Bybit Restores Ethereum Reserves After $1.4 Billion Exploit

Bybit CEO Ben Zhou announced the successful restoration of the exchange's Ethereum (ETH) reserves after a record-breaking exploit on February 21, which stole over 400,000 ETH, valued at approximately $1.4 billion. To address the deficit, Bybit secured emergency liquidity through bridge loans from crypto industry partners, whale deposits, and ETH purchases, as indicated by on-chain data. These measures ensured the exchange could meet user withdrawal demands and maintain operational stability.

Bybit swiftly acquired substantial amounts of ETH through over-the-counter (OTC) transactions to rebuild its reserves. CEO Zhou assured users of the exchange's solvency, emphasizing that Bybit's treasury and retained earnings were sufficient to cover the losses. The attack targeted Bybit's multi-signature cold wallet during a routine transfer, with attackers believed to be part of the North Korean Lazarus Group. They manipulated the transaction using a fake user interface (UI) to mask a malicious smart contract, redirecting assets to their control.

With reserves now restored, Bybit can process all withdrawal requests as usual. An upcoming audited proof of reserves report will demonstrate a 1:1 ratio of client assets using a Merkle tree, reinforcing transparency and user trust.