Bybit hit by crypto’s worst hack with almost US$1.5 billion stolen

CRYPTO exchange Bybit said it was hacked, resulting in what analysts estimate was the loss of almost US$1.5 billion worth of tokens in the biggest theft ever experienced in the industry.

A hacker took control of one of Bybit’s offline Ethereum wallets, the exchange’s chief executive officer Ben Zhou said in a post on X on Friday (Feb 21). An estimated US$1.46 billion in assets flowed out of the wallet in a series of suspicious transactions, according to posts by on-chain analyst ZachXBT on Telegram. Research firm Arkham Intelligence confirmed around US$1.4 billion in outflows from the exchange, posting on X that “the funds have begun to move to new addresses where they are being sold.” 

The hack is the largest ever crypto theft, according to blockchain analytics firm Elliptic, surpassing the US$611 million stolen from Poly Network in 2021. It was likely the “largest incident ever, not just crypto,” said Rob Behnke, co-founder and executive chairman of blockchain security firm Halborn. 

Zhou went on a livestream on social-media platform X in an effort to alleviate clients’ concerns about the hack. The exchange has taken out bridge loans with partners and has secured about 80 per cent of funding needed to cover the loss, he said. At the same time, Bybit will try to recover the funds and take necessary legal action against the hackers.

“Your money is safe and our withdrawals are still open,” said Zhou on the livestream, appearing in a black T-shirt with the Bybit logo. He added that the exchange has processed more than 70 per cent of all withdrawal requests following the hack. The exchange currently is not buying any Ether to cover the stolen assets on the platform, he added. 

Founded in 2018, Bybit is one of the world’s largest crypto exchanges, processing more than US$36 billion in daily average trading volume. The Dubai-headquartered platform, which is not available in the US, had roughly US$16.2 billion in assets on its exchange prior to being hacked, according to reserves data from CoinMarketCap, making the stolen Ether equivalent to roughly 9 per cent of its total assets. 

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Ether slipped as much as 6.7 per cent from its high of the day following ZachXBT’s initial Telegram post about the incident. Other cryptocurrencies were also lower, with Bitcoin dropping almost 3 per cent from its high of the day. 

Ethena Labs’ USDe, a popular token among crypto traders that acts like a “synthetic dollar,” briefly lost its one-to-one value to trade at around 98 US cents, according to data from CoinGecko. The project said that although it conducts some trading on Bybit, it remains fully collateralised. BLOOMBERG