On February 21, 2025, Bybit, a prominent cryptocurrency exchange, suffered the most significant cryptocurrency hack in history, losing approximately $1.4 billion in digital assets.
The hack, attributed to the North Korean Lazarus Group, involved the theft of liquid-staked Ether (STETH), Mantle Staked ETH (mETH), and various ERC-20 tokens from Bybit’s cold wallet.
The hack and its aftermath
The breach occurred when hackers exploited a sophisticated vulnerability, tricking Bybit’s cold wallet signers into approving a malicious transaction. This allowed the perpetrators to gain control of the wallet and transfer its assets to an untraceable address.
Bybit CEO Ben Zhou reassured users that the exchange remains solvent, with all client assets backed 1:1, even if the stolen funds are not recovered.
Security researcher ZachXBT linked the hack to the Lazarus Group, known for its involvement in previous high-profile cryptocurrency thefts, including the $620 million Ronin Bridge hack in 2022.
Following the incident, Bybit engaged cybersecurity firms to monitor the Ethereum blockchain and trace the stolen assets.
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Bybit offers bounty for stolen cryptocurrency
In response to the hack, Bybit launched a bounty program on February 25, 2025, offering rewards for assistance in recovering the stolen cryptocurrency. The program promises a 5 per cent reward for freezing illegally moved funds, with successful interceptions eligible for up to a 10 per cent bounty, potentially reaching $140 million.
Bybit CEO Ben Zhou declared a “war against Lazarus,” stating, “We have assigned a team to dedicate to maintain and update this website; we will not stop until Lazarus or bad actors in the industry is eliminated”.
Bybit also reported that it has fully recovered from the hack by covering the loss through loans, whale deposits, and Ethereum purchases. To stabilise its reserves, the exchange received substantial ETH contributions from various entities, including Bitget and MEXC.
Bybit plans to release an audited proof-of-reserve report using a Merkle tree system to ensure transparency and verify that all client assets are securely backed at a 1:1 ratio.
