Big news broke out in the cryptocurrency market. On the evening of February 21, the cryptocurrency trading platform Bybit was hacked. The scale of the attack was huge, and more than 400,000 ETH and stETH with a total asset value of more than 1.5 billion US dollars were transferred to an unknown address.
Conor Grogan, director of the cryptocurrency market trading platform Coinbase, said that this hacking incident was the largest theft in history, surpassing the theft of the Central Bank of Iraq (about 1 billion US dollars).
Founded in 2018, Bybit is one of the world’s largest cryptocurrency exchanges, with an average daily trading volume of more than 36 billion US dollars. According to CoinMarketCap data, Bybit’s platform assets were about 16.2 billion US dollars before the hacking incident, which means that the stolen Ethereum is equivalent to about 9% of its total assets.
This sudden asset theft has dealt a heavy blow to the industry.
Affected by this, in the early morning of February 22, the cryptocurrency market fell collectively, and Bitcoin experienced several short-term sharp declines, falling below 95,000 US dollars per coin within 24 hours, and the lowest was 94,830.3 US dollars per coin. In the past 24 hours, more than 170,000 people worldwide have had their positions liquidated.
It is worth noting that this hacker attacked cryptocurrency exchanges, not the cryptocurrency itself. The attack destroyed Bybit’s cold wallet, an offline storage system designed for security. An industry insider believes that the stolen coins should not be recovered, and he has already taken the coins back and put them in his own wallet. Tom Robinson, chief scientist at blockchain analysis company Elliptic, said in an email: “We marked the thief’s address in the software to prevent these funds from being cashed out through any other exchange.”
Hackers steal nearly $1.5 billion in crypto from Bybit
On the evening of February 21, ZachXBT posted a message saying that it had detected a suspicious outflow of more than $1.46 billion from Bybit.
Research firm Arkham Intelligence also confirmed that about $1.4 billion had flowed out of the exchange, and posted on the X platform that “these funds have begun to be transferred to new addresses and sold.”
Since then, Bybit has officially released a detailed announcement of the incident. Some media reported that the announcement showed that at 20:30 on February 21, Bybit detected unauthorized activities in the Ethereum cold wallet during a routine transfer. The transfer was part of Bybit’s official plan to transfer ETH from the ETH multi-signature cold wallet to the hot wallet. Unfortunately, the transaction was manipulated by a complex attack that changed the smart contract logic and hid the signature interface, allowing the attacker to control the ETH cold wallet.
As a result, more than 400,000 ETH and stETH with a total asset value of more than $1.5 billion were transferred to unknown addresses.
Regarding this hacker attack, Bybit said that all other cold wallets under Bybit are safe and customer funds are not affected. Please be wary of other scams. Bybit has strong reserves and is backed 1:1. All customer assets are fully secured, which can be viewed on the Proof of Reserves (PoR) webpage. Bybit has over $20 billion in AUM and will use bridge loans if necessary to ensure the availability of user funds. The Bybit platform and all other services, including trading products, cards and P2P, are operating normally.
Bybit CEO Ben Zhou also acknowledged the incident in a post on the X platform on Friday. To address customer concerns, Zhou also conducted a live broadcast to emphasize the security of the exchange’s funds and revealed that the platform has applied for a bridge loan with partners and has raised about 80% of the funds to make up for the losses. At the same time, Bybit will attempt to recover the funds and take necessary legal action against the hacker.
Zhou assured users in the live broadcast: “Your funds are safe and our withdrawal channels are still open. The exchange has processed more than 70% of withdrawal requests after the hack.” He also said that the exchange has not purchased any ether to make up for the stolen assets.
The largest theft in history
Security agencies confirmed that the attacker was the hacker group Lazarus Group, which hacked into a South Korean exchange in 2017 and stole $200 million in Bitcoin.
According to data from blockchain analysis company Elliptic, this hacker attack has become the largest crypto theft in history. Rob Behnke, co-founder and executive chairman of blockchain security company Halborn, even said that this may be “the largest event ever, not just in the cryptocurrency field.”
Coinbase director Conor Grogan also said that Bybit’s hacking incident has become the largest theft in history, surpassing the theft of the Central Bank of Iraq (about $1 billion).
Industry experts warned that this incident exposed the fatal vulnerability of cold storage in centralized exchanges-even if stored offline, smart contract code vulnerabilities may still be exploited. Investors are accelerating their shift to hardware wallets and decentralized exchanges, and DEX’s 24-hour trading volume has surged by 40%.
In addition, Hilary Allen, a professor at the American University Washington College of Law who studies the cryptocurrency market, said: “Before encountering such attacks, a deregulated market sounds good. In the short term, we see a lot of people cheering for the removal of a lot of regulations. But be careful what you wish for.
Affected by this, Ethereum plummeted 6.7% in 24 hours, Bitcoin fell 3%, and 170,000 people were liquidated for more than $570 million. Bybit token BYB plummeted 12.3% in 1 hour, and the futures market liquidated more than $200 million in long positions.
As of posting, the crypto market’s decline narrowed, with Bitcoin falling 1.88% in 24 hours and Ethereum falling 2.35% in 24 hours.
