In February 2025, the cryptocurrency exchange Bybit suffered the largest hack in history, resulting in a $1.4 billion loss. Hackers targeted the company's cold wallet by exploiting system vulnerabilities.
How the Hack Happened
The attack targeted Bybit’s cold wallet, an offline storage used for protecting user assets. Hackers exploited vulnerabilities during the transfer of Ethereum from the cold wallet to a warm one, altering transaction details and manipulating smart contracts. The stolen funds were quickly transferred across multiple wallets and laundered through different protocols.
Immediate Aftermath and Reactions
The scale of the attack caused panic among Bybit users, with over 350,000 customers rushing to withdraw their assets. However, Bybit's CEO, Ben Zhou, reassured users that the exchange remains solvent and all client assets are backed. Bybit secured bridge loans to cover potential losses and ensure withdrawal requests were met.
Investigation and Next Steps
The attack has been linked to the notorious North Korean hacker group, Lazarus Group. Bybit is collaborating with law enforcement to track the stolen assets and has offered a reward for assistance in their recovery. The exchange is enhancing its security measures, including upgrading its cold wallet architecture and implementing real-time monitoring. Bybit has also fully compensated for the stolen funds, acquiring the necessary assets through OTC deals and loans.
The Bybit hack highlights the need for strengthened security measures even on advanced cryptocurrency platforms. Despite existing precautions, hackers managed to execute a record-breaking heist, raising concerns about the safety of systems once deemed secure.
