Bitcoin, Ether Tumble As Bybit Exchange Confirms Massive $1.4 Billion Hack

Crypto prices tumbled this morning – most notably BTC and ETH – on reports that cryptocurrency exchange Bybit has reportedly been hacked for over $1.4 billion in liquid-staked Ether and MegaETH (mETH).

The sudden downturn liquidated roughly $100 million worth of leveraged derivatives trading positions, overwhelmingly longs anticipating prices to rise, CoinGlass data shows.

As Vince Quill reports for Cointelegraph.com, following the incident, the onchain security analyst ZackXBT warned users to blacklist addresses associated with the hack. Bybit co-founder and CEO Ben Zhou also provided an update on the security breach.

Source: mETH and stETH tokes swapped for ETH

Zhou confirmed that a transfer was made from the exchange’s multisignature wallet to a warm wallet approximately one hour prior.

The CEO said the specific transaction was masked to appear legitimate but contained malicious source code designed to alter the smart contract logic of the wallet and siphon funds. Zhou reassured customers:

“Please rest assured that all other cold wallets are secure. All withdrawals are NORMAL. I will keep you guys posted as more develops. If any team can help us to track the stolen fund will be appreciated.”

The incident follows several high-profile hacks and security incidents throughout 2024 and early 2025 that left crypto exchanges drained of funds.

The crypto industry experienced an uptick in hacks and scam-related activity in the first several weeks of February 2025.

Bybit ETH multisig cold wallet just made a transfer to our warm wallet about 1 hr ago. It appears that this specific transaction was musked, all the signers saw the musked UI which showed the correct address and the URL was from @safe . However the signing message was to change…

— Ben Zhou (@benbybit) February 21, 2025

“Bybit is Solvent even if this hack loss is not recovered, all of the client’s assets are 1 to 1 backed — we can cover the loss,” the Bybit CEO added in a separate post.

In an X statement, the exchange assured that its cold wallets “remain fully secure.” “All client funds are safe, and our operations continue as usual without any disruption.”

Bybit detected unauthorized activity involving one of our ETH cold wallets. The incident occurred when our ETH multisig cold wallet executed a transfer to our warm wallet. Unfortunately, this transaction was manipulated through a sophisticated attack that masked the signing…

— Bybit (@Bybit_Official) February 21, 2025