an article denying the death of non-financial use cases for cryptocurrency, stating that the current phase is one of infrastructure development.

Chris Dixon, a partner at a16z, published an article titled "The Long-Term Prospects of Cryptocurrency," responding to recent negative narratives such as "non-financial use cases for cryptocurrency are dead" and "the Read Write Own vision has failed." He argues that the current financial boom is merely building the necessary underlying networks and trust mechanisms for future non-financial applications such as media, gaming, and AI. We are currently in the infrastructure building phase.

Dixon argues that people misunderstand the stages of blockchain development. Finance is a "pioneer" of blockchain, not the whole picture. The core tenet of blockchain is "the ability to coordinate people and capital at the internet scale," and finance is the most natural and fundamental testing ground for proving this ability.

History has shown that infrastructure and distribution channels always precede applications. The internet had protocols and connectivity before social media. Similarly, cryptocurrencies need to get hundreds of millions of people on-chain through payments, stablecoins, and DeFi before meaningful adoption can be seen in media, gaming, AI, or other potentially more distant areas.

Arthur Hayes: Bitcoin crash may be due to traders using IBIT structured products for hedging.

BitMEX co-founder Arthur Hayes stated that the Bitcoin crash may have been caused by traders using IBIT structured products for hedging. He will compile a list of all bank-issued notes to better understand the triggers that could lead to rapid price fluctuations.

Investment and Financing

Relay Protocol, a token trading infrastructure provider, has completed a $17 million Series B funding round, led by USV and others.

According to official news, token trading infrastructure provider Relay Protocol has completed a $17 million Series B funding round, led by Archetype and USV. Furthermore, Relay Protocol is about to launch Relay Chain, an infrastructure built specifically for instant cross-chain settlement.

mechanism

Trend Research has only 21,300 ETH remaining on the blockchain.

According to on-chain analyst Ember, Trend Research currently has only 21,300 ETH ($43.94 million) remaining on its blockchain. 96% of its ETH has already been transferred to exchanges, far exceeding the amount needed to unleverage, suggesting a high probability of a complete liquidation.

Binance has confirmed the completion of a $250 million Bitcoin conversion for the SAFU Fund, bringing its total holdings to 6,230 BTC.

Binance confirmed on its X platform that it has completed the purchase of 3,600 Bitcoins, worth $250 million in stablecoins, for the SAFU Fund. The Binance SAFU Bitcoin address now holds 6,230 BTC. Binance will continue to increase its Bitcoin holdings for the SAFU Fund, aiming to complete the asset conversion within 30 days of the original announcement. Further updates will be shared with the community in a timely manner.

Important data

Garrett Jin, a whale, deposited 5,000 BTC, worth $351 million, into Binance in the past two hours.

According to Lookonchain monitoring, whale Garrett Jin deposited 5,000 BTC (worth approximately $351 million) into Binance in the past two hours.

Crypto.com founders acquired the AI.com domain for $70 million, making it the most expensive domain name ever sold.

Crypto.com founder Kris Marszalek purchased the AI.com domain for $70 million, breaking the global domain name transaction record and becoming the most expensive domain name ever.

Crypto.com founder Kris Marszalek purchased the AI.com domain for $70 million, breaking the global domain name transaction record and becoming the most expensive domain name ever.