How the Bybit hack shook the crypto world: $1.5B gone overnight

Crypto users are rushing to secure their digital wallets after what is being described as the biggest crypto heist ever, with $1.5 billion stolen from the Bybit exchange. This incident sparked fear across the crypto-verse, marking the biggest theft since $611 million was taken from Poly Network in 2021. Smaller altcoins such as XRP, Solana, and Dogecoin were reportedly hit the hardest, while larger cryptocurrencies like Bitcoin and Ether suffered less due to their higher liquidity and comparatively lower risk profiles.

Ben Zhou, CEO of Bybit, attempted to reassure customers in a livestream, stating, “Your money is safe and our withdrawals are still open.” He noted that the company had taken out a bridge loan to cover any losses and was seeking law enforcement assistance to recover the stolen funds.

Industry reactions are mixed; Mark Cuban, known from Shark Tank, told TheStreet Crypto that the Bybit hack has “no implications” for the broader crypto market. Conversely, some industry experts expressed concern that the magnitude of the hack might “trigger a crisis” and could “damage trust” in the security of digital assets and blockchain technology as a whole.

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Last week, Bybit announced that cybercriminals had executed the theft from a “cold wallet,” typically a more secure digital wallet stored offline, primarily used for Ether tokens. The blockchain research firm Elliptic indicated that this heist is more than double the value of the last-largest theft and “is almost certainly the single largest known theft of any kind in all time.” The broader crypto industry has seen hacking hauls exceeding $2 billion in 2024 alone, marking the fourth consecutive year where losses have surpassed $1 billion.

The report encapsulates a series of significant thefts in the cryptocurrency sector since Bitcoin’s inception in 2008. Notable previous hacks include:

• Poly Network: $610 million stolen in August 2021, with most funds returned later by the hackers.
• Ronin Network: Approximately $540 million taken in March 2022 from a blockchain project associated with the game Axie Infinity.
• Coincheck: $530 million stolen in January 2018 from a Tokyo-based exchange, allegedly linked to North Korean hackers.
• Mt. Gox: Nearly $500 million in Bitcoin stolen from the then-largest exchange between 2011 and 2014, leading to bankruptcy for the platform.
• Wormhole: $320 million depleted last month, with the funds later replaced by Jump Trading, the crypto arm of Chicago-based Jump Trading, which had acquired the developer behind Wormhole.

TRM Labs has determined with high confidence that the Bybit hack was carried out by North Korean hackers. Their assessment is based on observable overlaps between the hacker’s addresses and those linked to prior thefts conducted by North Korean actors. The firm managed to tag and track the movement of the $1.5 billion in Ethereum tokens in real time.

Following the hack, Bybit explained that a routine transfer of Ethereum digital wallets was “manipulated” by an attacker who redirected the crypto to an unidentified address. The company reassured customers that their holdings stored with the exchange were safe and noted a spike in withdrawal requests, indicating potential delays in processing.

CEO Ben Zhou further affirmed on social media that Bybit would remain solvent even if the hacked crypto was not recovered, stating, “We can cover the loss.”

Featured image credit: Pierre Borthiry – Peiobty/Unsplash