The Biggest Crypto Heist Ever $1.5B Stolen from Bybit

Dear Reader,

Bybit, one of the world’s largest cryptocurrency exchanges, has just experienced what may be the biggest crypto heist in history, hackers have managed to steal about $1.5 billion in digital assets from Bybit’s cold wallet. (An offline storage system designed for higher security.) This massive theft has stunned the crypto community, and raised serious questions about safety in a market that is becoming less regulated.

The attack happened when hackers gained control of one of Bybit’s Ethereum cold wallets and moved the funds into unknown addresses. Bybit confirmed the breach almost immediately when CEO Ben Zhou posted on X that a significant amount of Ethereum had been transferred out. The size of this hack far surpasses previous thefts such as the $611 million lost by Poly Network in 2021 and the $570 million drained from Binance in 2022.

News of the heist sent shockwaves through the market. Bitcoin’s price dropped from around $98,000 to $96,000 as traders reacted to the news. Many investors now worry that if a secure system can be compromised, other exchanges might be at risk as well. With the SEC relaxing some of its oversight, the vulnerability of crypto platforms has become a hot topic among experts.

On chain detective ZachXBT traced the stolen Ethereum to wallets linked to North Korea’s Lazarus Group, a state-sponsored hacking collective known for its major crypto thefts. Lazarus Group is infamous for using complex methods to launder stolen funds, converting tokens into Ethereum, then into Bitcoin, and mixing transactions to hide their trail. Such methods can take years, leaving little hope of recovery for the stolen assets.

To address the crisis, Bybit acted swiftly. The exchange secured a bridge loan from rival Bitget, which loaned 40,000 ETH roughly $106 million to help manage the surge in withdrawal requests. In the hours following the breach, Bybit faced a bank run, with 350,000 withdrawal requests in just 10 hours. Although most requests were processed, thousands remain delayed. Even with $16.2 billion in reserves, losing $1.5 billion wiped out about 9% of Bybit’s total assets, causing panic among users.

Security experts have expressed concern that such large scale attacks could become more common as regulatory oversight diminishes, leaving exchanges more exposed to state-sponsored hackers. Ben Zhou has reassured customers that the exchange remains solvent and that all other cold wallets are secure.

This event is a turning point for the crypto industry, forcing everyone to re-examine their security protocols, and the effectiveness of current regulations. If hackers are able to exploit even the most secure systems, investors and users alike must remain vigilant.

This incident, serves as a reminder of the risks of the rapidly evolving world of crypto.

Stay tuned for more updates

Street Fin Gazette