Bybit, the world’s second-largest cryptocurrency exchange by trading volume, has recently been struck by an unprecedented disaster. A Friday morning hack resulted in a loss of up to $1.44 billion. According to the latest report from blockchain analytics firm Chainalysis, this incident not only sets a new record for the largest single theft in the cryptocurrency industry but also accounts for half of the total hacker-related losses for 2024. The “digital heist” has exposed the vulnerabilities in crypto exchange security and has sparked a deep reflection on trust within the industry.
Bybit CEO Ben Zhou confirmed in an emergency post on Friday morning that hackers successfully infiltrated the platform’s offline Ethereum wallet and transferred all its assets—comprising 401,347 ETH (approximately $1.12 billion) and $320 million worth of staked ETH tokens—into unknown addresses. According to data analysis firms Nansen and Arkham Intelligence, the stolen funds were rapidly dispersed into 53 separate wallets, highlighting the hackers’ high level of organization and technical sophistication.
In a live broadcast later on X, Zhou revealed that the attack’s suddenness caught Bybit off guard. “We always believed offline storage was a safe fortress, but the hackers clearly found a breakthrough,” he admitted. Within 10 hours of the incident, Bybit received more than 350,000 withdrawal requests, leading to a massive strain on the platform’s system. Despite the panic-induced withdrawals, Zhou emphasized that 99.994% of withdrawals were completed, and all services remained operational as the team worked tirelessly to reassure users.
Ripple Effects of the $1.44 Billion Theft
The $1.44 billion theft quickly caused a market shock. Bitcoin fell 3% on the day, while Ethereum dropped by 4%, signaling a shift in investor confidence across the crypto market. Shunyet Jan, Head of Bybit’s Derivatives and Institutional Business, commented in an interview, “No one is immune right now. This is not just a Bybit crisis, but a trust test for the entire industry.”
In response to customer concerns, Zhou made public promises to stabilize the situation. He stated on X that despite the “almost irreversible” losses, Bybit remains solvent, and customer assets are fully backed by company reserves on a 1:1 ratio. “We have enough cash flow and crypto assets to cover this hole,” he emphasized. However, whether this “out-of-pocket” promise will truly calm the panic remains to be seen.
The Biggest Hack in History: A Wake-Up Call for Industry Security
Chainalysis’ report highlighted that the $1.44 billion loss from Bybit far exceeds the previous industry records, such as the $615 million theft from the Ronin Network in 2022 and the $613 million attack on the Poly Network in 2021. In comparison, the largest hacker incident of 2024 prior to this—the $300 million theft from Japan’s DMM Bitcoin exchange—seems relatively insignificant. This “heist of the century” not only sets a new monetary record but also exposes the vulnerabilities of crypto exchanges when faced with sophisticated threats.
Although the identity of the hackers remains unclear, Chainalysis analysts suggest that North Korean hacker groups may be behind the attack. Known for using complex malware and social engineering attacks on crypto platforms, their goal is often to steal funds to support national projects and circumvent sanctions. If this theory proves accurate, this would mark another “textbook” success for North Korean hackers following their attacks on DMM Bitcoin and the Ronin Network.
The Hacker’s Next Move: Sell or Lie Low?
The hackers currently hold over 500,000 ETH, a value far exceeding the 240,000 ETH held by Ethereum co-founder Vitalik Buterin. Blockchain security teams are monitoring these funds in real time, but selling such a large amount of assets will not be straightforward. On one hand, a massive sell-off could trigger a market collapse and depress ETH prices. On the other hand, the transparency of on-chain tracking makes it difficult for the hackers to quietly move the funds. Interestingly, because the “cost” of obtaining these ETH is zero, the hackers may not be in a hurry to maximize profits and could instead choose to lie low, waiting for the right market moment.
This standoff introduces new uncertainties into the market. If the hackers adopt a “slow release” strategy and gradually sell off the stolen assets, it could continue to suppress ETH prices over the coming months, creating an implicit “hacker tax” that may delay the recovery of the Ethereum ecosystem.
The timing of this hack is especially sensitive. With Ethereum’s annual event, ETHDenver, just days away, the conference has traditionally served as a platform for major updates and market confidence boosts within the Ethereum ecosystem. However, the Bybit incident comes amidst ongoing internal disputes—ranging from doubts over Vitalik Buterin’s leadership to strategic disagreements within the Ethereum Foundation—already weighing on industry morale. Now, the $1.44 billion theft has added insult to injury, casting a dark shadow over the event.
A Turning Point Amid Trust Crisis
This disaster may mark a “phoenix-like rebirth” for the crypto industry. In the short term, Bybit’s losses and market turmoil could exacerbate user skepticism toward centralized exchanges (CEXs), leading to a shift in funds toward decentralized platforms (DEXs) and self-custody wallets. However, in the long run, this event could push the industry to accelerate security upgrades, such as widespread adoption of multi-signature wallets, real-time on-chain audits, and the development of AI-based intrusion detection systems.
Moreover, regulators may seize this opportunity to tighten compliance requirements for exchanges, pushing for global uniformity in crypto security standards. Ironically, the hackers’ “extreme test” may become the catalyst for the industry’s maturation.
The Bybit hack is not only a shocking robbery in the digital age but also a turning point in the history of the cryptocurrency industry. For Bybit, this is a battle for survival; for the broader ecosystem, it is an opportunity to redefine trust and security. While the $1.44 billion cost is painful, it may lead to a more resilient and transparent crypto future. As for the 500,000 ETH in the hands of the hackers, their ultimate fate may be the most gripping chapter of this ongoing saga.