Ethereum Price Dips After Bybit Reports Massive $1.4 Billion Hack

In a development that could have a significant impact on the Ethereum price, cryptocurrency exchange Bybit has confirmed a major security breach involving its ETH cold wallet. 

In a recent post on social media platform X (formerly Twitter), the exchange revealed that the incident reportedly occurred during a transfer from the ETH multisig cold wallet to a warm wallet, where a “sophisticated attack” manipulated the transaction process.

Bybit Confirms Unauthorized Transfer Of 400,000 Ethereum

According to Bybit, the attacker was able to mask the signing interface, which displayed the correct address while altering the underlying smart contract logic. 

This deception allowed the hacker to gain control of the affected cold wallet, leading to the unauthorized transfer of significant ETH holdings to an unidentified address. 

The magnitude of the breach is substantial, with estimates suggesting that approximately $1.44 billion worth of assets, including 401,347 ETH valued at around $1.12 billion, were withdrawn. 

Additional assets included 90,376 stETH, worth $253.16 million; 15,000 cmETH, valued at $44.13 million; and 8,000 mETH, totaling $23 million.

CEO Ben Zhou Confirms Client Funds Are Safe

In response to the breach, Bybit has mobilized its security team in collaboration with leading blockchain forensic experts to investigate the incident thoroughly. 

The exchange has also extended an invitation to other teams with expertise in blockchain analytics and fund recovery to assist in tracing the misappropriated assets. 

Ben Zhou, Bybit’s co-founder and CEO of the exchange, addressed the situation, emphasizing that all other cold wallets remain secure and that client funds are safe. Zhou reassured users that operations continue as normal, with withdrawal processes unaffected by the incident. 

“The only cold wallet that was hacked was the ETH cold wallet,” Zhou stated, reinforcing the message that Bybit remains solvent and capable of covering losses, as all client assets are “backed on a one-to-one basis.”

Following the security breach, ETH experienced a 5% drop to $2,675, but has returned to the $2,766 level. 

Featured image from DALL-E, chart from TradingView.com