Cryptocurrency exchange Bybit has suffered what is believed to be the largest hack in history, with over $1.4 billion reportedly stolen by North Korea’s state-sponsored hacking group, Lazarus, on February 21. In an unconventional move, Bybit chose to keep withdrawals open and honored all user transactions despite the breach. CEO Ben Zhou reassured users through a video statement, asserting that the exchange had sufficient funds to cover withdrawals and was seeking immediate liquidity through external support instead of purchasing Ethereum (ETH) directly.
Onchain data indicated that Bybit received approximately 100,000 ETH from crypto exchanges Binance and Bitget shortly post-hack. Binance’s former CEO, Changpeng Zhao, clarified that the inflows linked to Binance originated not from the exchange itself but likely from large investors providing loans to Bybit. Bitget’s CEO, Gracie Chen, confirmed that the influx from her platform was its own, and the platform has blacklisted the hacker’s wallets to block illicit transactions.
In the aftermath, a dramatic decline in Bybit’s Ethereum holdings was observed, with a swift recovery following inflows. Data showed a drop of Bybit’s total asset balance by $2.535 billion due to the attack and subsequent withdrawals of $2.852 billion, reducing reserves to $5.387 billion. The hack impacted Ethereum and related tokens and resulted in a $246 million drop in Bitcoin (BTC), growing to around $1.22 billion.
In response, a bounty program by Arkham Intelligence launched, offering 50,000 Arkham tokens for anyone providing verifiable evidence identifying the hacker. Crypto investigator ZachXBT claimed the reward, linking the hack to the Lazarus Group and associating it with previous exploits, including the January Phemex exploit.
Despite the significant breach, Bybit, and Zhou have been commended for their crisis management and transparent communication. Auditor Hacken confirmed that user funds remain fully backed, ensuring the exchange’s solvency through turbulent times.
