Following Bybit's Billion Dollar Hack

On February 21, 2025, Bybit suffered a massive security breach, losing approximately $1.4 billion to $1.5 billion in Ethereum (ETH) from one of its cold wallets. This recent hack of Bybit, one of the largest crypto exchanges, has sent shockwaves through the digital asset industry.

This incident is considered one of the largest crypto hacks in history.

Hackers exploited vulnerabilities in Bybit's user interface and smart contract logic, using advanced phishing techniques and social engineering to bypass security protocols.

The attack involved manipulating transaction approvals, tricking Bybit employees into signing off on fraudulent transactions.

Blockchain investigators have linked the attack to North Korea's Lazarus Group, known for previous high-profile crypto heists.

Despite the scale of the attack, the exchange has moved swiftly to restore operational stability. Deposits and withdrawals resumed normal functioning by February 23, signaling robust user confidence.

Bybit has nearly restored its 1:1 asset backing by sourcing over 446,870 ETH (worth about $1.23 billion) through purchases, and large deposits etc.

The hack triggered a liquidity crisis, with over $6.1 billion flowing out of Bybit within three days, reducing its assets from nearly $17 billion to under $10.8 billion.

A coordinated effort involving major blockchain entities helped freeze $42.89 million in stolen assets and blacklist attacker wallets.

CEO of Binance, Changpeng Zhao (CZ) has raised alarms about the hack, emphasizing the need for enhanced security measures such as multi-party computation (MPC) wallets and off-chain settlement.

There has been talk about potential Ethereum network changes or rollbacks following such significant hacks, though no concrete actions have been announced.

The rapid response by Bybit and the broader crypto community's efforts have mitigated the immediate impact of the hack. However, the incident highlights ongoing security challenges in the crypto space and the need for robust measures to prevent future breaches.

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