Dubai-based cryptocurrency exchange platform Bybit is at the centre of a financial uproar. Hackers made off with nearly a worth of $1.5 billion Ethereum (ETH) from the platform’s cold wallet that triggered a mass panic among users of the platform. The aftermath was quick another more than $4 billion flowed out in withdrawals, for a total of a staggering $5.5 billion.
Within hours, blockchain analysts summoned the North Korean hacking syndicate, Lazarus Group, infamous for exploiting digital asset platforms. Wang Zhou addressed the crisis on social media and a live X Spaces session, assuring users that: “Bybit is solvent. Even if this hack loss is not recovered, all client assets are 1 to 1 backed, and we can cover the loss.”
A Move To Secure Withdrawals
Bybit’s internal teams swiftly reacted on this security breach. A major problem arose when Safe—a decentralised custody protocol—temporarily stop its smart wallet working to investigate potential vulnerabilities. This move left Bybit unable to access $3 billion in USDT reserves stored in its cold wallets. “We had to develop new software, manually verify signatures, and work through the night to process withdrawals,” Zhou revealed.
What next for security of Bybit and Crypto?
The Bybit hack highlights how cryptocurrency exchanges are an increasingly attractive targets of hackers. It raises pressing questions: What can be done by the platforms to bolster security? Is it time for decentralised wallets to reconsider their smart contract protocols? What can regulators do to stop such breaches from occurring again?
In the meantime, Bybit is still up and running, and its CEO has promised to undertake heightened security measures and investigate a different kind of safe solution. But the attack is a stark warning and not even the largest players in crypto are immune to hacking.
