On Friday, Bybit, a major cryptocurrency exchange, announced that it had been hacked with losses estimated at approximately $1.5 billion. This incident marks the most prominent cryptocurrency theft to date.
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The nature of the hack
The hack involved a sophisticated attack on one of Bybit’s Ethereum cold wallets. Ben Zhou, CEO of Bybit, stated, “The signing message was to change the smart contract logic of our ETH cold wallet,” he wrote on X.
He explained that the hacker “took control of the specific ETH cold wallet we signed and transferred all ETH in the cold wallet to this unidentified address”.
The attackers exploited vulnerabilities by manipulating transaction interfaces and using advanced phishing techniques.
Blockchain analysis suggests North Korean hackers might be responsible for this breach, given its similarities with previous attacks like those by Lazarus Group. Funds were moved through multiple platforms and privacy protocols, complicating recovery efforts.
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Bybit processes withdrawals despite hacking
Following the hack, Bybit received over 350,000 withdrawal requests but assured users that all withdrawals were processed normally despite initial delays.
CEO Ben Zhou said, “Bybit is Solvent even if this hack loss is not recovered; all clients’ assets are 1 to 1 backed; we can cover the loss”. The company secured bridge loans covering about 80 per cent of stolen assets and collaborated with law enforcement agencies to recover assets.
Bybit maintains over $20 billion in assets under management (AUM), ensuring financial stability even if recovery fails. Despite these measures, concerns remain high due to recent trends showing increased crypto-related criminal activity globally in 2024, with losses exceeding $2.2 billion.