🍰 The Bulletin #69: Bybit's $1.5B Breach, China's $138B Tech Fund, and Robinhood Faces Huge Fines
In this week's bulletin - North Korean hackers execute the largest crypto heist in history, China launches a fund to drive tech competition, and Robinhood receives a hefty slap on the wrist.🤯
Welcome to this week’s edition of the VWV Bulletin!⭐ Longer days and warmer weather are on the way, making it the perfect time to recharge and reset.⛅
‼️ For this semester, keep up with our content if you’re interested in:
Demystifying & breaking into VC
Finding opportunities in the start-up world
Keeping up with VC investment news at Brown & beyond (pro tip: this is essential to breaking in and finding opportunities)
Enjoy!💃
🚨Bybit’s $1.5B Breach: A Wake-Up Call for Crypto
On February 21st, North Korean hackers executed the largest crypto heist in history, stealing $1.5 billion from Bybit — the world’s second-largest crypto exchange.💻 The breach stemmed from Bybit’s reliance on an outdated open-source software product, despite prior warnings to upgrade. This oversight allowed hackers to take control of an account and dismantle key security infrastructure, exposing deep vulnerabilities in the platform’s asset protection.
The implications extend far beyond Bybit:
The attack triggered a 20% drop in Bitcoin, underscoring the fragility of crypto markets in the face of security lapses.⬇️
North Korea’s ongoing cyber strategy including leveraging financial crimes to fund its regime, raises serious concerns about systemic risks in global finance.🌎
The incident highlights the increasing sophistication of state-backed cyber threats, particularly as North Korea and China shift from brute-force hacking to more strategic, long-term infiltration of U.S. and global financial systems.💸
For investors, this breach is a stark reminder of the critical need for robust cybersecurity across fintech and crypto ventures.🤖 As digital asset adoption accelerates, security failures don’t just result in lost funds, they pose existential threats to platforms, investors, and the broader market.
🚀China’s $138 Billion Tech Fund
China is making a bold move to solidify its position as a global technology powerhouse with the launch of a massive $138B government-backed fund. This initiative, structured as a public-private partnership, aims to support emerging technologies such as quantum computing, artificial intelligence (AI), semiconductors, and renewable energy.🔋 This fund announcement comes during a time with increasing trade restrictions and global competition. Dubbed the "National Venture Capital Guidance Fund," this initiative will focus on hard tech, tolerating higher risks in pursuit of technological advancement. The fund is expected to attract nearly $138B in capital over 20 years from local governments and private sector partners, positioning China as a leader in cutting-edge research and commercialization.🏭
Quantum computing has been a major focus for China in recent years, and this new fund further illustrates their commitment. Advances in quantum computing could revolutionize industries such as materials science, cryptography, and logistics.👩🔬 The competition in this space is intensifying, as both the U.S. and Europe have also ramped up funding for quantum research. For comparison, the U.S. National Quantum Initiative allocated $1.2B over five years in 2018, followed by the National Quantum Initiative Reauthorization Act, which provided $2.7B over five years – a small amount relative to China’s ambitious $138B fund.🤯
Beyond quantum computing, the fund will also prioritize AI, semiconductors, and hydrogen energy storage. These sectors are crucial to China's long-term strategy as it faces increasing pressure from U.S. technology restrictions.❌. Zheng Shanjie, head of China’s state economic planner, stated, “Scenes once only seen in science fiction are now becoming reality. We are steadily moving toward the global frontiers of technology and innovation. This proves that the suppression and blockade attempt by certain forces only serve to accelerate our drive for independent innovation.”
China’s decision to invest at an unprecedented scale could reshape the global competitive landscape. With the U.S. recently doubling import tariffs on Chinese goods to 20%, tensions between the two economic superpowers continue to escalate. As the world watches how this investment unfolds, one thing is clear – China is playing the long game in the race for technological dominance.🔝
💰Robinhood Faces Another Multi-Million Dollar Fine
Robinhood, the online trading platform known for commission-free stock and crypto trading, is once again in the spotlight for regulatory missteps. The company has agreed to pay a $29.75M settlement to resolve multiple investigations by the Financial Industry Regulatory Authority (FINRA), adding to its growing list of compliance failures.
This latest settlement comes just months after Robinhood paid $45M in civil fines to the U.S. Securities and Exchange Commission (SEC) in January for failing to properly maintain records, report trades, and adhere to compliance rules. The company has frequently been at the center of regulatory scrutiny, with prior fines including a $65M SEC settlement in 2020 and a $70M FINRA penalty in 2021.😅
What went wrong?🚀
Failure to verify customer identities: Thousands of customer accounts were not properly vetted, raising concerns about fraudulent activity.🆔
Misleading social media communications: Influencers promoting Robinhood were not adequately supervised, potentially spreading misleading investment information.💸
Lack of transparency in trading policies: Customers received unclear disclosures about trading restrictions, particularly around volatile stock prices. Robinhood’s "collaring" practice prevents users from buying or selling stocks that fluctuate more than 5% between placing and executing a trade.🪀
As Robinhood works to rebuild trust, it remains to be seen whether it can shake off its troubled past and implement the necessary reforms to prevent further penalties.🤔
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That’s it for this week, feel free to email me abigail_gonzalez@brown.edu with any inquiries! 💌
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