The world of cryptocurrency faced another intense wave of uncertainty as Bybit, a popular crypto exchange, became the latest victim of a significant security breach, resulting in a historic influx of withdrawal requests. On February 21, 2025, the platform witnessed a staggering $1.46 billion hack that prompted users to initiate over 350,000 withdrawals, all processed in a mere 10 hours. This catapulted the exchange’s transaction volume to an unprecedented height, as stated by Bybit CEO Ben Zhou.
Zhou revealed that despite the chaos, 99.994% of these withdrawal requests were successfully completed, leaving about 2,100 still in limbo, undergoing risk assessments. The incident is cited as potentially one of the worst financial hacks in history, largely due to its complex nature involving the manipulation of Bybit's Ethereum multi-signature cold wallet. Hackers cunningly exploited a masked signing interface, misleading the team into approving a fraudulent transaction. This altered the wallet’s smart contract logic, sweeping all Ethereum holdings into an unidentified address.
Intriguingly, on-chain sleuthing by analysts such as ZachXBT and Arkham Intelligence has linked the audacious attack to the infamous North Korean cybercrime organization, the Lazarus Group. Backed by state sponsorship, the group’s involvement demonstrates the evolving sophistication of cyber threats within the crypto realm.
In a swift response to the breach, Bybit managed to secure emergency liquidity, seeking aid from partners like Bitget and Binance. Bitget’s CEO, Gracy, clarified that the assets lent were strictly company funds and never customer deposits, a crucial assurance for concerned clients. Meanwhile, Zhou reassured that the security of all cold wallets on the platform remains intact and insisted that client funds are well-protected.
The incident reignited heated debates surrounding Ethereum’s governance. A particularly contentious proposal came from BitMEX founder Arthur Hayes, suggesting a roll-back of the Ethereum blockchain as a method of recovering the misappropriated funds. This notion, however, stirred considerable controversy within the crypto community, raising questions about the principles of decentralization.
On the trail of the stolen cryptoassets, Elliptic’s analysis pinpointed laundering actions carried out via decentralized exchanges (DEXs) and mixers, such as Tornado Cash. These tools were used to muddy the trail, while North Korea-linked operatives attempted to convert Ethereum holdings into Bitcoin through platforms like eXch. Confirming suspicions, the FBI later attributed the hack to North Korea, underlining the persistent national security challenges posed by the rogue state’s cyber activities.
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