I’ve been in crypto since 2013. I survived the collapse of MTGOX in 2013 and the FTX disaster in 2021. I’ve witnessed the Bitfinex hack in 2016 and the Binance breach in 2019. But nothing prepared me for what happened today. Bybit, my go-to exchange and one of the largest crypto platforms, was hacked.
I was on a call with my sister and one-year-old niece when I got the notification. Bybit was hacked. It felt unreal, especially since we promote Bybit on our site every day. I trust Bybit; it’s the third-largest crypto exchange and, in my opinion, the most user-friendly. I even have a significant portion of my net worth stored there.
Today, I found myself caught up in the biggest hack in cryptocurrency history.
The Bybit Hack: Details of the Attack
Bybit, one of the top crypto exchanges globally, was hit by a devastating hack. Hackers managed to drain an astonishing $1.5 billion in digital assets, making it the largest crypto heist to date. This attack has eclipsed previous major hacks, including the Poly Network hack in 2021 and Binance’s 2022 breach.
The stolen funds, primarily in Ethereum (ETH), were quickly moved across multiple wallets, and the hackers were able to liquidate them on various platforms. Blockchain analytics firm Elliptic traced the stolen crypto, showing that the funds were dispersed across several wallets and exchanges.
Bybit’s CEO, Ben Zhou, reassured users that the exchange’s other cold wallets remained secure, and withdrawals were still functioning normally. However, the news of the hack caused widespread panic, and many users rushed to withdraw their funds.
In private chat’s with my Bybit rep, I was reassured that all funds in Bybit are backed 1:1 or more. You can see the last audit from mid January here. This gave me some peace of mind while I was waiting on my funds to arrive.
A Bank Run on Bybit: Record Withdrawals Processed
As news of the hack spread, Bybit experienced what can only be described as a “bank run.” Users rushed to withdraw their funds, fearing that the exchange might be on the brink of insolvency. The volume of withdrawal requests surged to record numbers, as investors scrambled to secure their assets.
Despite the overwhelming surge in withdrawal demands, Bybit managed to process all the requests. In a post on X (formerly Twitter), CEO Ben Zhou confirmed that “all withdrawals are NORMAL,” assuring users that the exchange was still operational and functioning as intended. He also mentioned that the platform had secured bridge loans from undisclosed partners to cover any unrecoverable losses.
Zhou’s prompt actions and reassurances helped to stabilize the situation, and withdrawals continued without significant delays. His statements on X were crucial in preventing further panic among users. According to Ben Zhou, the exchange was working tirelessly to meet all withdrawal requests, demonstrating the platform’s commitment to resolving the crisis as quickly as possible.
12 Hours after the hack, all withdrawals have been processed. I can confirm that my last remaining withdrawal was backlogged and I received it minutes before Ben said all funds were transferred. My funds and trading career are saved. More importantly, my kids collegue funds didn’t go to Korea.
The Connection to North Korea’s Lazarus Group
As the investigation unfolded, blockchain analysts, including Elliptic and ZachXBT, linked the hack to North Korea’s notorious Lazarus Group. This state-sponsored hacking collective has a long history of targeting cryptocurrency platforms to fund North Korea’s activities.
The Lazarus Group has been responsible for some of the most significant attacks in the crypto industry, including the $625 million Ronin Network hack and the $100 million breach of Atomic Wallet. The group is known for its sophisticated tactics, using advanced money laundering methods to cover their tracks.
According to Tom Robinson, chief scientist at Elliptic, their team has labeled the hacker’s addresses in their software to prevent the stolen funds from being cashed out on other exchanges. As authorities work to trace the stolen crypto, they hope to recover some of the funds, though large-scale thefts continue to be a major concern in the crypto industry.
Bybit’s Response: Damage Control and Customer Assurance
In response to the hack, Bybit took swift action. CEO Ben Zhou confirmed that the platform had secured a bridge loan from undisclosed partners to cover any unrecoverable losses. The exchange also assured users that they had reported the hack to the authorities and were actively working with on-chain providers to track the stolen assets.
Bybit’s quick response helped stabilize the situation. However, the breach triggered a massive rush of withdrawals as users feared the platform’s solvency. Zhou later confirmed that the withdrawal requests had been stabilized, with the exchange working hard to meet users’ demands. Ben went to livestream about 90 min after the hack to explain the situation and steps they were taking.
ZachXBT also pointed out that the Bybit hack might be linked to a previous attack on the Phemex exchange in January, where hackers stole $30 million. This connection further suggests that Lazarus Group was behind both attacks.
The Market Reaction: A Crash in BTC and Altcoins
The aftermath of the Bybit hack had a dramatic impact on the broader crypto market. Bitcoin (BTC), which had been climbing toward $100,000, saw a sharp decline of over $4,000 following news of the attack. Other altcoins, including XRP, DOGE, and ADA, also dropped by more than 6%.
The total value of liquidated positions reached over $600 million, reflecting the widespread panic in the market. The largest liquidation came from HTC, a whale with a $45.8 million position, which was completely wiped out.
The Bybit Hack Aftermath: A Personal Experience
As for me, I was able to withdraw most of my funds from Bybit. It wasn’t easy. While I managed to get 85% of my assets out fairly quickly, the remaining funds took about seven hours to process. Fortunately, I didn’t lose anything in the end, though some of my open positions didn’t perform well due to the market’s reaction.
This experience has been a valuable lesson. No exchange, no matter how big or trusted, is completely safe from hackers. The reality is that only risk what you’re willing to lose. I’ve learned that security should always be a top priority.
Would I Trade on Bybit Again?
Despite the hack, I would still trade on Bybit. My initial reaction in situations like this is always damage control—withdraw what you can, keep it safe, and wait for the dust to settle. If everything looks good after some time, I may consider redepositing. It’s important to stay calm and assess the situation thoroughly.
Bybit has assured its users that it will work hard to recover from the incident. It’s also offering bridge loans to make sure operations continue smoothly. I’ll check tomorrow to see if they offer a nice fresh deposit bonus to encourage users to return.
Final Thoughts: The Impact of the Bybit Hack
The Bybit hack is a wake-up call for the entire cryptocurrency community. Even the largest and most trusted exchanges are vulnerable to sophisticated cyberattacks. As hackers continue to target digital asset platforms, users must remain vigilant and take steps to protect their funds.
While the recovery from this hack will take time, it’s important to remember that security in the crypto world is still a work in progress. The rise of state-sponsored hacking groups like Lazarus Group only makes it more challenging.
In the end, the key takeaway is this: Always stay informed, take action quickly in emergencies, and never risk more than you’re willing to lose. The crypto world may be full of opportunities, but it’s also filled with risks.
We will keep updates surrounding this event in our crypto news blogs we post semi weekly.
If you trust Bybit like we do, might as well claim a bonus!
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