Crypto Giant Bybit Loses $1.5B in Massive Security Breach

Bybit, one of the world's largest cryptocurrency exchanges, suffered a significant security breach on Friday, resulting in the unauthorized withdrawal of over $1.5 billion in liquid-staked Ether (ETH) and MegaETH (mETH). The hack triggered panic within the crypto community and caused ETH prices to drop by more than 4%.

Bybit's CEO, Ben Zhou, was the first to flag the breach, confirming that the attack had compromised the platform's multi-signature ETH cold wallet. Although the transaction initially appeared legitimate, it was actually a cleverly masked exploit that altered the smart contract logic, allowing the attacker to take control of the wallet and siphon its contents.

Despite the substantial loss, Zhou reassured users that all other cold wallets remained secure and that withdrawals continued without disruption. The exchange has mobilized its security team and blockchain forensic experts to investigate the attack and recover the stolen funds. As the investigation unfolds, Bybit has enlisted blockchain security experts to track the stolen funds, which are being distributed across multiple new addresses in an attempt to obscure their movements.

The attack was executed through a highly sophisticated method known as "masked transactions." According to Bybit's official statements, the malicious actors manipulated the UI of the transaction approval process, leading the exchange's transaction signers to believe they were approving a routine transfer from the ETH cold wallet to the platform's warm wallet. However, the underlying signing message was altered to change the smart contract logic of the cold wallet, granting the attacker full control over its funds.

Bybit assured users that its other cold wallets remained secure and that withdrawals continued without disruption. The exchange also implemented additional security monitoring and forensic investigations to recover the stolen funds. Security experts have urged the crypto community to blacklist addresses linked to the hack and avoid interacting with them. Bybit has quickly implemented additional monitoring measures and is working to enhance its security protocols to prevent further incidents. Scheduled maintenance has been announced for its live server, extending into the following day.

Ben Zhou reassured users that Bybit remains financially stable, stating that all client assets are backed 1-to-1. While the full extent of the damage is still under investigation, security experts continue to analyze the breach. Initially, the crypto community reacted with panic before further clarifications were provided. Bybit users are advised to remain cautious and monitor official updates. Security professionals are now evaluating By