Crypto Chaos: Bybit’s $4 Billion Bank Run After Epic Hack! 💸😱

by

What to know:

  • Bybit, in a dramatic twist of fate, faced a $1.5 billion hack and a staggering $4 billion “bank run,” culminating in a total outflow of $5.5 billion. Talk about a financial exodus!
  • In a moment of sheer leadership, Bybit’s CEO Ben Zhou addressed the calamity, emphasizing the urgent need for loan coverage, user support, and the unfortunate impact of a temporary shutdown of Safe wallet functionalities. Because who doesn’t love a good crisis?
  • The origins of this hack remain shrouded in mystery, with Bybit investigating whether the issue lay with their laptops or the enigmatic Safe systems. Perhaps a rogue coffee spill?

In a tale worthy of a modern tragedy, the major cryptocurrency exchange Bybit witnessed a staggering outflow of over $5.5 billion following a near $1.5 billion hack. The culprits? Allegedly, the notorious Lazarus Group from North Korea, who made off with a hefty sum from Bybit’s ether cold wallet. Bravo, gentlemen!

According to the ever-reliable DeFiLlama, the total assets tracked on wallets associated with the exchange plummeted from around $16.9 billion to a mere $11.2 billion. A real rollercoaster of emotions, isn’t it?

During an X spaces session, the ever-determined CEO Ben Zhou called for “all hands on deck” to assist clients with processing withdrawals and addressing the inevitable inquiries about the unfolding drama. Because nothing says “trust us” like a frantic CEO!

In a shocking revelation, Zhou disclosed that the security breach allowed hackers to abscond with approximately 70% of their clients’ ether. Yet, in a twist of irony, it was stablecoins that users preferred to withdraw. Ether? Nah, give me the stable stuff!

Despite having reserves to cover these withdrawals, the situation escalated as Safe decided to temporarily shut down its smart wallet functionalities to “ensure absolute confidence in our platform’s security.” Because nothing screams “secure” like a sudden shutdown!

Safe, a decentralized custody protocol, provides smart contract wallets for digital asset management. Some exchanges integrated Safe, allowing users to maintain custody of their funds. A noble endeavor, indeed!

While the exchange had reserves to back up users’ withdrawals, a staggering $3 billion worth of USDT was trapped in a Safe wallet that had just been shut down. Talk about bad timing!

On social media, Safe reassured the public that while it had “not found evidence that the official Safe frontend was compromised,” it was temporarily shutting down “certain functionalities” out of an abundance of caution. Because who doesn’t love a little precautionary panic?

As Zhou and his team scrambled to figure out how to securely withdraw their $3 billion, withdrawal requests were piling up. Within two hours of the security breach, the exchange was inundated with requests to move over $100,000 off its platform. A veritable stampede!

In response to the chaos, Zhou instructed his security team to engage Safe to “find a better way to get this money out.” The team ultimately developed new software with code “based on Etherscan” to verify signatures “on a very manual level.” Because who needs automation in a crisis?

According to Zhou, the exchange’s team had to pull an all-nighter to fulfill withdrawals. As they managed to transfer the $3 billion in stablecoin reserves, they faced a bank run of “about 50%” of all funds within the exchange. Sleep? What’s that?

Since the incident, Zhou mentioned that the exchange has moved a significant amount of funds off of Safe cold wallets and is now contemplating what system to adopt in place of Safe. A classic case of “out with the old, in with the new!”

Pushing to “Roll Back” Ethereum Was not Off the Table

In the aftermath

Read More

2025-02-22 23:10