ByBit Hit by Largest Centralized Exchange Hack in History

$1.5 Billion in ETH Stolen

ByBit, one of the world’s biggest crypto exchanges, has suffered the largest centralized exchange hack ever. Over $1.5 billion in Ethereum was stolen from the exchange’s cold storage multi-signature wallet. The attackers are believed to be the North Korean state-sponsored Lazarus Group, meaning the stolen crypto is likely gone for good.

ByBit is still investigating how the hack happened. Hackers managed to spoof its multisig signer, and when the transaction was sent to the third-party security firm Safe for verification, it displayed the correct information, allowing the funds to be released. Fortunately, all other crypto wallets, including Bitcoin, were unaffected.

Now, a bank run has begun, with customers rushing to withdraw funds from the exchange. As of today, over 4,000 withdrawals remain unconfirmed, while ByBit scrambles to move more money from cold storage to meet the demand. Like any exchange, ByBit operates with leverage—if everyone pulls their funds, it could collapse.

Personally, I would close trades and move my crypto off the exchange—why take the risk? This hack has triggered a major downturn in the crypto markets as traders exit positions and move funds into cold storage, reducing trading activity. However, I believe this is the final shakeout before a substantial move higher in the crypto markets.

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