Crypto Exchanges Rally Around Bybit After $1.5B ETH Hack

In a significant development, cryptocurrency exchanges have rallied around Bybit following a high-profile hack that resulted in the illicit withdrawal of approximately $1.5 billion worth of ETH. The incident, attributed to the Lazarus Group, has sparked a collective response from the crypto community, with exchanges stepping up to mitigate the damage and reassure the public.

The hack, which occurred on February 21, was swiftly acknowledged by Bybit as a sophisticated attack, rather than an internal security lapse. As the dust settled, other exchanges recognized the need to support Bybit and minimize the impact of the theft. Within 24 hours, exchanges and market makers had provided Bybit with over $400 million in ETH, enabling the platform to continue processing withdrawals.

The response from the crypto community stands in stark contrast to the collapse of FTX, where no such support was extended. Bybit's responsible management and clear asset attestation, despite the size of the hack, have earned it the trust and support of other exchanges. KuCoin, for instance, pledged to assist in monitoring fund movements and freezing suspicious assets, while emphasizing its robust risk controls and multi-layer protection.

The hack itself targeted a multisig wallet transfer process, with attackers exploiting a user interface spoofing vulnerability. Bybit's team was tricked into approving a transfer they believed was routine, allowing the hackers to redirect the assets to an address under their control. The funds were then peeled into 10,000 ETH chunks and sent to fresh wallets in preparation for mixing, with the ultimate goal of converting them into BTC for further obfuscation.

Bybit has emerged from the incident with its credibility intact, thanks to its prompt communication and transparency regarding the scope of the problem. As part of its ongoing investigation and recovery efforts, the exchange has promised to award 10% of recovered funds to ethical security experts who contribute to the process. Bybit has also expressed gratitude to the partners who provided funding, emphasizing the importance of their trust, quick action, and solidarity.