Key Takeaways
- Dubai-based ByBit was hit recently by a massive hack, which saw $1.5 billion stolen.
- This Bybit hack is now the largest crypto heist in history, trumping the $620 million Ronin exploit.
- On-chain sleuth Zach XBT identified the North Korean Lazarus group as responsible for the hack.
- The crypto community has reacted so far, with support for Bybit as it tracks down the funds.
The crypto industry has once again been hit by a massive setback.
Dubai-based ByBit, one of the largest crypto exchanges in the world has just confirmed that hackers successfully stole $1.5 billion worth of digital assets from its cold wallets.
Such a large amount of crypto being stolen now qualifies as possibly the largest crypto theft in history.
After investigation, a notorious hacking group has been identified as responsible for the breach, as the crypto community buzz cools off.
Here’s everything to know about the Bybit hack and what comes next.
What Happened?
This week, Ben Zhou, the founder of ByBit took to X to assure users that their funds were safe, and that any affected persons would be refunded in full.
The exchange reported that a group of hackers exploited some vulnerabilities in its systems and successfully transferred massive amounts of crypto to an unidentified address.
This tranche of stolen crypto comprised mostly of Ethereum, causing a price dump of nearly 4% on the cryptocurrency to fresh new lows of $2,641.41 per coin.
ByBit holds around $20 billion in assets, and is one of the largest exchanges in the world with over 60 million users.
Despite the scale of the Bybit hack, Zhou stated that the exchange remains solvent, and has enough funds to cover the losses.
The Largest Crypto Heist Yet
Interestingly, the record for the largest crypto heist was formerly held by the Ronin Network, which was hacked in 2022 for $620 million in Ethereum and USD Coin (USDC).
The incident further goes to show that despite how much time has passed, the crypto industry continues to suffer from millions of dollars being lost to thefts.
Crypto thefts have been a recurring issue, even further back than the Ronin hack.
In 2014 for example, Mt Gox, one of the largest Bitcoin exchanges at the time, lost around $350 million to hackers. The same happened again five years later in 2019, when Binance was hit with a $41 million Bitcoin heist.
Despite the strides in security, these breaches and hacks continue to affect the crypto space.
Who Was Behind the Hack?
The interesting part of this entire ordeal is who exactly was behind this Bybit hack.
According to reports from Arkham, blockchain investigator ZachXBT successfully identified the perpetrators of this hack:
And it turned out to be none other than the North Korean Lazarus group.
This notorious group was also responsible for the previous largest crytpo theft which saw $620 million stolen from the Ronin Network.
The Lazarus group has been linked to several other high-profile cyberattacks against financial institutions.
The funds are also allegedly funneled right into the North Korean weapons development programme shortly after being stolen.
Blockaid, an on-chain security firm confirmed that the ByBit hack is now officially the largest crypto exchange hack in history.
Crypto Community Reacts
The broader crypto community took to X to respond to the Bybit hack with a mix of support and security recommendations.
For example, Tron Founder Justin Sun voiced support for ByBit, stating that his team would assist in the tracking of the stolen funds.
In the same vein, other centralized exchanges like OKX and KuCoin deployed security teams to assist ByBit in the ongoing investigation.
Meanwhile, there are ongoing concerns about the aftermath of the Bybit hack, with some users expressing fears that it could trigger a panic wave.
Something similar to this happened with FTX in 2022, where the exchange was hit by a hack that revealed the massive scale of ongoing fraud, as related to its founder, Sam Bankman-Fried.
However, Coinbase executive Conor Grogan dismissed these via a post. He noted that ByBit continues to process withdrawals smoothly, compared to FTX which crashed in a matter of hours.
Hacks Have Been on the Rise Lately
The current year is only two months in, and the crypto industry has already seen an upsurge in hacks.
Most of these occurred in February, with ZkLend being a prime example. The money-market protocol on Starknet was hacked on Valentine’s Day, with hackers making away with around $9.5 million.
Earlier in the month on 5 February, Solana DEX Jupiter was hit with a social media exploit, where its X account was used to promote a memecoin called “MEOW”.
Calls for Better Security Measures
The attack also saw several security experts urge users to adopt stronger protection for their assets.
KuCoin emphasized the importance of two-factor authentication and using strong passwords.
Overall, the latest attack shows a growing trend of hacks targeting centralized exchanges.
Some investors continue to argue about the stronger security protocols on decentralized exchanges. However, these platforms too, like Aave, SushiSwap and KyberSwap have also fallen victim to similar exploits.
ByBit has reported the hack to authorities, and is working to recover the stolen assets.
The exchange will likely implement even stronger security protocols to prevent similar attacks in the future.
