The cryptocurrency market experienced a sharp downturn following a massive security breach at Bybit, one of the world’s leading crypto exchanges. On February 21, 2025, Bybit reported a hack that resulted in the theft of approximately $1.4 billion in Ethereum (ETH) and staked Ether tokens. This incident now stands as the largest crypto theft in history.
Crypto Prices Drop in Response
The market reacted negatively to the breach, with major cryptocurrencies seeing notable declines:
- Bitcoin (BTC) fell over 2%, trading near $96,300.
- Ethereum (ETH) dropped about 3%, settling at $2,669.
- Dogecoin (DOGE) declined around 4%, trading at $0.244.
The broader cryptocurrency market capitalization also shrank, dropping to $3.3 trillion after losing more than 3% in a single day. This sharp decline led to widespread liquidations in the futures market, with over 192,000 traders liquidated and positions totaling $570 million closed within 24 hours.
How the Breach Occurred
Bybit’s CEO, Ben Zhou, confirmed that the attack happened during a routine transfer between digital wallets. The hacker manipulated the process, redirecting the funds to an unidentified address. Despite the massive loss, Zhou reassured customers that:
- All remaining customer funds remain secure.
- The company is fully solvent, even if the stolen assets are not recovered.
Investigation Links Attack to North Korea’s Lazarus Group
In response to the attack, Arkham Intelligence offered a bounty of 50,000 ARKM tokens (valued at approximately $31,600) for any information leading to the attackers.
Blockchain security expert ZachXBT later confirmed that the breach was carried out by Lazarus Group, a North Korean state-sponsored hacking organization. His investigation revealed evidence through:
- Test transactions conducted before the attack.
- Wallet addresses linked to prior Lazarus exploits.
- On-chain forensic analysis connecting the stolen funds.
The Growing Threat to Crypto Security
The Bybit hack is the latest in a series of security breaches affecting the cryptocurrency sector. In 2024 alone, hackers stole $2.2 billion from various platforms, highlighting ongoing vulnerabilities in the industry.
This latest attack raises concerns about mainstream adoption, as security remains a major obstacle to institutional and retail investor confidence. The incident underscores the need for stronger cybersecurity measures to protect digital assets and maintain trust in the market.
