On the night of Feb. 21, a massive hack at the cryptocurrency exchange Bybit resulted in the theft of $1.5 billion in cryptocurrencies, the largest such heist in the industry’s history. The hackers exploited a flaw in Bybit’s security, which relied on an outdated free software product called Safe. The breach raised concerns about the safety protocols in the crypto industry, particularly at exchanges handling billions in customer deposits.
The hack caused crypto markets to plummet, prompting calls for stronger regulations in the industry. Bybit’s CEO, Ben Zhou, acknowledged that the company had known about issues with Safe months before the hack and mentioned plans to upgrade their security systems. Safe defended its products, saying they were used by some of the largest organizations in the crypto space.
Bybit, which operates as a crypto marketplace, is the world’s second-largest crypto exchange and processes billions of dollars in transactions daily. Following the hack, Mr. Zhou worked to reassure customers and stabilize the company, borrowing from other firms and drawing on corporate reserves to meet withdrawal requests. Despite losing nearly $10 billion in digital currencies due to mass withdrawals, Bybit continued to operate and processed all withdrawals within 12 hours of the hack.
The investigation revealed that the North Korean-backed hacker group Lazarus was responsible for the breach. Industry experts criticized Bybit for using outdated security systems and urged exchanges to enhance their defenses. Mr. Zhou admitted to regretting not taking action sooner to strengthen Bybit’s security protocols. Despite the challenges, Bybit resumed operations and assured customers that their funds were secure. The hack serves as a cautionary tale for the crypto industry, emphasizing the need for robust security measures to protect against future attacks.
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