Crypto exchange Bybit suffered a major security breach on Friday, resulting in the theft of nearly $1.5 billion worth of Ethereum.
The exchange reported that on February 21 at around 12:30 PM UTC, unauthorized access was detected in one of its Ether Cold Wallets during a routine transaction. The transfer was intended to move Ether from Bybit’s EtherMultisig Cold Wallet to its Hot Wallet.
However, the transaction was compromised by an advanced cyberattack that tampered with the smart contract’s logic and manipulated the signing interface, allowing the hacker to seize control of the Cold Wallet. As a consequence, more than 400,000 Ether and stEther, valued at over $1.5 billion, were transferred to an unknown wallet address.
Bybit expressed regret over the situation and assured users that the rest of its Cold Wallets were secure, emphasizing that customer funds remained unaffected. The exchange also confirmed that it is actively collaborating with blockchain security experts to track the stolen assets and address the breach. Investigators are particularly scrutinizing a potential flaw in the Safe.global platform’s user interface, which may have been exploited during the transfer process.
Authorities have been notified of the theft, and Bybit has taken measures to prevent the hackers from liquidating the stolen Ethereum on legitimate trading platforms. The exchange is working to limit the attackers’ ability to offload the funds, thereby restricting their avenues for disposal.
Despite the breach, Bybit assured users that all exchange operations remain fully functional. Withdrawals, which had been temporarily affected, have resumed without delays, allowing customers to access their funds freely. To maintain smooth transactions in the wake of the attack, Bybit secured additional Ether to support withdrawals.
Ben Zhou, Bybit’s CEO, addressed the situation in a post on X, emphasizing that the exchange is still financially stable. He assured users that all clients’ assets are backed on a 1:1 basis, even if the stolen funds are not recovered. Zhou reiterated that Bybit has the financial resources to cover the losses, ensuring continued trust and operational stability.
Zhou described the hack as potentially the worst security breach in financial history, spanning traditional banking, cryptocurrency, and other finance sectors. According to security experts, the attack was carried out by North Korean hackers from the infamous Lazarus Group. This event is far larger than 2024’s top five hacks, which come to almost $958 million.
Bybit is the world’s third-largest cryptocurrency exchange with a user base exceeding 40 million.
With the increasing sophistication that hackers are using to target crypto industry players, entities like Bit Digital Inc. (NASDAQ: BTBT) need to exercise extreme caution in setting up and upgrading their security systems so that they don’t find themselves in news headlines as yet another victim of cybercriminals.
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