Bybit, the renowned crypto exchange based in Singapore has suffered a significant hack as malicious actors made away with $1.4 billion.
In a confirmatory update by Ben Zhou, Bybit’s CEO on X, the attackers drained the funds from the exchange’s Ethereum (ETH) multi-signature cold wallet.
Sophisticated Attack Compromises Bybit’s Cold Wallet
According to Zhou, the hack was sophisticated as the attackers tricked signers of these cold wallets into approving a malicious transaction.
Notably, Bybit’s cold wallet, which stores crypto assets offline, is connected to the warm wallet, which is online.
The aim was to carry out an operational transaction, and the transfer initially appeared normal.
However, the team responsible for signing the transaction noticed a fake UI displaying a legitimate transfer address. Scrutiny revealed a hack had taken place.
The malicious actors manipulated the instruction, likely using a phishing method to deceive signers into approving their command on the wallet.
Hence, the funds were redirected even though they appeared legitimate.
When the hackers gained control of the cold wallet, they transferred all the Ethereum to an unknown address.
Meanwhile, ZachXBT, a prominent crypto investigator on X, revealed that preliminary analysis shows the Bybit attacker has 10,000 ETH in 39 addresses.
ZachXBT listed all 39 Ethereum Virtual Machine (EVM) addresses.
Furthermore, Arkham, another crypto intelligence analytics platform, says the stolen funds are being transferred to new addresses and sold.
So far, $200 million in stETH have been liquidated, sparking stakeholder concerns.
Arkham suggests that the attack might have involved a strategic security error on the part of Bybit.
This might have aided the malicious actors to compromise its cold wallet and steal the funds.
Bitcoin and Ethereum Prices Drop Amid Market Jitters
This development has impacted the broader cryptocurrency ecosystem.
Notably, Bitcoin (BTC), the world’s leading digital currency, was on an upward trajectory to breach the $100,000 price level.
The coin had hit a high of $99,497.97 in trading before the attack on Bybit.
However, as soon as the news filtered in, BTC’s price lost its gains.
As of this writing, BTC is changing hands at $98,643.46 in the crypto market.
Ethereum witnessed a similar decline, with prices dropping sharply from a high of $2,842.83 to $2,680.69.
Analysts say the news of the hack likely created panic among Ethereum investors, particularly those using the Bybit exchange.
ETH has recovered slightly, and altcoin is currently trading at $2,736.67.
The current development could momentarily dampen the enthusiasm of new investors in the crypto space.
They believe it could trigger volatility in the digital market space.
Crypto Exchange Hacks: A Persistent Threat
Historically, malicious attackers have been known to prowl the cryptocurrency world, seeking to dispossess unsuspecting users of their funds.
From the simple scam of 2011 on MyBitcoin, a wallet service platform where the scammers made away with users’ assets stored with them, malicious actors have become more daring.
These hackers have moved on to attack anyone and any exchange. Some notable hacks include the $25,000 BTC loss from Mt. Gox in 2011.
Last year, India’s largest crypto exchange, WazirX, lost $230 million in users’ funds.
Some hackers have also taken control of celebrities’ social media handles to defraud their followers of their crypto assets.
Experts say these developments highlight the need for constant security upgrades and vigilance to protect valuable assets.
