Dubai: Crypto exchange Bybit loses $1.5 billion in industry's largest theft

Dubai-based cryptocurrency exchange Bybit lost $1.5 billion (approximately Dh5.51 billion) worth of digital assets as hackers carried out a "sophisticated attack". This marks the biggest such heist in the industry's history.

The situation has led to a "surge" in withdrawal requests, but they have not been halted, the company said.

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Calling it the "worst hack possibly in the history of any medians (banks, crypto, finance)", CEO and founder Ben Zhou said all Bybit functions remain functional. The withdrawal system is now fully back to normal, with people able to "withdraw any amount and experience no delays".

In the "sleepless" hours after the attack, the company said it borrowed Ethereum (ETH) to facilitate withdrawals.

Explaining what happened, the company said it detected "unauthorised activity" within an ETH cold wallet during a routine transfer process. Hackers manipulated the transaction, resulting in the loss of over 400,000 ETH. ETH is the second-largest cryptocurrency network by market value after Bitcoin.

Calling the theft an "isolated incident", Bybit said all other cold wallets and assets are secure and and client funds unaffected.

Apologising for the incident, Zhou said: "We want to reassure you that all other Bybit Cold Wallets are safe, and client funds are unaffected and remain secure."

At over $20 billion, the company said it has "more than enough assets" to cover the loss. It will use a bridge loan if necessary to ensure the availability of user funds, it added.

"Bybit is solvent even if this hack loss is not recovered, all ... clients assets are 1:1 backed, we can cover the loss," CEO Zhou posted on X.

The company is working with "leading blockchain forensic experts" to trace the stolen funds. "Our security team is investigating the root cause, with particular attention being given to a potential vulnerability in the user interface of the Safe.global platform, which may have been exploited during the transaction process."

The case has been reported to the "appropriate authorities". The company has taken actions to "mitigate and counter the ability" of the hackers in "disposing and dumping the ETH on the markets via legitimate marketplace, narrowing the available outlets of disposal".

Many industry partners worked through the night to help the company find solutions, it added. "One of the most brilliant tech experts dedicated hours to identifying the root cause and provided Bybit with the first investigation report. The depth and professionalism of this report are remarkable. He even took the first flight to Dubai on his own initiative to join our security team and assist in the ongoing investigation—purely out of commitment to the industry," the company posted on X.

Launched in 2018, Bybit has over 40 million users worldwide, making it the world's second-largest crypto exchange.

Sahim Salim

Staff Writer

• 

sahim@khaleejtimes.com

As Associate Editor, Sahim Salim helps tell the UAE story like no one else does — and leads a team of reporters that asks the questions to get news and headlines that matter.