Analysts condemn deregulation of $1.5 billion Bit Hack

Crypto traders woke up to big wins and big losses on Friday. Just as Coinbase celebrated the SEC filing a lawsuit, Bybit has released $1.5 billion, the largest crypto theft ever recorded.

The Dubai-based exchange, which deals $36 billion in daily transactions, was shared by CEO Ben Zhou via X’s post, as hackers took over Ethereum cold wallet and emptied it into an unknown address , almost immediately confirmed the violation.

According to Coingecko data, of course, the hacks fell by more than 3%, bringing the 3% to around $96,000.

Bibit Hack is currently promoting concerns about crypto security under deregulation. Once the SEC is pulled back, the exchange will have fewer compliance checks and easier targeting hackers.

“Until this type of attack, a deregulated market sounds good. In the short term, we’re rooting for a lot of regulations,” said Hillary Allen, a professor at American University. But beware of what you want.”

Meanwhile, the supervising detective from Chain Zachxbt has tracked Bibit’s Ethereum stolen in a wallet related to the North Korean Lazarus group. The infamous country-sponsored cybercrime unit is responsible for some of the biggest crypto robbers in history. This includes a $235 million WajiRux attack and a $50 million sparkling capital infringement.

Lazarus follows a long-term laundry process, making the fund almost impossible to recover. Convert stolen tokens to Ethereum, exchange them for Bitcoin, and mix transactions before cashing out via Chinese OTC brokers. This process can take years, but in some cases it is known that Lazarus will sit on funds that have been stolen for more than six years before moving.

Bybit has secured a loan to cover the withdrawals, but you still have to pay it back. The stolen funds are forever gone. This means that Bybit will be forced to buy Ethereum in the market to settle the debt.

This creates an extraordinary dynamic. Buying pressure on Bibit could push the price of ETH up, but Lazarus dumps ETH on Bitcoin and maintains the downward pressure of BTC over time.

For traders, that means Ethereum could hold steadily, but as North Korea slowly cashes its profits, Bitcoin could face pressure for long-term selling.

Bibit faces bank execution at withdrawal

Crypto traders noticed an unusual leak from BYBit before the company announced it. Soon after his statement, Zhou went live at X to deal with the community appropriately.

“The hackers have controlled the specific ETH cold wallet we signed and moved all ETH in the cold wallet to this unidentified address,” Zhou said.

Bitget CEO Gracy Chen downplayed the impact, saying in Chinese: The losses this time are huge, but that’s just their annual profits. I think the client’s funds are 100% safe. There’s no need to panic or run at the bank. Come on, Ben! ”

By then, panic had been set. Bibit faced a massive bank run and received 350,000 withdrawal requests within 10 hours. The exit flood exceeded the platform’s processing speed, and 2,100 requests were queued as Bybit teams worked overnight.

BYBIT had $16.2 billion in reserves, but losing $1.5 billion in Ethereum and derivatives wiped out 9% of its total assets. Zhou continued to reassure users that the exchange was a solvent, but traders were not taking the chance.

With billions gone, BYBIT had to act quickly to avoid the fear of bankruptcy. Rival Exchange Bitget intervened via a loan of 40,000 ETH ($106 million) to stabilize the withdrawal.

Bitget (@bitgetglobal) has moved $40,000 ($1006m) to $40,000 ($1006m) (@bybit_official) as a loan to handle customer withdrawals.

– lookonchain (@lookonchain) February 22, 2025

Running on Zero Sleep, Zhou told users, “I’ve experienced the most withdrawals I’ve ever seen since the hack.” Bybit’s team handled 99.994% of requests, saying, “The withdrawal is complete We asked our customers to leave a comment if they did.

Lazarus Group Lands Funds for North Korea’s Arms Program

Security experts at Chain Orisis say the Lazarus Funnel stole the codes from North Korea’s nuclear and ballistic missile program. This group has been the main target of us and the United Nations sanctions, but the methods continue to evolve.

In 2021 alone, Lazarus stole $400 million from centralized exchange and investment companies. Interestingly, in terms of dollar value, Bitcoin accounts for less than a quarter of codes stolen by hackers. In 2021, only 20% of the stolen funds were Bitcoin, while 22% were either ERC-20 tokens or altcoins. And for the first time, ether accounted for the majority of the funds stolen at 58%.

The washing process becomes more complicated, with Lazarus using a mixer to hide the transactions. According to chain melting data, in 2019, only 21% of stolen funds were mixed, but by 2021, that number had jumped to 65%.

“Chainalysis has identified $170 million in its current balance representing 49 individual hacked stolen funds between 2017 and 2021,” Chainalysis said in its report.

Meanwhile, Zhou said, “12 hours from the worst hack in history. All withdrawals have been handled. Our withdrawal system is now fully back to normal pace. Withdrawals of any amount, delays are You can experience something that isn’t. Thank you for your patience and we are sorry that this happened.”

He added that Bybit will release a full incident report and security measurements over the next few days.