Bybit Gets Hacked! Details of the Incident, Perpetrators, and Effects on the Crypto Market

Bittime - On February 21, 2025, the crypto world was rocked by the news of an overrun Bybit, one of the global crypto exchanges. Bybit confirmed affected hack and hackers managed to steal more than $1.4 billion in the form of Ethereum (ETH), making it one of the biggest hacks in digital asset history.

Details of the Bybit Hacked Incident

• Total Loss: According to a report from Nansen, hackers managed to take over 401,347 ETH, 90,376 stETH, 15,000 cmETH, and 8,000 mETH, with a total value of $1.4 billion.
• Hacking Methods: Attacker dominates cold wallet Bybit and successfully transferred all the funds to some unknown address.
• Impact on Users: Bybit ensures that all user assets are safe, 350,000 withdrawal requests have been successfully processed, and the withdrawal feature continues to run normally without interruption.
• Bybit's Financial State: Bybit insists it is still solvent, with asset reserves reaching $19.5 billion and annual profits expected to exceed $1 billion.

Read Also: Hacker Lazarus Group's Digital Assets Confiscated

How Does Hacking Happen?

According to analysis from @dilationeffect, this hack occurred due to high-level social engineering that exploited Bybit's multisignature wallet security system.

1. Multisig Signer Exploit
   • Hackers took over one of the signatories of Bybit's multisignature wallet using social engineering techniques.
2. Smart Contract Manipulation Via Delegatecall
   • The attacker uses the delegatecall function on the malicious contract to execute the transfer.
   • By utilizing the SSTORE instruction, they managed to change the address of Bybit's multisig contract implementation to their own address.
   • From the outside, these transactions look like ordinary transfers, but are actually contract manipulations that allow hackers to take control of funds.
3. Hakcer Bybit Temporary Allegation: Lazarus Group
   • Initial investigations into Bybit hackers point to the Lazarus Group, a hacker group from North Korea, which has repeatedly been the mastermind behind attacks on crypto exchanges and DeFi platforms.

How Does Bybit Cover Losses Due to Being Hacked?

Despite experiencing huge losses, Bybit has a clear strategy to ensure operations continue to run normally.

1. ETH Loans from Liquidity Bridge
   • Bybit uses loans from third parties to ensure users can still withdraw their ETH without interruption.
2. Huge Bybit Profits
   • Reports estimate Bybit's annual profits at more than $1 billion, so the exchange still has sufficient funds to overcome this incident.
3. Comparison with Binance
   • If Binance can pay $4.4 billion to the US Department of Justice (DOJ) without liquidity problems, then Bybit also has the financial capacity to cover this $1.4 billion.

The Impact of the Bybit Hack Incident on the Crypto Industry

1. Hackers Are Increasingly Sophisticated
   • This hack shows that attack methods are increasingly complex, combining technical exploits with social engineering attacks targeting key individuals within companies.
2. Multisig Wallet Security Questioned
   • This incident is proof that multisig wallets are not completely secure, and crypto platforms need to develop additional security methods, such as multi-party computing (MPC) or biometric authentication.
3. Trust in Bybit
   • Bybit handled this incident transparently, with Bybit CEO Ben Zhou even doing a livestream to explain the situation to the public, showing strong leadership in dealing with the crisis.

Conclusion

The Bybit incident being hacked is a warning to the entire crypto industry about the importance of improving cyber security. With $1.4 billion ETH lost, this is not only a threat to Bybit, but also to the entire crypto ecosystem.

This attack proves that hackers are becoming more sophisticated, and the crypto industry must continue to innovate in its security systems. Going forward, digital asset trading platforms need to strengthen their defense systems so that similar attacks do not happen again.

FAQ

1. Bybit was hacked?

Yes. On February 21, 2025, Bybit experienced a major hack where over $1.4 billion in Ethereum (ETH) was stolen from their cold wallet. This incident became one of the biggest hacks in crypto history.

2. Are Bybit users' funds safe after this incident?

Bybit ensures that all user assets remain secure and supported 1:1. Withdrawal processes continue to run normally, and Bybit has sufficient cash reserves to cover these losses without affecting platform operations.

3. How did hackers manage to steal funds from Bybit?

Hackers managed to exploit the security of multisignature wallets through complex social engineering. They used the delegatecall method on the malicious contract to change the address of the Bybit multisig contract, thereby allowing them to access the funds stored within it.

4. Who are the Bybit hackers?

Preliminary investigations indicate that the group Lazarus Group, which derive from North Korea, is most likely responsible for this attack. This group is known to be the mastermind behind various major hacks in the crypto industry.

5. What impact does the Bybit hack incident have on the crypto industry?

The Bybit incident being hacked further highlights the importance of cyber security in the crypto industry. In recent years, attacks on exchanges and crypto platforms have increased. In 2024 alone, the total digital assets lost due to hacking will reach $2.2 billion, an increase of 21.1% compared to the previous year. This case could be a warning to other exchanges to tighten their security systems.

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Reference

CoinTelegraph, ‘Biggest crypto hack in history’: Bybit exploit is latest security blow to industry, accessed February 22, 2025

Yahoo! Finance, Bybit Hack, Crypto’s Biggest Ever, Spoils Coinbase’s SEC Victory Party, accessed February 22, 2025

Market Watch, Crypto exchange Bybit suffers $1.4 billion hack. Here’s why it’s troubling for the industry, accessed February 22, 2025

Author: RC