On February 21, 2025, Bybit, a prominent cryptocurrency exchange, experienced a significant security breach resulting in the theft of approximately $1.4 billion worth of digital assets, including Ethereum (ETH) and staked Ether (stETH). This incident has raised serious alarms within the cryptocurrency community regarding the vulnerabilities of centralized exchanges.
Blockchain investigator ZachXBT first reported the suspicious outflows, which involved over 401,000 ETH and substantial amounts of staked assets being transferred to new addresses. As of now, it is estimated that around $200 million worth of stETH has already been liquidated on decentralized exchanges.
The attack was executed through a manipulation of the smart contract logic associated with Bybit’s cold wallet during what was believed to be a routine transfer. Bybit’s CEO, Ben Zhou, confirmed that the hacker gained unauthorized control over the exchange’s ETH cold wallet, leading to the massive outflow of funds. Zhou reassured users that all other wallets remained secure and that normal withdrawal operations were still functioning.
In response to the breach, the price of Ethereum saw a notable decline, dropping by over 2% shortly after news of the hack broke. The magnitude of this incident marks it as one of the largest hacks in cryptocurrency history, surpassing previous breaches such as the Mt. Gox and CoinCheck incidents.
As investigations continue, experts are closely monitoring the movements of the stolen assets across multiple addresses to prevent further laundering attempts. The incident serves as a stark reminder of the ongoing security challenges faced by cryptocurrency exchanges and underscores the importance of robust security measures in safeguarding digital assets.
