Bybit Maintains Reserves Exceeding Liabilities Despite $1.4 Billion Hack

Cryptocurrency exchange Bybit has confirmed that it still holds reserves exceeding its liabilities, despite suffering a $1.4 billion hack and a $5.3 billion drop in total assets. According to DefiLlama data, the February 21 hack became the largest crypto theft in history, with attackers stealing $1.4 billion in liquid-staked Ether, Mantle Staked ETH (mETH), and other ERC-20 tokens.

Following the incident, Bybit’s total asset value fell by over $5.3 billion, but independent Proof-of-Reserve (PoR) auditor Hacken has confirmed that Bybit’s reserves continue to surpass its liabilities, ensuring full coverage of user funds.

Bybit CEO Ben Zhou stated on February 22 that the exchange processed over 350,000 withdrawal requests within 10 hours, successfully completing 99.9% of them. In response to the hack, crypto industry leaders sent emergency transfers, including 50,000 Ether from Binance, 40,000 Ether from Bitget, and 10,000 Ether from Du Jun, co-founder of HTX Group.

The Bybit hack accounts for more than half of the $2.3 billion stolen in crypto-related hacks in 2024. Analysts believe the attack was carried out by the Lazarus Group, which has also been linked to the Ronin network hack.

Bybit’s Ether cold wallet was compromised through a deceptive transaction, allowing the hacker to take control and transfer all Ether to an unknown address. This incident highlights that even centralized exchanges remain vulnerable to sophisticated cyberattacks.

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Lazarus Group’s Link Between the Bybit and Phemex Hacks Uncovered

The North Korean cybercrime organization, Lazarus Group, is suspected to be behind both the $1.4 billion Bybit hack and the $29 million Phemex hack, according to the latest onchain evidence.

The February 21st Bybit exchange hack led to the largest crypto theft in history, with attackers stealing $1.4 billion worth of liquid-staked Ether, Mantle Staked ETH (mETH), and other ERC-20 tokens.

Blockchain security analysts, including Arkham Intelligence and onchain researcher ZachXBT, have traced the attack to Lazarus Group.

New onchain findings revealed that the same Lazarus Group-affiliated wallets were also behind the $29 million Phemex hack in January.

Lazarus Group Uses Crypto Mixers to Combine Funds from Bybit and Phemex Hacks

In a February 22nd X post, ZachXBT wrote, “Lazarus Group directly linked the Bybit hack to the Phemex hack by commingling funds from both incidents’ initial stolen addresses.”

According to onchain data, $29 million worth of digital assets was drained from Phemex’s hot wallets through over 125 transactions recorded across 11 blockchain networks. The attackers then used crypto mixers like Tornado Cash to convert the funds into Ether, making them harder to trace.

The Bybit hack alone accounted for more than half of the $2.3 billion stolen in crypto-related hacks in 2024, marking a significant setback for the industry.

Cyvers’ Meir Dolev noted the similarities between this attack and the $230 million WazirX hack and the $58 million Radiant Capital hack. Dolev explained that Bybit’s Ethereum multisig cold wallet was compromised through a deceptive transaction that tricked signers into unknowingly approving a malicious smart contract logic change.

“It seems that Bybit’s ETH multisig cold wallet was compromised through a deceptive transaction that tricked signers into unknowingly approving a malicious smart contract logic change,” he said.

Lazarus Group Steals $1.34 Billion Worth of Crypto in 2024

Lazarus Group is known for being behind some of the largest crypto heists. The group is the main suspect in the infamous $600 million Ronin Network hack and the $230 million WazirX exchange hack.

Throughout 2024, North Korean hackers stole $1.34 billion worth of digital assets across 47 incidents. This represents a 102% increase from the $660 million stolen in 2023, accounting for 61% of all crypto stolen in 2024.

The United States, Japan, and South Korea issued a joint warning on January 14th, citing the growing threat of North Korean hackers targeting the crypto industry.

Over the past year, North Korean hackers were also responsible for the $305 million DMM Bitcoin hack, the $50 million Upbit hack, the $50 million Radiant Capital hack, and the $16 million Rain Management hack.

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