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In one of the largest cryptocurrency-related thefts in history, exchange operator Bybit disclosed over the weekend that it lost US$1.5 billion worth of ether, which comes as industry enthusiasm over recent developments starts to wane.
Bybit, one of the world’s largest crypto exchanges, said over the weekend that hackers gained control of its ether cold wallet in a “sophisticated attack” that manipulated one of its routine transfers.
The size of the loss shocked the industry and led to a sell-off of bitcoin and ether, the world’s two largest crypto tokens, with the price of bitcoin dropping 3 per cent and ether plunging 7 per cent in the hours following the exchange’s disclosure on Friday evening, according to Kaiko Research.
Blockchain research firms concluded that the culprit was North Korean hackers, who in a single day nearly doubled the amount they stole last year, according to TRM Labs.
The damage so far has not been widespread in the industry, as client funds were not affected in the incident, according to Bybit. The company has repeatedly guaranteed that it has “more than enough” assets to cover the loss.
Bybit co-founder and CEO Ben Zhou wrote in a post on X on Saturday that a backlog of withdrawals had been processed 12 hours after the “worst hack in history”.
“Our [withdrawal] system is now fully back to normal pace, you can withdraw any amount and experience no delays,” he said. “Thanks for your patience and we are sorry that this has happened.”
Trading activities have also returned to levels before the incident, after an initial spike in volumes as investors closed their positions or reallocated their assets, Bybit said on Sunday.
Still, a crypto sell-off extended on Tuesday, with bitcoin dropping to around US$89,300, nearly 15 per cent lower a month ago. Ether has fallen about 27 per cent over the past month.
In January, the re-election of US President Donald Trump, who pledged to make the US the world’s “crypto capital”, sent bitcoin to a record high of more than US$109,000.
Bybit, founded in 2018 with a focus on derivative products, is among world’s largest crypto exchanges that were established by mainland Chinese teams but later exited the market amid Beijing’s crackdown on the industry.
Over the past couple of years, Bybit has moved quickly to fill the void left by the collapse of FTX. The number of registered users on Bybit tripled from 20 million in 2023 to nearly 60 million last year, the company said in December.
