Bybit, a prominent cryptocurrency exchange, has managed to recover half of its Ether reserves following a massive $1.4 billion hack that rocked the Web3 industry. The cyber attack, which occurred on February 21, wiped out large amounts of liquid-staked Ether and other ERC-20 tokens, marking it as the largest crypto theft to date.
In a swift response, Bybit replenished its Ether reserves to about 50% of their pre-hack levels within just two days after the attack. The exchange achieved this by purchasing 106,498 Ether valued at $295 million via over-the-counter trades. This was further bolstered by emergency transfers from major crypto exchanges. Notably, Binance contributed 50,000 Ether, Bitget sent 40,000 Ether, and Du Jun, co-founder of HTX Group, transferred 10,000 Ether.
Despite the setback, Bybit continued to operate effectively, handling over 350,000 withdrawal requests with a remarkable 99.9% completion rate within 10 hours post-exploit. The crypto industry showed robust support with near $400 million in emergency loans and transfers to aid Bybit’s recovery. A significant portion of these funds, 145,000 ETH valued at $390 million, came from Binance-based whales and other significant wallets.
Although the hack led to a sharp drop in Bybit’s total assets by more than $5.3 billion, its reserves continue to exceed liabilities, maintaining user funds’ full backing. Bybit’s independent Proof-of-Reserve auditor, Hacken, confirmed this financial health resilience.
The hack has been linked to North Korea’s Lazarus Group, known for previous high-profile crypto heists. Meir Dolev, CTO at Cyvers, noted the attack mirrored tactics seen in other significant hacks, involving a deceptive transaction that tricked approval of a malicious smart contract alteration, allowing hackers full control over Bybit’s cold wallet and its contents.
