Dubai-based cryptocurrency exchange Bybit suffered a major breach resulting in the theft of $1.5 billion in Ethereum, sparking debates about blockchain rollback possibilities.
The Cryptocurrency Theft on Bybit
On February 21, 2025 Bybit was hacked, leading to the theft of around $1.5 billion in Ethereum. Hackers accessed one of Bybit's cold wallets, moving over 400,000 ETH to unknown addresses. Blockchain analytics firms Arkham Intelligence and Elliptic attribute this attack to North Korea's Lazarus Group, notorious for past cybercrimes.
Arthur Hayes’ Proposal and Community Reaction
In response, Arthur Hayes, co-founder of BitMEX, proposed rolling back the Ethereum blockchain to reverse the hack's effects. He cited the 2016 DAO hack's hard fork that returned $60 million and created Ethereum Classic. Hayes' proposal was widely rejected, with Ethereum developers and community members arguing a rollback contradicts decentralization and immutability, core Ethereum principles.
Technical and Philosophical Challenges
Beyond philosophical objections, technical issues make rollback infeasible. Ethereum's account-based model stores balances on-chain. Reversing transactions requires network-wide agreement, risking countless legitimate transactions. Gautham Santhosh, co-founder of Polynomial, noted rollback could disrupt Ethereum’s complex ecosystem with bridges, stablecoins, and more.
The Bybit hack highlights the urgent need for stricter security in the crypto space. The rollback debate underscores decentralized model importance and effective governance without data loss.
