Bybit Scrambles After Record $1.5B Crypto Hack Linked to Lazarus Group

Bybit, one of the largest cryptocurrency exchanges, has become the victim of a devastating hack, losing an estimated $1.5 billion in digital assets.

This breach is now regarded as one of the largest in the history of the crypto industry.

According to FinancialTimes, the stolen funds, mainly consisting of ether, were taken from Bybit's cold wallet, which is an offline storage system designed to offer heightened security for digital assets.

The stolen assets were quickly moved across multiple wallets and converted into other currencies through various platforms.

Despite this, Bybit's CEO, Ben Zhou, reassured users on social media, stating, "Please rest assured that all other cold wallets are secure. All withdrawals are NORMAL."

This message was part of Bybit's effort to calm user concerns amidst fears of potential insolvency.

Blockchain analysis companies, including Elliptic and Arkham Intelligence, were quick to trace the stolen funds.

They identified that the stolen crypto had been moved to several accounts and swiftly liquidated.

According to Elliptic, this hack far exceeds previous incidents, such as the $611 million stolen from Poly Network in 2021 and the $570 million taken from Binance in 2022.

North Korea's Lazarus Group Linked to Bybit's $1.5B Crypto Breach

Elliptic's analysis later connected the hack to North Korea's Lazarus Group, a notorious state-sponsored hacking collective known for targeting the cryptocurrency sector.

This group has a history of stealing funds from crypto exchanges to finance North Korea's regime, often utilizing complex laundering techniques to cover their tracks.

"We've labelled the thief's addresses in our software, to help to prevent these funds from being cashed-out through any other exchanges," said Tom Robinson, Chief Scientist at Elliptic.

The Lazarus Group's activities in the crypto space date back to 2017 when they stole $200 million worth of bitcoin from four South Korean exchanges, CNBC said.

The group's involvement in this latest breach has raised concerns about the ongoing risks faced by the cryptocurrency industry.

The immediate aftermath of the hack saw a wave of withdrawals from Bybit, as users feared the platform might collapse.

However, Zhou assured the public that these outflows had stabilized. To further reassure customers, Bybit secured a bridge loan from undisclosed partners to cover any potential unrecoverable losses and ensure the continued operation of the exchange.

The hack has sent shockwaves through the cryptocurrency industry, which has recently been experiencing a resurgence. This breach comes at a time when many industry experts had hoped for a more crypto-friendly stance from the US government.

Large-scale thefts have plagued the crypto industry since its early years, with notable incidents such as the 2011 Mt.

Gox hack, which saw $470 million in bitcoin stolen, and the 2022 Binance hack. Despite improvements in security, these ongoing breaches highlight the persistent vulnerabilities in the crypto ecosystem.

Originally published on vcpost.com