Bybit Hack: How $1.4 Billion in Crypto Was Stolen in a Sophisticated Cyberattack
On February 21, 2025, cryptocurrency exchange Bybit experienced a significant security breach resulting in the theft of over $1.4 billion in digital assets. The incident involved the compromise of one of Bybit’s Ethereum (ETH) cold wallets, leading to the unauthorized transfer of funds to an unidentified address.
Details of the Breach
The breach was first identified by on-chain security analyst ZachXBT, who observed suspicious outflows totaling approximately $1.46 billion from Bybit’s wallets. The stolen assets included 401,347 ETH (approximately $1.12 billion), 90,376 stETH ($253 million), 15,000 cmETH ($44 million), and 8,000 mETH ($23 million).
Bybit’s co-founder and CEO, Ben Zhou, confirmed the incident, explaining that the attackers employed a sophisticated technique involving a “masked” transaction. This method deceived the exchange’s multisignature wallet signers by displaying a legitimate-looking user interface, while the underlying transaction contained malicious code that altered the smart contract logic. As a result, the attackers gained control of the affected ETH cold wallet and transferred its holdings to an unknown address.
Immediate Response and Assurance
In an immediate response to the breach, Bybit’s security team, in collaboration with external blockchain forensic experts, has initiated a thorough investigation to trace the stolen funds and identify the perpetrators. CEO Ben Zhou reassured users that all other cold wallets remain secure and that withdrawals are proceeding as normal. He emphasized that client funds are safe and that the exchange’s operations continue without disruption. Thankfully, and in contrast to past CEX hacks, Zhou also stated that Bybit is solvent and capable of covering the loss, ensuring that all client assets are backed on a 1:1 basis.
Impact on the Cryptocurrency Market
The news of the hack had immediate repercussions on the broader cryptocurrency market. Following reports of the security breach, major cryptocurrencies experienced a downturn. Bitcoin (BTC) prices fell to near $97,000, while Ether (ETH) slipped nearly 4%, dipping below $2,700. The sudden decline led to the liquidation of approximately $100 million worth of leveraged derivatives trading positions, predominantly those anticipating price increases.
Industry Context
This incident marks one of the largest cryptocurrency hacks to date, surpassing previous high-profile breaches such as the $620 million Ronin Network exploit in March 2022. The Bybit hack highlights the ongoing challenges that cryptocurrency exchanges face in securing digital assets against increasingly sophisticated cyberattacks. It also shows the critical importance of robust security measures and continuous vigilance in the rapidly evolving crypto landscape.
As the investigation continues, Bybit has called upon the broader crypto community and security experts to assist in tracking the stolen funds and bringing the perpetrators to justice. The exchange’s proactive stance aims to reinforce trust and transparency with its user base during this challenging period. This story is currently developing and Bybit is giving regular updates via their X account.