On February 21, 2025, Bybit was hacked, losing approximately 400,000 ETH. Regardless, the exchange swiftly replenished reserves and safeguarded client assets.
The Attack and Recovery
The cyberattack on Bybit exploited a vulnerable transfer between wallets, resulting in the theft of about $1.5 billion in ETH. However, within 72 hours, the company managed to restore its reserves through loans, investor deposits, and direct purchases, ensuring all client assets were covered 1:1.
Market Dynamics Following the Breach
The hack caused significant volatility in net flows on the platform, temporarily depressing the market. As reserves were replenished and assets secured, stability returned, indicating restored trader confidence. Funding also fluctuated post-breach but eventually reverted to previous levels.
Institutional Perspective and Security
The event highlighted institutional adoption of Ethereum, evident from the increased open interest in CME futures. Meanwhile, investigations into a possible link to the Lazarus Group, a notorious North Korean hacking collective, emphasize the ongoing security challenges in the crypto industry.
Bybit's rapid recovery after the hack underscores their commitment to client asset protection. The incident serves as a reminder for the entire industry of the necessity for heightened security measures and accountability for safeguarding user funds.
