Bybit Crypto Exchange Hacked, Over $1.4 Billion in Ethereum Stolen in Record-Breaking Breach

In a stunning blow to the cryptocurrency industry, Bybit, one of the world’s leading crypto exchanges, has fallen victim to a massive hack, losing over $1.4 billion worth of Ethereum (ETH) and related tokens. The breach, confirmed by Bybit CEO Ben Zhou on Friday, marks the largest cryptocurrency theft in history, eclipsing the infamous $620 million Ronin network hack of 2022.

The attack targeted Bybit’s Ethereum multisig cold wallet during a routine transfer to a warm wallet. According to Zhou, the hacker employed a sophisticated “masked” transaction technique, manipulating the user interface of the Safe platform to display a legitimate address and URL. This deception tricked wallet signers into approving a malicious smart contract update, granting the attacker control over the wallet’s logic. In a matter of minutes, approximately 401,346 ETH—valued at over $1.1 billion at current prices—along with 90,376 stETH, 15,000 cmETH, and 8,000 mETH, were siphoned off.

On-chain sleuth ZachXBT first raised the alarm, spotting suspicious outflows totaling more than $1.46 billion. Blockchain analysts report that the stolen funds were quickly funneled into a primary wallet before being dispersed across at least 48 addresses to evade tracking. Some $200 million in stETH has already been swapped for ETH on decentralized exchanges, hinting at efforts to launder the haul.

Despite the staggering loss, Bybit has sought to reassure its users. “Our total assets under management exceed $20 billion, and client funds remain secure with 1:1 backing,” Zhou said in a statement. He emphasized that only the Ethereum cold wallet was affected, with all other wallets intact and withdrawals proceeding as usual. However, the exchange has seen a surge in withdrawal requests, with thousands of users queuing to move their assets amid shaken confidence.

The crypto market felt immediate ripples, as Ethereum’s price dipped more than 3% to $2,727 within hours of the news. Analysts suggest the sell-off reflects broader fears of market instability following such a high-profile breach.

Bybit is now working with blockchain forensics teams to trace the stolen funds and has engaged law enforcement to pursue the culprits. While no group has been definitively linked to the attack, speculation points to sophisticated actors like North Korea’s Lazarus Group, known for orchestrating large-scale crypto heists in the past.

The incident underscores ongoing security challenges in the cryptocurrency sector, where exchanges remain prime targets for hackers. As investigations unfold, the Bybit hack serves as a stark reminder of the risks in the rapidly evolving world of digital assets.