Top Highlights
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Major Hack Revealed: Bybit CEO Ben Zhou announced that the crypto exchange lost approximately 70% of its customers’ ETH holdings, totaling around $1.5 billion in a recent security breach.
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Sophisticated Attack: The hack involved over 400,000 Ether being extracted from Bybit’s cold wallet, facilitated by tricking wallet key holders into signing a malicious transaction, with the infamous North Korean hacker group Lazarus suspected to be responsible.
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Security Assurance: Zhou reassured clients that all assets are 1:1 backed and that the exchange is seeking a bridge loan to manage liquidity and process heightened withdrawal demands.
- Industry Response: Suggestions arose from the crypto community, including pausing withdrawals for safety and calls for a potential rollback of the Ethereum blockchain to mitigate damages from the hack.
ByBit Loses 70% of Ethereum to Hacker, CEO Confirms
In a revealing livestream, Bybit CEO Ben Zhou announced that his crypto exchange lost approximately 70% of its Ethereum holdings due to a massive hack. This incident reportedly involved around $1.5 billion worth of crypto assets. Zhou cited the loss when responding to questions from viewers. "We normally keep sixty to seventy percent in cold wallets," he stated.
The hack, first reported by blockchain investigator ZachXBT and other prominent figures, involved over 400,000 Ether leaving Bybit’s cold wallet. Speculations suggest that the hackers executed a complicated maneuver, tricking those responsible for the wallet keys into authorizing a fraudulent transaction. Security experts indicated that the hackers may have compromised the user interface or the signers’ computers, allowing them to manipulate the multisig wallet’s smart contract.
Further investigations revealed that the attack traced back to the North Korean hacking group, the Lazarus Group. This notorious group has targeted several major crypto exchanges in the past, raising concerns about the increasing sophistication of cyberattacks in the cryptocurrency sector.
Despite this setback, Zhou reassured clients that Bybit could cover all losses. “All client assets are 1:1 backed—we can cover the loss,” he tweeted. The exchange is currently seeking bridge loans to address an immediate liquidity crunch as users initiate "massive withdrawals."
Though some industry leaders, like Binance co-founder Changpeng Zhao, recommended pausing withdrawals as a precaution, Zhou remained firm on keeping operations normal. In a playful suggestion, BitMEX co-founder Arthur Hayes even called on Ethereum co-founder Vitalik Buterin to consider rolling back the blockchain, referencing a past coordinated action after the DAO hack.
This incident highlights the ongoing challenges and vulnerabilities within the cryptocurrency industry, emphasizing the need for improved security measures as technology continues to advance.
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Disclaimer
This content is for informational and entertainment purposes only and does not constitute financial or investment advice. Cryptocurrency is highly speculative and carries significant risk, including the potential loss of your entire investment. Do not make financial decisions based on this information. Consult a licensed financial advisor before investing. This site does not offer, sell, or advise on cryptocurrency, securities or other regulated financial products in compliance with SEC and applicable laws. Please do your own research and seek professional advise.
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