Bybit CEO Assures Public That User Funds Are Safe After $1.4B Hack

Security veterans and concerned crypto community members rallied behind Bybit on Friday, Feb. 21, after the exchange lost over $1.4 billion to hackers.

Hackers made off with over $1.4 billion in cryptocurrency from Bybit on Friday, Feb.21, in the largest-ever crypto exchange hack.

The breach occurred as Bybit was attempting a routine transfer, Ben Zhou, Bybit CEO, said during a livestream following the incident. Specific details about the breach points remain scarce. However, initial reports suggest that hackers tricked Bybit’s signers into authorizing a malicious transaction from the platform’s Ethereum (ETH) cold wallet.

According to on-chain data shared by crypto sleuth ZachXBT, the stolen funds were moved in several transactions from Bybit to another wallet. The majority of the funds were ETH and stETH, with smaller amounts of cmETH and mETH.

Ben Zhou Bybit Ceo assures platform users that their funds are safe and that the exchange can fully cover the loss following a massive hack on Friday. (screenshot)

Bybit employs a multi-sig structure designed by Safe to manage its ERC-20 token reserves. This wallet requires multiple team members to sign off on transactions before execution.

OxCygaar, a blockchain developer and Abstract Chain contributor, theorized that bad actors attacked each signer and somehow used malware to alter the multi-sig UI. The ramifications of this scenario are ghastly, as it means the hackers may have individually identified each signer and compromised their computers or crypto wallets.

“I don't know how they knew the multisig signers, but this type of attack has happened in the past. It requires identifying each signer and then getting them to unknowingly install malware so their multisig UI is compromised,” OxCygaar wrote on Twitter.

Community backs Bybit, CEO sources bridge loan

ARKM tokens for any information leading to the hacker’s identification. Additionally, Safe, Bybit’s multi-sig provider, announced ongoing maintenance to strengthen safety.

Also, Zhou said Bybit was working with other industry players like Binance, OKX and KuCoin and law enforcement to reach a resolution. “We have filed a police report,” Zhou shared on the livestream.

Moreover, Zhou and Shunyet Jan, Bybit’s head of derivatives, revealed that the exchange is negotiating a bridge loan from partners to restore Ethereum withdrawals. According to Jan, the platform will offer collateral from its treasury, mainly in Bitcoin (BTC) and stablecoins. However, Zhou quickly noted that Bybit can fully cover the loss, considering that the exchange manages over $20 billion in assets.

Bybit’s leadership urged the crypto community to remain patient amid platform congestion, adding that other ERC-20 withdrawals and normal operations continue as usual.