- Bybit was subjected to a sophisticated attack on Friday
- As a result, 401K ETH, or ~$1.12B was stolen
- Arkham Intelligence speculates that Lazarus Group is behind it
- Bybit launched a recovery bounty program on Saturday
- Bybit also states that the assets are 1 to 1 backed, they can cover the loss
This Friday, a major security incident occurred with one of the largest crypto platforms Bybit, more specifically a sophisticated attack that allegedly resulted in Lazarus Group leading to 401K ETH or ~$1.12B loss.
Bybit hurries to calm down users that the attack did not affect withdrawals and other wallets, while assets are 1 to 1 backed, and platform can cover the loss.
Also, Bybit launched a bounty program on Saturday and offered a reward of up to 10% of the amount recovered, and the investigation is ongoing.
Details on Bybit Security Incident
So, the security incident happened this Friday, as confirmed by Bybit X.
Also, a little later Bybit CEO Ben Zhou held a live stream where he gave details on how the incident happened. Among the key points, Bybit performed the standard procedure of transferring assets from cold to hot wallets, which they do every three weeks. The initial transaction was 30K ETH, but as a result, the hackers were able to withdraw 401K ETH worth ~$1.14B.
It may be a fair question how this could have even happened given Bybit’s strong security measures, which you can read more about in the review. However, the more technically secure systems are, the more often hackers exploit their most vulnerable part – humans.
Exactly how this happened is still under investigation, but there is a possibility that the problem was the following. Confirmation of a transaction is required by 3 people, one of which is Ben Zhou, and it is done through Safe, a multi-sig service. The hacker probably tampered with the original interface that was used to sign transactions and replaced the transaction with his own with the needed parameters.
ZachXBT was the first to be one of the first to document the incident.
And also contributed a lot to finding out the details of the incident by analyzing on-chain data and linking it to the Lazarus Group.
Meanwhile, Arkham Intelligence has already shared proof from ZachXBT that the attack was carried out by the notorious Lazarus Group.
And even a little later, Arkham Intelligence shared more details about the stolen assets.
However, Bybit responded quickly and did everything possible to prevent users from panicking. First of all, Ben Zhou reassured that the incident only affected individual wallets, all the assets are 1 to 1 backed, and they also have reserve funds to cover the loss.
Bybit has already approached partners and the community to get support and not to spend reserves, which could affect the whole market and would be an unwanted additional effect. Also, Bybit has already approached law enforcement agencies and will have the support and assistance of other CEX in freezing stolen assets if they appear on their platforms.
Additionally, Bybit has launched a generous recovery bounty program for “ethical cyber and network security experts who play an active role in retrieving the stolen cryptocurrencies.”
From the latest updates, we know that the investigation is ongoing, and also deposits & withdrawals on Bybit have fully recovered to normal levels, as confirmed by on-chain data.
Conclusion
This record-breaking security incident is the largest in the history of the crypto industry, overlapping stories such as MT.GOX, and others.
And it provides a very important lesson that any system can be hacked, or bypassed. Modern systems are pretty hard to hack, especially when we’re talking about big players like Bybit. So hackers are increasingly trying to get around this, to mislead the people behind these systems.
Therefore, every user of the crypto industry needs to remember that even the initial security of blockchain technology, as well as secure cold wallets, will not protect you if you are not careful and do not check information thoroughly.
Be aware and stay tuned for updates on the rapidly developing blockchain and crypto landscape.
The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. Any actions you take based on the information provided are solely at your own risk. We are not responsible for any financial losses, damages, or consequences resulting from your use of this content. Always conduct your own research and consult a qualified financial advisor before making any investment decisions. Read more
