- Bybit CEO speaks out about the incident
- Bybit's emergency solutions
- Controversial proposal to reverse Ethereum
- The cause of the hack remains a mystery
The leading Bit exchange Bybit has witnessed an outflow of over $5.5 Billion after becoming a victim of a nearly $1.5 Billion hack. The hacker group believed to be from North Korea's Lazarus Group has drained the exchange's Cold Storage containing ETH.
According to data from DeFiLlama, the total assets monitored in Bybit-linked wallets have decreased from around $16.9 Billion to $11.2 Billion at the current time. The exchange is now investigating the cause of the incident.
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Bybit CEO speaks out about the incident
In an X Spaces conversation, CEO Ben Zhou said that immediately after the incident, he mobilized the entire team to serve customers, process withdrawal requests, and answer questions.
Zhou revealed that around 70% of customers' ETH has been stolen by the hackers, forcing Bybit to quickly seek a loan to maintain liquidity. However, he noted that the asset type withdrawn the most was not ETH, but stablecoin.
Although Bybit has sufficient reserves to meet withdrawal demands, the situation became tense when Safe - the smart contract wallet platform used by Bybit - temporarily disabled some functions to ensure safety.
According to Zhou, around $3 Billion USDT of Bybit is stuck in the Safe wallet, while the exchange is under constant withdrawal pressure. Within 2 hours of the hack, withdrawal requests exceeded $100 Million.
Bybit's emergency solutions
Faced with this situation, Bybit's security team had to contact Safe to find a way to release the trapped funds. Eventually, they developed new software based on Etherscan to manually verify transaction signatures and withdraw the stablecoins from the wallet.
The exchange's team had to work through the night to process the withdrawal orders. During this process, Bybit faced a "bank run" situation as around 50% of the assets in the exchange were withdrawn.
After the incident, Bybit has moved the majority of its assets out of the Safe Cold Storage and is seeking an alternative system.
Controversial proposal to reverse Ethereum
Bybit has contacted the authorities, including the Singapore police and Interpol. The exchange is also collaborating with blockchain analysis firms like Chainalysis to trace the stolen ETH.
A controversial idea proposed is to suggest reversing the Ethereum Blockchain to recover the stolen funds. CEO Zhou revealed that he has instructed his team to contact Vitalik Buterin and the Ethereum Foundation to seek a solution.
"I really appreciate the people who suggested this idea on Twitter. I'm not sure what the response from Ethereum will be, but we're willing to try anything to get the money back," Zhou said.
However, he acknowledged that rolling back Ethereum is not a simple task. It requires community consensus, and if implemented, could lead to a controversial hardfork, splitting the Ethereum network.
The cause of the hack remains a mystery
To date, the exact cause of the hack has not been determined. Zhou affirmed that the devices of the Bybit team were not compromised, and the previous transactions all appeared to be legitimate.
"We know the cause is definitely related to the Safe Cold Storage, but whether the issue is with our devices or from Safe's side is still unclear," Zhou concluded.
Compiled by VIC Crypto
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