Bybit, a major cryptocurrency exchange, experienced a staggering $5.5 billion outflow following a $1.5 billion hack. The hackers, believed to be from North Korea’s Lazarus Group, drained 70% of Bybit’s clients’ ether, leading to a significant drop in total assets from $16.9 billion to $11.2 billion. In response, Bybit’s CEO Ben Zhou called for an all-hands-on-deck approach to manage withdrawals and inquiries. Despite the crisis, most users withdrew stablecoins rather than ether. The exchange had to secure a loan to cover withdrawals, with $3 billion in USDT trapped in a Safe wallet that was temporarily shut down for security reasons. Bybit’s team worked tirelessly, developing new software to manually verify signatures and move funds, facing a bank run of about 50% of its total funds. The exchange has since engaged authorities and blockchain analysis firms to recover the stolen funds, with discussions about potentially rolling back the Ethereum blockchain. The exact cause of the hack remains under investigation.
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