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Could the Bybit crypto been avoided? (Photo Illustration by Omar Marques/SOPA Images/LightRocket ... [+] via Getty Images)
SOPA Images/LightRocket via Getty Images
Bybit’s recent security breach has sent shockwaves through the crypto industry, exposing vulnerabilities in multi-sig cold storage solutions and emphasizing the need for more sophisticated security measures. Experts from Ledger CEO Pascal Gauthier, Fireblocks, and Binance co-founder Changpeng Zhao (CZ) have provided crucial insights into how this could potentially have been prevented and what steps exchanges must take to secure digital assets.
At the same time, Bybit’s CEO, Ben Zhou, acted swiftly in response, halting withdrawals, conducting a thorough investigation, and working with security experts to contain the damage. His decisive crisis management helped prevent further losses and demonstrated how exchanges should respond in the face of such attacks.
Ben Zhou, CEO of Bybit
Understanding the Bybit Exploit
Bybit’s breach, resulting in over $1.4 billion in losses, was attributed to a sophisticated exploit manipulating call data and swapping Safe’s implementation for a back doored version. CZ pointed out that North Korea’s Lazarus Group, responsible for several major exchange hacks, executed the attack by manipulating the front-end interface to display a legitimate transaction while signing a different, malicious transaction behind the scenes.
This incident highlights a growing trend in crypto hacks—targeting multi-sig cold storage solutions through increasingly sophisticated means. CZ warned that affected exchanges, including WazirX and Phemex, all had different multi-sig solution providers, demonstrating that these attacks are not provider-specific but rather a systemic issue.
