Outside Source
Bybit suffered a significant security breach last Friday, losing 401K ETH – worth around $1.4 billion – in one of the largest crypto heists in history. The attack has been widely attributed to the North Korea-linked Lazarus Group, a notorious hacking entity responsible for multiple high-profile crypto thefts.
Despite the breach, Bybit swiftly replenished its ETH liquidity through other exchanges and brokers, ensuring that withdrawals remained functional.
Bitcoin and USDT Reserves Sink
Bybit’s ETH reserves have since recovered to 372K. In fact, nearly 60% of the replenished ETH came from brokers and other exchanges, while Binance contributed 32% and Bitget provided 8% from its own funds.
CryptoQuant’s data analysis shared with CryptoPotato indicates a sharp surge in ETH inflows to Bybit in the aftermath of the hack, with the average ETH inflow per transaction skyrocketing to 1.2K ETH, compared to just 8.8 ETH before the incident. This essentially indicates that large entities moved swiftly to support Bybit’s liquidity recovery.
While the ETH reserves have nearly returned to pre-hack levels, the exchange has faced a notable decline in Bitcoin and USDT holdings. Bybit’s Bitcoin reserves, for one, plunged from $7 billion to $4.7 billion, representing a 32% decrease.
Meanwhile, USDT reserves have dropped by 48%, falling from $3.1 billion to $1.6 billion. This shift highlighted the broader impact of the breach, as investors may have moved funds out of Bybit despite its ETH liquidity recovery.
Impact of Bybit Hack
The Bybit hack sent ripples through the market and initially caused ETH to plummet from $2,850 to $2,600, while Bybit’s ETH-USDT market briefly traded at a slight discount compared to other exchanges. However, the market’s resilience was evident as the price gap closed over the weekend, and by early Sunday, ETH had fully recovered to its pre-hack levels.
Unlike in previous years, where such large-scale breaches triggered prolonged instability, the market’s response to the Bybit hack was relatively muted, reflecting a more mature and robust crypto ecosystem, according to CoinMetric’s update.
“The market has matured to where it can handle shocks of this magnitude without skipping a beat, let alone being an existential risk to an exchange or the industry at large.”
This article first appeared at CryptoPotato
