Crypto Catastrophe: ByBit’s $1.5 Billion Blunder! 😂💸

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In a rather disheartening revelation, the esteemed CEO of Bybit, Ben Zhou, took to the digital stage on a Friday, a day typically reserved for leisure, to announce the unfortunate fate of his crypto exchange. It appears that a staggering $1.5 billion has vanished into the ether—quite literally!—leaving the firm bereft of a significant portion of its customers’ Ethereum holdings.

“I believe it was around seventy percent,” Zhou lamented, as if reciting a tragic poem, when queried about the extent of the loss. “We usually keep sixty to seventy percent in our cold wallets, and alas, this was the amount.” One might wonder if he was contemplating a career in dramatic literature instead of crypto management.

What Caused The Hack?

The breach, first unearthed by the astute on-chain detective ZachXBT, saw over 400,000 Ether mysteriously depart from Bybit’s cold wallet, as if spirited away by mischievous sprites. The tokens were swiftly exchanged for their staked mETH and stETH counterparts, leaving the audience in a state of bewilderment.

Security experts at Cyvers, those modern-day knights of the digital realm, suggested that the hackers had cunningly deceived the guardians of Bybit’s cold wallet into signing a nefarious transaction that appeared, at first glance, to be entirely legitimate. Jack Sanford, the CEO of Sherlock DeFi, echoed this sentiment, revealing that the transaction had altered the rules of the multisig wallet’s smart contract to suit the hackers’ whims. The exact method of this deception remains shrouded in mystery, akin to a poorly written detective novel. “The UI itself could have been compromised, or perhaps each of these honest souls had their computers infiltrated,” mused Sanford, as if pondering the plot of a tragicomedy.

In a twist worthy of a grand tale, ZachXBT, the celebrated sleuth of the crypto underworld, presented “definitive proof” that the notorious North Korean “Lazarus Group” was behind this audacious heist. This group, infamous for their digital escapades, has previously targeted several major crypto exchanges, leaving a trail of chaos in their wake.

“TLDR myself and Josh from CF connected the Bybit hack on-chain to the Phemex hack,” ZachXBT remarked, as if summarizing a particularly convoluted plot twist.

Can Bybit Cover The Loss?

Despite the seismic upheaval, Zhou reassured his followers via tweet that all client losses would be covered by the exchange. “All client assets are 1:1 backed—we can cover the loss,” he declared, perhaps with a hint of bravado. During the stream, he mentioned that the exchange was seeking a “bridge loan” to navigate the turbulent waters of liquidity as they faced “massive withdrawals.”

“We have already secured almost 80% of the stolen Ethereum as a bridge loan, to help us with the liquidity crunch,” he added, as if attempting to conjure a financial miracle.

Thus far, Zhou has resisted the notion of pausing withdrawals, despite Binance co-founder Changpeng Zhao suggesting such a precaution. “1.5 billion is fear enough,” Zhao quipped. “Better to be safe than sorry now.”

In a more whimsical turn, BitMEX co-founder Arthur Hayes humorously called upon Ethereum co-founder Vitalik Buterin to “roll back the chain” to assist Bybit, reminiscent of the heroic deeds of yore when Ethereum leaders coordinated a similar action in response to the infamous DAO hack a decade ago.

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2025-02-22 01:43