Podcast Discussion: Deep Dive Into This Article.
In a shocking security breach, crypto exchange Bybit has confirmed that its Ethereum cold wallet was compromised, leading to the loss of nearly $1.46 billion in digital assets. This incident, flagged by on-chain investigator ZachXBT, marks one of the largest crypto exchange hacks to date.
How the Hack Happened
Multi-Signature Wallet Breach
Bybit utilizes multi-signature wallets, which require multiple approvals for transactions to enhance security. However, in this case, hackers tricked all signers into approving unauthorized fund transfers.
Masked Transactions
According to Bybit CEO Ben Zhou, attackers manipulated a transaction to mislead wallet signers. While the team believed they were approving a legitimate address, they were unknowingly authorizing changes to the smart contract controlling Bybit’s ETH cold wallet.
Stolen Funds and Laundering Process
- The hackers withdrew all Ethereum and Ether derivatives from Bybit’s cold wallet.
- They began swapping the stolen funds for Ethereum tokens on decentralized exchanges.
- The stolen assets were split across multiple addresses to evade detection.
- Blockchain investigator ZachXBT published a list of these addresses, urging exchanges to blacklist them.
Bybit’s Response
Bybit CEO Ben Zhou assured users that the breach was limited to the Ethereum cold wallet and that all other funds remain secure. He also confirmed that withdrawals are functioning normally, despite the massive attack.
Conclusion
This exploit, amounting to over 50% of all crypto stolen in 2024, could be the largest-ever hack against a single exchange. As the investigation continues, the crypto community remains on high alert, monitoring further developments.
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