Bitcoin network split, Bybit's lawsuit against North Korea, and Strategy's approach: key events of the week
The outgoing week was eventful: the Bitcoin network experienced an unexpected soft fork, Bybit initiated an unprecedented lawsuit against North Korea, and the U.S. Senate postponed a fateful vote on crypto market regulation. I break down the key events and their implications for the industry.
Bitcoin recovered to $65,000
The start of the week was marked by a continued correction: on August 4, the leading cryptocurrency dipped below $63,000. However, the following days showed a confident recovery. On-chain data recorded a record-long capitulation phase, which, combined with declining volatility, created a false sense of calm. Nevertheless, the turnaround was driven by institutional flows: spot Bitcoin ETFs attracted $853 million, and analysts noted accumulation of BTC, Ethereum, and XRP by large holders. Wallets with balances ranging from 10 to 10,000 BTC have acquired over 20,000 coins since July 29.
By the end of the week, Bitcoin rose 3.4% to $65,200, Ethereum gained 3.7%, and the Hyperliquid token increased by more than 6%. Market capitalization grew from $2.16 trillion to $2.22 trillion, while the fear and greed index remains in the "fear" zone at 31 points. This indicates continued caution among market participants despite the positive momentum.
BIP-110 soft fork: network split and risks for users
On August 8, the Bitcoin network split at block #961,632 due to the BIP-110 soft fork. Nodes supporting the proposal stopped accepting blocks without a signal of support. Competing blocks were mined by AntPool and the Roughnecks group via the Ocean pool. The separated branch lags significantly: in eight hours, it mined only two blocks compared to 48 on the main network. Support for the proposal was minimal—only 2.53% of blocks against the required 55%.
Particular concern is raised by developer Kevin Loake's warning about the risk of fund loss: both branches accept identical transactions, allowing attackers to intercept signed transfers. This is a serious signal for holders who may unknowingly interact with the alternative chain.
Strategy: losses and a new capital management strategy
Strategy continues to sell Bitcoin: from July 27 to August 2, it sold 1,638 BTC for $104.7 million. The proceeds are directed toward dividends and a share buyback of STRC. The reserve of the leading cryptocurrency has decreased to 842,138 BTC, and unrealized losses reached $10.9 billion. The sales are fixed under a framework program with a $5 billion limit, confirming a shift in approach: raised capital will no longer be automatically converted into Bitcoin. This is a landmark shift for corporate treasury that could influence sentiment among other institutional holders.
Hacker attacks and the industry's response
The Coldcard hack escalated into a large-scale audit of the entire Bitcoin infrastructure. Losses from the attacks are estimated at $100–130 million, and at least 15 attackers exploited the vulnerability. No mass sell-off followed: holders moved funds to new addresses rather than to exchanges. However, the incident exposed systemic issues: auditors confirm the presence of entropy sources but do not verify whether the production firmware actually uses them. The response was the volunteer initiative Bitcoin Red Team, which, using AI, identified thousands of problems in hundreds of projects, including a critical vulnerability in BTCPay that led to the draining of Lightning nodes.
Bybit vs. North Korea and U.S. regulation
Bybit filed a civil lawsuit against North Korea and the Lazarus Group over the theft of $1.5 billion in February 2025. The platform demands the return of the stolen funds and triple damages. Only 5.3% of the funds have been traced, highlighting the difficulty of combating North Korean hackers, who account for over 70% of global digital asset thefts.
The U.S. Senate postponed the vote on the CLARITY Act to September. Republicans lack the votes to overcome the 60-vote threshold, and there are internal disagreements over stablecoins. The key issue remains the block of ethical norms requiring the president to divest from crypto assets. Despite the challenges, the chances of the law passing are estimated at 21%, offering cautious optimism.
Miners in the red and the fight for energy
MARA Holdings and CleanSpark ended the quarter with losses of $611 million and $240 million, respectively, due to the decline in Bitcoin's price. The industry has intensified its fight for energy capacity, facing competition from AI developers. Texas has imposed a moratorium on connecting data centers, which could benefit miners with already approved contracts.
My comment: The network split due to BIP-110 is a reminder of the fragility of consensus in Bitcoin, even with minimal support. Investors should exercise caution and monitor updates to avoid losing funds. And Bybit's lawsuit against North Korea, while largely symbolic, sets an important precedent for the legal prosecution of state sponsors of cyberattacks.