Bybit Hack Leaves Crypto in Chaos as Pi Network Surges Nearly 10%

The Bybit hack from this morning is already seeing a massive fallout, with conflicting narratives surrounding the security breach.

Crypto exchange Bybit suffered a $1.5 billion hack on Monday, making it one of the largest security breaches in crypto history.

The exchange is now experiencing a high demand for withdrawals, leading to difficulties for users. However, CEO Ben Zhou has assured that withdrawals will remain open.

Bybit Hack: Latest Updates

The crypto community is still reeling from the news of a massive hack on Bybit, one of the world’s leading crypto exchanges. According to the latest reports, the exchange suffered a loss of $1.5 billion in a security breach, making it one of the largest hacks in crypto history.

The exchange quickly announced that it had detected the breach and was taking steps to contain the situation. However, Safe.eth, the multisig wallet that manages Bybit’s Ethereum cold wallet, has denied any breach on their end.

In a statement to BeInCrypto, Safe.eth said, “Safe’s security team is working closely with Bybit on an ongoing investigation. We have not found evidence that the official Safe frontend was compromised. However, out of caution, Safe {Wallet} is temporarily pausing certain functionalities. User security is our top priority, and we’ll provide more updates soon.”

Essentially, Safe uses a smart contract-based wallet system to manage its Ethereum cold storage. If its front-end wasn’t compromised, this could mean that authorized Bybit users had to sign off on a mechanism to enable the hack.

According to security firm Cyvers, in a statement to BeInCrypto, the attackers may have used malware to intercept transactions and alter the code.

“Bybit signers had malware on their endpoints. They were trying to initiate legit transactions, but the malware was acting like a man-in-the-middle attack, they were connecting their hardware wallet to sign.”

If this is the case, it would add another layer of complexity to the hack and could raise questions about the exchange’s internal security protocols.

Binance’s former CEO CZ took to X (formerly Twitter) to offer assistance and suggest halting withdrawals as a standard security measure. However, Bybit did not take this step.

“Not an easy situation to deal with. Might suggest to halt all withdrawals for a bit as a standard security precaution. Will provide any assistance if needed. Good luck.”

Meanwhile, Arkham Intelligence has identified a transfer of 40,000 ETH from Bybit to FTX, which could indicate a loan or a transfer of a portion of the exchange’s reserves.

This transfer comes after Zhou assured users that Bybit has sufficient funds to remain solvent following the hack. He also mentioned that the exchange might take out loans to ensure that all withdrawal requests are fulfilled.

With over $1.4 billion in ETH being withdrawn from Bybit following the hack, the exchange is experiencing a bank run. However, according to Zhou, in a livestream, this is not an issue as Bybit has enough tokens to give to clients.

“We’ve experienced massive withdrawals since the $1.4 billion ETH hack. Even if we are experiencing a bank run, it’s not an issue. We have enough tokens to give to the clients”

The firm will not attempt to buy back lost assets immediately, relying on bridge loans, but remains confident in its ability to keep its users whole.