Unprecedented $1.5 Billion Heist: Bybit Cryptocurrency Exchange Hacked
On February 21, 2025, Bybit, a prominent cryptocurrency exchange headquartered in Dubai, suffered a sophisticated cyberattack resulting in the theft of nearly $1.5 billion worth of Ethereum tokens. This incident is now recognized as the largest cryptocurrency heist in history, surpassing previous records held by breaches such as the Ronin Network and Poly Network hacks.
Details of the Breach
The breach occurred during a routine transfer between Bybit’s offline “cold” wallet and its online “warm” wallet. Cold wallets, which store private keys offline, are generally considered more secure than their online counterparts. However, in this instance, the transaction was manipulated through a sophisticated attack that masked the signing interface, displaying the correct address while altering the underlying smart contract logic. This manipulation allowed the attacker to gain control of the Ethereum cold wallet and transfer its holdings to an unidentified address.
Blockchain analytics firm Nansen reported that the hacker stole 401,347 Ether, 90,376 stETH, 15,000 cmETH, and 8,000 mETH, totaling over $1.4 billion. The stolen funds were initially transferred to a primary wallet and subsequently distributed across multiple unidentified addresses.
Bybit’s Response
In the immediate aftermath, Bybit’s co-founder and CEO, Ben Zhou, addressed the situation via a livestream, confirming the theft and assuring users that all other cold wallets remained secure. He emphasized that Bybit is solvent and that all client assets are backed 1:1, stating, “Bybit is solvent even if this hack loss is not recovered; all client assets are 1:1 backed; we can cover the loss.”
Despite the massive withdrawal requests following the hack, Zhou noted that the exchange had processed over 70% of these requests and had secured bridge loans to cover 80% of the stolen Ether. Operations on the platform continued without interruption, and all client funds remained safe.
Industry Implications
This unprecedented theft has sent shockwaves throughout the cryptocurrency industry, highlighting persistent security vulnerabilities in digital asset platforms. The incident has raised questions about the effectiveness of current security measures, even those involving cold wallets, which are traditionally deemed more secure.
The hack also had immediate market repercussions. Both Bitcoin and Ether experienced slight declines following the news, with Bitcoin falling 1.4% to around $96,986 and Ether declining 1.9% to $2,675.
Ongoing Investigation
Bybit has reported the incident to relevant authorities and is collaborating with blockchain forensic experts to trace the stolen assets. While the exact identity of the perpetrators remains unknown, some researchers have suggested potential links to the North Korea-based Lazarus Group, notorious for orchestrating significant cryptocurrency heists.
As the investigation continues, this event serves as a stark reminder of the critical need for robust security protocols in the rapidly evolving cryptocurrency landscape.
