Bybit Stock Plummets 30% After Record 1.46 Billion USD Hack

On February 21, 2025, Bybit, the world's second-largest cryptocurrency exchange, suffered a historic hack resulting in the loss of 1.46 billion USD. The hackers, believed to be the Lazarus Group from North Korea, used malware to manipulate Bybit's transaction approval process, allowing funds to be transferred directly into their wallets. This incident marked the largest cryptocurrency theft to date, surpassing all previous hacking events in the financial sector.

The significant amount of funds stored in a single wallet created a critical vulnerability. Had Bybit implemented additional security measures such as multi-factor authentication, transaction monitoring, or distributing assets across multiple cold wallets, the breach might have been prevented. Despite the incident, Bybit has pledged to take responsibility and ensure that users are not affected.

Following the theft, hackers initiated a complex money laundering campaign. Initially, they converted the stolen tokens (such as stETH and mETH) into ETH through decentralized exchanges (DEXs) to avoid interference from token issuers. They then employed the "layering" technique, dispersing funds into hundreds of intermediary wallets with small amounts to complicate the tracing process.

Hackers also utilized cross-chain bridges to move funds between different blockchains, further complicating investigations. A portion of the funds was sent through mixing services like Tornado Cash, completely breaking the link between the sender and receiver. As of now, approximately 335 million USD has been laundered, while 900 million USD remains in the hands of the hackers.

Despite these efforts, blockchain analysis companies and law enforcement agencies are actively tracking the funds. Some exchanges have frozen assets linked to the hackers, but a significant portion of the money remains in circulation. The cat-and-mouse game between hackers and authorities continues.

The Bybit hack exemplifies how organizations under international sanctions, such as North Korea, Iran, and Russia, exploit cryptocurrencies to evade financial controls. They leverage the anonymity of blockchain, DEXs, and cross-chain bridges to move funds without relying on traditional banking systems.

Services that facilitate money laundering, exchanges without KYC (Know Your Customer) requirements, and peer-to-peer markets remain significant loopholes for criminal activities. This poses a substantial challenge for regulators who must balance preventing illicit activities while preserving the