Bybit Overcomes $1.4 Billion ETH Deficit After Historic Hack
Bybit has successfully restored a 1:1 asset coverage ratio for its clients after experiencing the largest cryptocurrency hack in history. The exchange managed to fill a $1.4 billion deficit by buying a significant amount of Ether (ETH) on the market. According to on-chain data, Bybit received a total of 446,870 ETH, equivalent to $1.23 billion, through loans, institutional deposits, and direct purchases.
A Return to Normalcy for Bybit
A few days after experiencing the largest hack in cryptocurrency history, Bybit has managed to restore a 1:1 asset coverage ratio for its clients. The exchange filled an estimated $1.4 billion deficit by purchasing Ether (ETH) massively on the market. On-chain data shows that Bybit acquired over $400 million through over-the-counter purchases, $300 million through direct purchases on exchanges, and an additional $300 million through loans. Funds were also received from major crypto entities.
$1.4 Billion in ETH: Unprecedented Hack
The attack, which occurred last Friday, targeted a cold wallet on Bybit that was supposed to be protected by its multisig functionality. However, the hackers used a sophisticated method involving the manipulation of the exchange’s user interface (UI) and URL, allowing them to modify the smart contract’s logic and redirect the funds to an unknown address. After stealing the funds, the attackers used multiple wallets and decentralized exchanges to fragment and liquidate their loot, making it more difficult to trace. According to renowned blockchain analyst ZachXBT, this attack is directly linked to the Lazarus group, a collective of North Korean hackers who have been involved in several massive crypto thefts.
The Impact on the Market and User Confidence
Bybit’s massive ETH purchases contributed to a 4% increase in the asset’s price over the weekend, although the market later corrected with a 4% decline in the past 24 hours. Currently, Bitcoin is trading below $96,000, while ETH has fallen below $2,700.
Despite this shock, user confidence seems to be holding up on Bybit. On Sunday night, the platform announced that deposits and withdrawals had resumed normally, with a slight increase in deposits compared to withdrawals on Saturday, indicating a return of investor confidence.
Can Bybit Turn the Page?
The scale of this hack highlights the security vulnerabilities that persist in the crypto ecosystem, even for leading platforms. Bybit managed to contain the crisis quickly, but this event brings back the risks of attacks on cold wallets, which are often considered infallible storage solutions. With a rapid recovery and proactive crisis management, Bybit seems to have avoided the worst by restoring liquidity. However, this attack once again raises the question of the resilience of centralized exchanges against persistent threats from hacker groups, particularly state entities like the Lazarus group.
