Nearly every crypto investor’s worst nightmare unfolded on February 21, 2025, when hackers swiped a staggering $1.5 billion from Bybit’s Ethereum cold wallet – the largest cryptocurrency theft in history. The suspected culprit? North Korea’s notorious Lazarus Group, which made off with 400,000 ETH and various other tokens in what can only be described as a catastrophic security breach. Elliptic analysts continue tracking the stolen assets to prevent liquidation through exchanges.
North Korean hackers pull off crypto’s biggest heist, looting $1.5 billion from Bybit’s supposedly secure Ethereum wallet.
The aftermath was brutal. Panicked users rushed to withdraw their funds, triggering a massive $4 billion “bank run” that sent shockwaves through the crypto ecosystem. The hackers exploited critical weaknesses in the multi-signature approval process, compromising what was thought to be an impenetrable security system. Total outflows hit $5.5 billion, and Bybit’s total assets plummeted from $16.9 billion to $11.2 billion. So much for “institutional-grade security.” Without distributed ledger technology, the damage could have been even more catastrophic and harder to trace.
Things got even messier when Safe wallet complications restricted access to $3 billion in USDT reserves. Bybit scrambled to develop new software for manual signature verification, processing over $100,000 in withdrawals within two hours. Talk about damage control. CEO Ben Zhou‘s “all hands on deck” call seemed like an understatement as roughly half of all exchange funds vanished during the crisis.
The market responded predictably – Ethereum’s price dropped from $2,823 to $2,685. Meanwhile, Bybit enlisted blockchain analysis firms like Chainalysis to chase the stolen funds across multiple wallets and platforms. The exchange hurriedly moved remaining funds off Safe cold wallets, probably wondering why they hadn’t done that sooner.
Bybit’s trying to save face, pledging to cover unrecovered funds using their treasury. With $20 billion in client assets at stake, they’re working with authorities including Interpol and exploring various recovery options. Even a blockchain rollback is on the table – so much for “immutability.”
The incident has sparked intense debate about cryptocurrency security and custody. Regulators are circling, industry leaders are sweating, and users are questioning their trust in centralized exchanges. One thing’s crystal clear: this record-breaking hack has exposed the crypto industry’s ongoing vulnerability to sophisticated cyber threats. Not exactly the kind of history anyone wanted to make.
