The Bybit hacking incident that occurred this morning has already caused a major stir, and there are conflicting stories about the security breach. The exchange is experiencing extreme liquidity demand for withdrawals, and the Pie Network is surging by almost 10%.
Due to high demand, users are having difficulty withdrawing funds, but CEO Ben Zhou has assured that withdrawals will remain open.
Bybit Hacking, Coin Chaos
Bybit is one of the world's major cryptocurrency exchanges, and it is currently in a state of turmoil. This morning, it suffered a $1.5 billion hack, which is already being called "the largest security breach in cryptocurrency history".
The entire community is in a state of confusion, and it seems that no one has yet grasped the full situation. However, Safe.eth, the multi-sig wallet managing Bybit's Ethereum cold wallet, has denied any breach on their side.
"The Safe security team is working closely with Bybit in ongoing investigations. No evidence has been found that the official Safe frontend has been compromised. However, out of an abundance of caution, Safe {Wallet} is temporarily suspending certain functionalities. User security is the top priority, and more updates will be provided soon," the company claimed.
Essentially, Safe uses a smart contract-based wallet system to manage the Ethereum cold storage. If the frontend was not compromised, it would mean that authorized Bybit users had to sign off on the mechanism that enabled the hack.
If the attackers managed to trick Bybit authorities into signing the exploit, they could have rewritten the code and started draining the funds.
"The Bybit signers had malware on their endpoints. They were trying to initiate legitimate transactions, but the malware was acting like a man-in-the-middle attack, and they were connecting their hardware wallets to sign," security firm Cyvers told BeInCrypto.
The confusion has been exacerbated by the possibility that Bybit employees were the weak link in this hack. Binance's former CEO CZ urged Bybit to suspend all withdrawals, but this did not materialize.
Zhou has assured users that the exchange has sufficient funds to maintain its payment capacity, and Arkham Intelligence has confirmed a transfer proving at least $500 million in reserves. Zhou claims he will take out loans to fulfill all withdrawal requests.
"This is not an easy situation to handle. I would suggest temporarily suspending all withdrawals as a standard security precaution. I'm happy to provide any support needed," CZ wrote on X (formerly Twitter).
Pie Network Turns Bullish After Bybit Incident
While there is no concrete evidence, some in the cryptocurrency community believe that enthusiastic Pie Network supporters are somehow responsible in some way.
Pie Network's mainnet launched yesterday with what is being called the largest airdrop in cryptocurrency history. Several exchanges listed the token on the first day, but Ben Zhou firmly denounced it as a scam yesterday. Bybit has consistently been reluctant to list the token.
As a result, there has been a strange positive reaction in the PI market following the Bybit hack. The token price has surged by almost 10%.
In summary, everything is in a state of chaos. In a recent live stream, Zhou discussed Bybit's next steps after the hack. He stated that withdrawals are still open, but traffic is 100 times higher than normal, so users may not be able to use the service smoothly.
"We experienced massive withdrawals after the $1.4 billion Ethereum hack. Even if we're going through a bank run, it's not a problem. We have enough tokens to give to our customers," Zhou said.
The company will not immediately buy back the lost assets and will rely on bridge loans, but it is confident it can fully retain its users.
