Crypto exchange Bybit hacked for $1.4 billion worth of ETH

Following a security breach on its platform on Friday, crypto exchange Bybit announced that it suffered a hack where an attacker compromised one of its ETH wallets.

The unidentified attacker has stolen about $1.44 billion worth of ETH, stETH, cmETH and mETH, splitting them across several wallets, per Nansen data.

The total stolen funds so far include 401,347 ETH (~$1.12B), 90,376 stETH (~$253.16M), 15,000 cmETH (~$44.13M), 8,000 mETH (~$23M).

"Initially, the stolen funds were transferred to a primary wallet, which then distributed them across more than 40 wallets," wrote Nansen analysts. "The attackers converted all stETH, cmETH, and mETH to ETH before systematically transferring ETH in $27 million increments to over 10 additional wallets," they added.

Bybit has since addressed customer concerns, sharing updates on latest developments regarding the hack.

"The incident occurred when our ETH multisig cold wallet executed a transfer to our warm wallet. Unfortunately, this transaction was manipulated through a sophisticated attack that masked the signing interface, displaying the correct address while altering the underlying smart contract logic. As a result, the attacker was able to gain control of the affected ETH cold wallet and transfer its holdings to an unidentified address," Bybit explained in Friday's X post.

The $1.4 billion exploit is among the largest crypto hacks of all time, representing 16% of all previous hacks, per DefiLlama data.

Market participants reaction following the hack

While the news has caused panic across the crypto space, Bybit CEO Ben Zhou noted that the exchange is solvent and can maintain normal function even if the stolen funds are not recovered.

"Bybit is solvent even if this hack loss is not recovered, all of clients assets are 1 to 1 backed, we can cover the loss," wrote Zhou on X.

According to BitMEX Research, the stolen ETH funds represent 75% of all users' ETH deposits on Bybit.

Meanwhile, Coinmarketcap data indicates that Bybit's reserve was worth $16.2 billion before the hack, with the stolen funds representing 8.64% of its total assets.

The hack was first noticed by crypto investigator ZachXBT, who noted that the attacker had split the tokens across several wallets.

Crypto experts have advised exchanges and service providers to blacklist the addresses to prevent the hacker from selling the stolen funds. However, the attacker has already sold $200 million worth of stETH, according to crypto analytics platform Arkham.

The crypto market was trading in the green in the early American session but has since seen a correction following Bybit's hack. Bitcoin (BTC), Ethereum (ETH), XRP and Solana (SOL) are all slightly down over the past 24 hours.