Bybit CEO Affirms Solvency After Record-Breaking $1.4 Billion Hack

Bybit, a leading cryptocurrency exchange, faced an unprecedented security breach, resulting in the theft of approximately $1.46 billion in Ethereum (ETH) and staked Ethereum (stETH). Despite this massive heist, Bybit CEO Ben Zhou swiftly reassured users of the exchange’s solvency and its ability to cover the losses.

• Bybit hacked for $1.4 billion in ETH and stETH.
• CEO Ben Zhou affirms solvency.
• Hack attributed to Lazarus Group.
• Bybit processes withdrawal requests post-hack.
• Ethereum prices affected; security measures planned.

The attack, labeled as the largest heist in history by Coinbase executive Conor Grogan, involved sophisticated tactics to manipulate Bybit’s ETH Multisig Cold Wallet. Hackers used malware to trick the multisignature system into approving fraudulent transactions, showcasing the evolving nature of cyber threats in the crypto space.

Despite the severity of the breach, Bybit demonstrated remarkable resilience. CEO Ben Zhou announced that the exchange processed over 350,000 withdrawal requests within 12 hours of the attack without major issues. Zhou emphasized, “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.” This swift response was crucial in maintaining user trust during such a crisis.

The stolen funds were converted to ETH and then to other cryptocurrencies like Bitcoin (BTC) and DAI, with over $700 million in ETH remaining in Level 1 wallets. Bybit’s proactive measures, including a recovery bounty offering up to 10% of recovered funds, highlight their commitment to addressing the breach and restoring user confidence.

The market felt the impact of the hack, with ETH prices dropping by 7%. Bybit’s subsequent repurchase of ETH to replenish reserves led to a brief rebound, illustrating the interconnected nature of crypto markets and the influence of major events on asset prices.

The incident also sparked discussions about potential Ethereum forks. Some in the community advocated for a rollback to recover the stolen funds and prevent their use by North Korea, which is believed to be behind the attack through the Lazarus Group. However, Ethereum’s core team firmly opposes such a move, citing technical infeasibility and the importance of blockchain immutability.

While this hack underscores the ongoing cybersecurity risks within the cryptocurrency sector, it also reflects the principles of decentralization and security in the crypto world. Such incidents, while challenging, can accelerate improvements in security and resilience within the industry, aligning with the philosophy of effective accelerationism (e/acc). Bitcoin, often seen as the gold standard in crypto security, was not directly affected, reinforcing its role as a secure store of value amidst the broader ecosystem’s dynamics.

As Bybit works to fortify its defenses, CEO Ben Zhou promised a comprehensive incident report and outlined plans for enhanced security measures. This event serves as a stark reminder of the need for continuous vigilance and innovation in the face of evolving threats.

“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.” – Ben Zhou, Bybit CEO

“12 hours from the worst hack in history. ALL withdrawals have been processed. Our withdrawal system is now fully back to normal pace, you can withdraw any amount and experience no delays.” – Ben Zhou, Bybit CEO

“The NK (North Korea) hack of Bybit is the largest heist of all time, of any medium (Central Bank of Iraq heist was ~$1 billion).” – Conor Grogan, Coinbase executive

Key Takeaways and Questions

• What was the amount stolen in the Bybit hack?

  $1.4 billion worth of Ethereum (ETH) and stETH.

• How did Bybit respond to the massive security breach?

  Bybit processed over 350,000 withdrawal requests within 12 hours, with CEO Ben Zhou confirming the exchange’s solvency and the 1:1 backing of all user assets.

• Who called the Bybit hack the largest heist of all time?

  Coinbase executive Conor Grogan.

• What plans did Bybit outline following the hack?

  Bybit planned to release a full incident report and implement new security measures in the near future.

• What potential community action was discussed in response to the hack?

  There were discussions about the possibility of an Ethereum fork to address the impact of the theft.