Bybit Hack: Crypto Community in Turmoil as Withdrawals Struggle, Pi Network Surges

The Bybit hack, which occurred earlier today, has sent shockwaves through the crypto community, with conflicting narratives surrounding the security breach. The exchange is facing extreme liquidity demand for withdrawals, while the Pi Network has surged nearly 10% in value.

Users are experiencing difficulty withdrawing their funds due to high demand, but Bybit CEO Ben Zhou has assured them that withdrawals will remain open. Zhou has stated that the exchange has enough funds to remain solvent and that it will take loans to ensure all withdrawal requests are fulfilled.

Safe.eth, the multisig wallet that manages Bybit’s Ethereum cold wallet, has denied any breach on their end. The firm claims that their security team is working closely with Bybit on an ongoing investigation and that they have not found evidence that the official Safe frontend was compromised. However, out of caution, Safe Wallet is temporarily pausing certain functionalities.

If the attackers managed to fool Bybit authorities into signing an exploit, they could have rewritten the code and begun draining funds. Security firm Cyvers told BeInCrypto that Bybit signers had malware on their endpoints, which acted like a man-in-the-middle attack, connecting their hardware wallet to sign.

CZ, the former CEO of Binance, urged Bybit to halt all withdrawals, but this did not happen. Zhou assured users that the exchange has enough funds to remain solvent, and Arkham Intelligence identified a transfer proving at least $500 million in reserves.

Pi Network, which launched its mainnet yesterday with the biggest airdrop in crypto history, has seen a strange positive reaction to the Bybit hack. The token’s price surged nearly 10%, despite Ben Zhou’s firm denunciation of it as a scam yesterday. Bybit has been consistently reluctant to list the token.

In a livestream, Zhou discussed some of Bybit’s next steps after the hack. He claimed that withdrawals are still open, but traffic is 100x higher than usual, so users may not be able to access services smoothly. The firm will not try to buy back lost assets immediately, relying on bridge loans, but remains adamant that it can keep its users whole.