Bybit's $1.4B Crypto Hack: Ethereum Plunges, Industry Rallies

Cryptocurrency exchange Bybit suffered a significant blow today, losing approximately $1.4 billion in a major hack that targeted its Ethereum-based tokens. The incident triggered a swift market response, with Ethereum's price dropping by 2% to $2,685 and Bitcoin's trading value declining by more than 1% to $96,632.

Bybit CEO Ben Zhou confirmed the hack via his X account, revealing that attackers exploited a scheduling error in the exchange's wallet transfer system. The hackers managed to modify smart contracts, gaining control of Bybit's ETH cold wallet and transferring all funds to an unknown wallet. Zhou assured users that other cold wallets remained secure, and withdrawals were functioning normally.

In response to the crisis, the crypto community rallied around Bybit. Binance CEO Richard Teng announced that the Binance team was actively providing assistance. Major crypto platforms, including Bitget and MEXC, transferred funds to support Bybit's liquidity. MEXC moved 12,652 stETH worth $33.75 million to Bybit's cold wallet, while Bitget provided a $170 million financial assistance.

An institutional entity also transferred 11,800 ETH worth $31 million through Binance to Bybit's cold wallet. Bybit received a combined total of more than 50,000 ETH from Binance and Bitget. The ETH deposit from Bitget accounted for 25% of the exchange's total funds. Bybit manually organized the fund transfers, as it maintains a non-standard deposit system.

The Bybit team is currently investigating the breach and taking measures to protect its system. The incident highlights the increasing security demands faced by cryptocurrency exchanges and the risks users face when dealing with the cryptocurrency industry.