Despite the markets not reacting aggressively, a historic crypto hack occurred on Friday, marking the largest incident in USD terms. If we consider the FTX case as a fraud with significant compensations expected, the Bybit incident stands as the biggest loss, with over $1.4 billion in Ether falling into the hands of attackers.
The Bybit Attack
The North Korea-based hacking group Lazarus is attacking crypto projects to finance its nuclear program with state support. Lazarus, responsible for billions in attacks, employs social engineering as its primary weapon. It develops personalized attack strategies while targeting major entities.
For instance, if you work at a large exchange, one morning you might receive a job offer from a seemingly credible company. They can even compromise the email infrastructure of that company to make their story more convincing. When they offer conditions far better than your current opportunities and send you a job specification as a PDF, opening that file could lead to your device being compromised. They have conducted significant operations, like Ronin, using various attack methods.
Exchange Reserves and Current Status
According to CryptoQuant data, reserves have rebounded by 50% following the theft of liquid staked ETH tokens. Bybit is heavily borrowing ETH from various companies and making purchases over the OTC market. Reserves that fell to 61,000 ETH from an initial 439,000 before the hack have now increased to 201,600.
Some of the increasing reserves are linked to spot purchases. Lookonchain reported today that 106,498 Ether worth $295 million has been bought. Binance lent 50,000, Bitget 40,000, and HTX lent 10,000 ETH. The recovering exchange reserves and ongoing user withdrawal processes at Bybit have prevented a larger collapse. Investors have breathed a sigh of relief, expecting risks to further decline over time.
According to DefiLlama data, Bybit’s reserves have decreased by $5.3 billion since the hack, including losses from the incident. Considering it held roughly $20 billion in reserves, this is not an overwhelming amount. Investors, fearing a repeat of the FTX incident, are swiftly moving their assets to safer places due to FUD.
