Bybit Confirms $1.5 Billion Theft in Massive Cold Wallet Breach

• Bybit confirmed a $1.5 billion breach of its Ethereum cold wallet, causing significant loss in cryptocurrency.
• Hackers deceived Bybit’s multi-signature system by disguising their transactions, allowing fund theft.
• The Ethereum cold wallet suffered as the sole compromised storage yet all other funds along with withdrawals remained unaffected.

Bybit announced a major security incident that targeted its multi-signature cold wallet system among the leading cryptocurrency exchanges. The hack occurred just hours after Bybit announced new transparency measures for liquidation data access. This attack led to cryptocurrency thieves making off with almost $1.5 billion.

Ethereum Cold Wallet Compromised

Bybit discovered the Ethereum cold wallet breach when on-chain investigator ZachXBT detected it. The exchange realized an attack after finding unusual transactions from their wallet which resulted from cyber hackers breaking into their security system. The compromise of Ether and Ether derivatives by the attackers became official when Bybit CEO Ben Zhou released this information.

Bybit uses multi-signature wallets to prevent a single point of failure, where multiple parties are required to approve transactions. In this case, however, the hackers managed to deceive all the wallet’s signers. They disguised their transactions to make them appear legitimate, allowing the signers to unknowingly authorize the transfer of funds.

By taking advantage of this security vulnerability the hackers obtained wallet access followed by transferring the assets to an unidentified wallet address.

Funds Moved Through Decentralized Exchanges

To conceal the stolen assets the hackers exchanged the funds through decentralized exchanges which allowed them to obtain Ethereum tokens. ZachXBT the blockchain investigator observed how the attackers dispersing the stolen funds across different wallet addresses complicated asset tracking. A public information release provided an inventory of affected addresses for which exchanges ought to perform blacklisting operations.

Zhou informed users that the Ethereum cold wallet problems were unique to that particular system after the security breach. Zhou confirmed that other cold wallets maintain their security status while platform withdrawals operate normally. Bybit conducts ongoing investigations of the attack while cooperating with relevant authorities to monitor the stolen asset tracking.

The hack stands as the largest incident in cryptocurrency exchange history where the total $1.46 billion loss surged beyond 50% of all stolen funds from exchanges during 2024. The network breach created doubts about the strongest forms of crypto security while exchanges remain exposed to complicated hacking attempts.

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