Key Points
- Bybit lost $1.4 billion in an Ethereum hack reportedly linked to the Lazarus group.
- There are calls for Ethereum’s founder, Vitalik Buterin, to roll back the chain to help recover the funds.
Bybit recently suffered a significant loss of $1.4 billion due to an Ethereum hack. The hack is believed to be the work of the infamous Lazarus group, which led to a wave of withdrawals from the crypto exchange.
Ben Zhou, Bybit’s founder and CEO, reported that the exchange experienced an unprecedented number of withdrawal requests. However, he assured that all these requests were handled efficiently.
Details of the Hack
The hack was a sophisticated attack that manipulated signers into unknowingly handing over control of the exchange’s multi-signature cold wallet. The hackers managed to extract about 400k ETH from the compromised wallet, which was then divided into 10k ETH chunks and distributed to several other addresses. These addresses have since been linked to the Lazarus group by on-chain detective ZachXBT.
Following the hack, Bybit’s Ethereum reserves plummeted from 443k ETH to around 39k ETH. The hack also sparked fear among Bitcoin investors, leading to the withdrawal of 713 BTC from the exchange.
Efforts to Recover the Funds
To manage the withdrawal pressure amid its low Ethereum reserves, Bybit reportedly received Ethereum loans from Bitget and Binance. According to SpotOnChain, Bybit received over $170M in Ethereum loans. Despite this, the exchange is still short of the $1.2 billion in stolen funds.
Bybit’s CEO has asserted that the exchange is solvent and can cover all user losses, even if the stolen funds are not recovered. ZachXBT suggests that a partial recovery of the stolen funds is more likely, though laundering $1.46B could prove challenging.
Prominent figures like Samson Mow and Arthur Hayes have called on Ethereum’s founder, Vitalik Buterin, to roll back the chain to recover the funds. Buterin, however, has yet to respond. Following the hack, Ethereum’s value fell by about 7%, before stabilizing at $2.68k.
