Crypto Heist Fallout: Bybit’s Desperate Dash for Redemption

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Crypto Heist Fallout: Bybit’s Desperate Dash for Redemption

Crypto Heist Fallout: Bybit’s Desperate Dash for Redemption

Bybit, the beleaguered crypto exchange, has finally restored its Ethereum (ETH) reserves, marking a significant milestone in its recovery from one of the largest heists in crypto history. But has it been enough to save the day? 🤔

The announcement, made by Bybit CEO Ben Zhou on February 24, comes just days after the exchange suffered a $1.5 billion hack allegedly perpetrated by North Korea’s Lazarus Group. One can only imagine the sleepless nights and frantic phone calls that followed. 😴

Bybit Restores ETH Holdings

The attack targeted Bybit’s multisig cold wallet system. The hackers exploited a vulnerability to siphon 401,346 ETH—valued at approximately $1.13 billion—from the exchange’s hot wallet. Talk about a bad day at the office! 😳

Within 24 hours of the breach, Bybit’s total reserves plummeted by $5.2 billion, raising concerns about the platform’s stability. But, as they say, when life gives you lemons, make lemonade. Or in this case, when life hacks your exchange, secure emergency funding and bolster your reserves! 💸

Now, Zhou has confirmed that Bybit has restored its ETH reserves to a full 1:1 backing of client assets. Crisis averted, or so it seems. 🙏

“Bybit has already fully closed the ETH gap,” he said.

He added that an audited Proof-of-Reserves (POR) report will be released soon. The forthcoming POR report will utilize a Merkle tree structure, providing transparent proof that Bybit maintains 100% reserve backing for client assets. Because, you know, trust is everything in the world of crypto! 🤝

According to data from Lookonchain, Bybit received approximately 446,870 ETH ($1.23 billion) through a combination of loans, whale deposits, and direct ETH purchases. It’s like a crypto version of a bake sale, but with way more ETH! 🍰

Among the key contributors, possible over-the-counter (OTC) deals accounted for 180,269 ETH, while purchases from centralized and decentralized exchanges added another 109,033 ETH. Loans from unidentified whales or institutions contributed 47,800 ETH, alongside transfers from two unknown sources—one sending 20,000 ETH and another moving 8,000 stETH. It’s like a crypto game of musical chairs, but with way more ETH! 🎶

Several industry players also stepped in to support Bybit’s recovery. Bitget provided a loan of 40,000 ETH, and MEXC lent 12,653 stETH. DWF Labs also contributed 2,200 ETH. It’s like a crypto version of a charity event, but with way more ETH! 🎉

Additional contributions came from Mirana Ventures and possible input from Fenbushi Capital, each supplying 10,000 ETH. Bybit also received 4,416 ETH withdrawn from other centralized exchanges. Lastly, an individual entity’s 2,499 ETH was added to the total inflows. It’s like a crypto version of a potluck dinner, but with way more ETH! 🍴

Jeff Park, Head of Alpha Strategies at Bitwise, praised Bybit’s rapid recovery, which is in sharp contrast to the collapse of FTX in 2022. “Bybit succeeded where FTX didn’t because the crypto cooperative is stronger for decentralized regulatory capture than the centralized regulatory capture,” Park stated. Because, you know, decentralization is the answer to all of crypto’s problems! 🤓

“The reason is simple: the borderless crypto cooperative is retail, and non-Americans account for 95.8% of the world population,” he added.

In addition to its reserve restoration, Bybit has launched a bounty program, offering up to 10% of any retrieved assets as a reward. Should the full $1.13 billion be recovered, participants could collectively earn as much as $140 million. It’s like a crypto version of a treasure hunt, but with way more ETH! 🏴‍☠️

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2025-02-24 10:45