According to CEO Ben Zhou, the breach saw hackers drain approximately 70% of the exchange’s Ethereum holdings from their cold wallet
Beaver Bullet:
- On Friday, Dubai-based crypto exchange Bybit experienced a severe security breach, resulting in the theft of $1.5 billion USD worth of its Ethereum holdings. CEO Ben Zhou reassured clients that Bybit remains solvent and all assets are fully backed, even amid a surge of withdrawal requests.
Bybit Loses $1.5 Billion USD To Hackers
Ever wondered why Beaver never holds your Bitcoin for you? This is why.
Dubai-based crypto exchange Bybit suffered a massive security breach on Friday that resulted in the theft of over $1.5 billion USD worth of its Ethereum (ETH) holdings, marking it as the largest crypto heist in history.
According to CEO Ben Zhou, the breach saw hackers drain approximately 70% of the exchange’s Ethereum holdings from their cold wallet, sparking widespread concern about the security of centralized platforms, and sending shockwaves through the crypto market.
After Zhou and other blockchain experts confirmed the hack, Bybit underwent a classic “bank-run” style flurry of withdrawal requests from users desperate to keep their assets safe. Zhou, however, remained confident that his exchange could handle things, and refused to pause withdrawal requests as other endangered crypto custodians so often do.
“Bybit is solvent even if this hack loss is not recovered, all of clients’ assets are 1-to-1 backed, we can cover the loss.” said Zhou in a livestream shortly afterward. To bolster this claim, Zhou revealed that Bybit had secured a bridge loan covering 80% of the stolen ETH, though he did not disclose the partners involved.
Now, however, begins the nigh-impossible process of trying to recover funds from the criminals who stole them. Bybit has posted a $140 million bounty for experts who help them get their funds back – representing 10% of the lost assets.
According to blockchain security experts analyzing the hack, the parties controlling Bybit’s Ethereum wallet were compromised and fooled into signing a transaction that appeared honest, but actually made them forfeit control of their assets. The one’s behind it were North Korea’s Lazarus Group – the most notorious crypto hacking group in the world.
According to Blockstream (producers of Jade, a Bitcoin hardware wallet we recommend) Bitcoin’s unique architecture would have prevented the same type of exploit from occurring. Multisig is natively supported in Bitcoin for the highest security guarantees.
“Security and reliability must always take precedence over programmability and expressivity. That is the difference between the Bitcoin and crypto ethoses,” tweeted Liquid Network in response.
Since the hack took place, many Bitcoiners have joked that Ethereum’s co-founder, Vitalik Buterin, should demand Ethereum “roll back” its chain (again) to avoid to avoid funding North Korean terrorists with stolen funds. (The first Ethereum roll back occurred after the famous “DAO” hack in 2016.)
Overall, the situation is going far better for customers and regular users than crypto blowups of the past, such as Celsius or FTX. That said, Friday’s events come with two important takeaways.
- Keep it simple: stick to Bitcoin, not cRyPto.
- Always keep your Bitcoin in a personal wallet only you control.
Centralized exchanges are major Bitcoin honeypots that the world’s most sophisticated hackers are always trying to target. This is one of many reasons we don’t hold your coins, eliminating this risk completely.
If you want to buy with Beaver and are in search of a hardware wallet for the job, read our guide on Bitcoin wallets here, updated for 2025.
Strategy Prepares To Buy Another $2 Billion In Bitcoin
After several weeks of slow activity, Strategy (formerly MicroStrategy) may soon return to its heavy Bitcoin-buying ways, after announcing another $2 billion convertible bond offering on Tuesday.
To recap, these convertible bonds are a special type of debt that Strategy uses to buy BTC in a way that is overall accretive to MSTR shareholders. Back in November, the company heavily deployed these bonds to buy billions of dollars worth of BTC, bitcoin’s price surged dramatically in the process.
The question now is whether Strategy will successfully find willing buyers for its bonds, which was no problem at all three months ago. If it can, it could be a massive tailwind for BTC as Strategy starts inhaling vast amounts of bitcoin off the market again.
The company’s stock, MSTR, has steadily chopped downward over the past two months, down 20% over the past month alone following a massive November rally. Could this be the moment that kicks MSTR back into shape?
Bitcoin Price Could Drop To $86k USD, Says CryptoQuant
Bitcoin’s price action has also been rather boring as of late, and on-chain analysts at CryptoQuant say things could get worse before they get better for BTC.
“The price of Bitcoin fell to a one-month low of $93K [USD] and could decrease further to $86K [USD] if demand growth and liquidity conditions do not improve,” the firm’s analysts wrote in a report this week.
Overall Bitcoin network activity is down 17% from its November 2024 highs, including metrics like active addresses and number of transactions. They also cited weak daily demand from the Bitcoin spot ETF products, which are now absorbing just 1000 BTC daily compared to 18,000 BTC in November.
Stablecoin growth has also slowed considerably, which CryptoQuant says will be necessary for another BTC rally. “For example, the 60-day change of USDT’s market capitalization is now $1.5 billion, down 92% since December 16, when it hit $20.4 billion,” analysts wrote.
Could this be the calm before an upside surge we’ve seen so many times before, or a buying opportunity if Bitcoin dips?
Stay humble,
Andrew
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