North Korea Allegedly Steals Over $1.5 billion in Major Bybit Hack

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Major hacking incident causes significant market turmoil as cryptocurrencies decline / bloomberg

A significant hacking incident is reported to have occurred at Bybit, one of the world's largest cryptocurrency exchanges, leading to the theft of over approximately $1.5 billion. This incident, suspected to be orchestrated by North Korean hacking groups, has resulted in a notable decline in the prices of major cryptocurrencies, including Bitcoin and Ethereum.

Recent reports from major news outlets, including Bloomberg and CNBC, reveal that Bybit suffered losses exceeding 2 trillion won due to this hack. This theft surpasses the previous record for the largest cryptocurrency theft, which occurred in 2021 when the Poly Network was hacked for about $611 million. Established in 2018, Bybit has become one of the top cryptocurrency exchanges globally, with an average daily trading volume exceeding $36 billion, and previously ranked as the second-largest exchange by trading volume.

Bybit's CEO, Ben Zhou, announced on social media platform X that hackers compromised one of the exchange's offline Ethereum wallets, confirming the severity of the breach. Blockchain analysts from firms like JackXBT and Arkham Intelligence indicated that over $1.4 billion in assets have been identified as having been moved through suspicious transactions, attributing the attack to the North Korean hacking group known as Lazarus.

Lazarus is notorious for stealing billions of dollars from the cryptocurrency industry and is believed to be affiliated with North Korea's intelligence agency. Reports suggest that they exploit security vulnerabilities to siphon funds and employ sophisticated money-laundering techniques to obscure the flow of stolen assets. This group has a history of high-profile hacks, including the theft of $200 million worth of Bitcoin from four South Korean exchanges in 2017, as well as the 2019 theft of over 342,000 Ethereum from the cryptocurrency exchange Upbit.

Following the news of the hack, Bitcoin, which had previously seen a 1% increase, fell by over 2%, while Ethereum plunged more than 7%. Other cryptocurrencies, including XRP, Dogecoin, and Solana, also experienced significant drops. According to Coinbase, as of the morning of February 22, Bitcoin was trading at $96,112.27, down 2.24% in 24 hours, while Ethereum decreased by 2.64%, trading at $2,667.75.

Alexis Sirkiya, co-founder of GSR, a cryptocurrency exchange and liquidity provider, remarked on the impact of the hack, stating that, similar to previous failures of centralized exchanges (CEX), the market faced panic selling and liquidity disruptions, highlighting the ongoing risks associated with centralized asset storage. Bybit operates as a centralized exchange, where users lack direct control over their private keys. This lack of control means that in the event of a hack, users are at risk of losing their funds. In contrast, decentralized exchanges (DEX) allow users to maintain control over their private keys, thus mitigating the risks associated with hacking.

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