Binance Surges as Bybit Users Flee After $1.5B Hack

Coin WorldWednesday, Mar 5, 2025 2:58 pm ET
1min read

Binance, the world's largest cryptocurrency exchange, has witnessed a significant surge in net inflows following the historic hack of its competitor, Bybit. This shift in user confidence is evident in the exchange's performance, with over $3.9 billion in net inflows recorded within a week after the hack, significantly outperforming its monthly averages.

The Bybit hack, which occurred on February 21, marked a turning point for the cryptocurrency market. The cybersecurity breach, orchestrated by the notorious North Korean Lazarus Group, resulted in the largest theft in history, totaling $1.5 billion. While Bybit faced a monumental setback, Binance capitalized on the situation, attracting a wave of new users and solidifying its position as the leading crypto exchange.

In the aftermath of the hack, Binance reported $3.9 billion in inflows, illustrating a significant shift in market confidence toward the leading crypto exchange. This influx of funds came as Bybit dealt with a crisis of confidence, with a staggering number of withdrawal requests from its users. Binance CEO Ben Zhou reported more than 350,000 withdrawal requests on the day of the hack, signifying a strong loss of customer trust in Bybit and a potential transition of its users seeking safer options.

February was a particularly strong month for Binance, closing with $5.32 billion in net inflows. However, a significant proportion of these funds flowed in immediately following the Bybit hack, emphasizing the drastic shift in user sentiment. The implications for the market are substantial; Bybit's users appear to be migrating towards Binance, which continues to assert its dominance in the competitive landscape.

Binance's proactive measures to comply with regulations have also played a role in cementing user trust. The exchange has taken significant steps recently, including the delisting of non-compliant assets such as Tether's USDT in Europe and resuming USD deposits in Binance.US after nearly two years of legal challenges. These actions are indicative of Binance's commitment to maintaining a compliant and secure trading environment.

The aftermath of the Bybit hack signals more than just a loss for one exchange; it illustrates the fluid dynamics of user trust in the cryptocurrency sector. While Bybit grapples with the fallout stemming from the breach, Binance's ascendance as the primary choice for many investors showcases a robust