TLDR:
- Bybit cryptocurrency exchange suffered a massive $1.5 billion hack on Friday, with hackers targeting Ethereum and related assets through a sophisticated “musked” transaction method
- Binance founder CZ advised Bybit to halt all withdrawals as a security measure, despite concerns this could increase market fear
- Bybit CEO Ben Zhou confirmed the exchange remains solvent with $20 billion in assets even if the stolen funds aren’t recovered
- Blockchain analyst ZachXBT reported the hacker is splitting stolen ether across 48 addresses, with $200 million already swapped on decentralized exchanges
- The hack triggered a 3.66% drop in Ethereum’s price, falling from $2,741.59 to $2,653
Cryptocurrency exchange Bybit been hacked for $1.5 billion in digital assets, primarily consisting of Ethereum and related tokens. The hack, which occurred on Friday, represents one of the largest cryptocurrency exchange breaches in recent history.
The attack employed what experts describe as a “musked” transaction method to bypass the exchange’s security systems. This sophisticated approach allowed hackers to gain control of an important offline wallet by making their malicious transfers appear as routine transactions, which the exchange’s team unknowingly approved.
Blockchain analyst ZachXBT reported that the hackers have begun moving the stolen funds. Two batches of 10,000 ETH have been split across 48 different addresses, indicating an attempt to obscure the trail of stolen assets. Additionally, approximately $200 million worth of mETH and stETH has already been converted through various decentralized exchanges.
Binance founder Changpeng Zhao (CZ) advised Bybit to temporarily suspend all withdrawals as a security precaution. “Not an easy situation to deal with. Might suggest to halt all withdrawals for a bit as a standard security precaution. Will provide any assistance if needed. Good luck,” CZ posted on X.
Not an easy situation to deal with. Might suggest to halt all withdrawals for a bit as a standard security precaution. Will provide any assistance if needed. Good luck! 🙏
— CZ 🔶 BNB (@cz_binance) February 21, 2025
When users expressed concerns that a withdrawal halt might increase market fear, CZ defended his recommendation, stating, “1.5 billion is fear enough. Better to be safe than sorry now.”
Despite the massive loss, Bybit CEO Ben Zhou moved to reassure users about the exchange’s financial stability. According to data from Arkham, Bybit maintains approximately $20 billion in assets. Zhou emphasized that “the exchange is solvent even if this hack loss is not recovered.”
The crypto industry has shown solidarity with Bybit during this crisis. Tron founder Justin Sun announced his organization would assist in tracking the stolen funds, posting on X: “We have been monitoring the Bybit incident very closely and will do our best to assist our partners in tracking the relevant funds, providing all the support within our capabilities.”
We have been monitoring the Bybit incident very closely and will do our best to assist our partners in tracking the relevant funds, providing all the support within our capabilities.
— H.E. Justin Sun 🍌 (@justinsuntron) February 21, 2025
Binance co-founder Yi He has also extended support to help Bybit navigate through this security crisis. The response highlights the cryptocurrency industry’s collaborative approach to addressing major security incidents.
The market impact of the hack was immediate and measurable. Ethereum’s price dropped by 3.66% following the news, declining from $2,741.59 to $2,653 within 24 hours of the announcement.
Security experts examining the breach have highlighted the sophisticated nature of the attack. The hackers’ ability to execute what appeared to be normal transactions points to advanced capabilities in circumventing standard security protocols.
The incident has renewed focus on cryptocurrency exchange security measures. Two-factor authentication (2FA) remains a critical tool for protecting assets, though in this case, the attackers managed to bypass such protections through their “musked” transaction strategy.
Increasing Attacks
The theft occurs against a backdrop of increasing attacks on cryptocurrency platforms. Last year, several exchanges implemented withdrawal suspensions following security breaches, including zkLend, which lost over $9 million in a similar incident.
Blockchain monitoring continues as the stolen funds move through various addresses and exchanges. Security teams are tracking these movements to potentially identify patterns or destinations that could aid in recovery efforts.
The hackers’ rapid conversion of stolen assets to other forms of cryptocurrency suggests a predetermined strategy to avoid asset recovery efforts. The use of decentralized exchanges for converting the stolen funds makes tracking and recovery more challenging.
Current reports indicate ongoing efforts to trace and potentially recover the stolen assets, with multiple blockchain analysis firms and security teams collaborating in the investigation.
