Bybit has suffered a significant security breach, resulting in a $1.4 billion loss in ETH from its multi-signature cold wallet. The attack was executed via a malicious contract, which exploited backdoor functions “sweepETH” and “sweepERC20” to drain funds.
Within an hour of the hack, the exchange experienced a net outflow of $700 million as users reacted to the incident.
Ben Zhou, Bybit’s founder, confirmed the breach and assured users that the exchange remains solvent. Despite the massive loss, he pledged 1:1 asset backing for client funds, emphasizing that only the ETH cold wallet was compromised while other wallets remained secure. Bybit is actively working with blockchain forensic experts to track the stolen funds and maintain transparency through regular updates.
The hack has significantly impacted the broader crypto market, triggering a decline in major asset prices. Bitcoin plunged to $97,000, while Ether dropped below $2,700. XRP and Stellar (XLM) also faced declines of over 4%, contributing to a 0.80% drop in the total cryptocurrency market cap to $3.2 trillion. The incident underscores ongoing security challenges in the crypto space, raising concerns about exchange vulnerabilities and prompting investors to reassess risk exposure.
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