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Bybit Restores $1.4 Billion in Stolen Ether After Hack
In a significant development, cryptocurrency exchange Bybit has successfully recovered the entire amount of stolen Ethereum (ETH) worth approximately $1.4 billion following a massive hack that occurred on February 21. According to CEO Ben Zhou, all client assets have been restored to a 1:1 ratio.
To achieve this feat, Bybit utilized a Merkle tree verification system, a cryptographic method designed to ensure the integrity of asset reserves. This innovative approach allowed the exchange to recover nearly 88% of the stolen funds, which represents over 60% of all cryptocurrency thefts in 2024.
The recovery process involved securing 446,870 ETH worth approximately $1.23 billion through loans, whale deposits, and direct purchases. Furthermore, a Bybit-linked wallet purchased 157,660 ETH valued at $437.8 million from prominent investment firms Galaxy Digital, FalconX, and Wintermute via over-the-counter (OTC) deals. Another wallet, identified as “0xd7CF…A995,” acquired $304 million in ETH via transactions on centralized and decentralized exchanges.
The hack on Bybit, which targeted liquid-staked ETH, Mantle Staked ETH (mETH), and other ERC-20 tokens, had significant consequences. The total assets of the exchange decreased by $5.3 billion following the incident, including the stolen amount. Additionally, customer withdrawals exceeded $5.3 billion on February 22.
Despite this setback, Bybit’s financial position remains strong. According to data from DefiLlama, the exchange’s total assets currently stand at $10.9 billion, with proof-of-reserves auditor Hacken confirming that Bybit’s reserves still exceed its liabilities, ensuring that all user funds remain fully backed.
The market reaction to the hack suggests that it was perceived as a short-term hit rather than a crisis, with Ethereum rebounding rapidly as Bybit replenished its treasury. This swift recovery demonstrates investors’ confidence in the exchange’s ability to safeguard their assets.
Cryptocurrency analyst Neil Roarty from ClickOut Media emphasized that while the attack may prompt regulatory scrutiny and potentially dampen inflows, it will not deter investors from seeing the long-term potential of cryptocurrencies. However, the security concerns surrounding cryptocurrency storage remain a pressing issue.
The successful recovery of stolen funds has likely alleviated some of the concerns surrounding Bybit’s ability to protect user assets. Nevertheless, this incident serves as a stark reminder of the importance of maintaining robust security measures in the cryptocurrency space.
