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Bybit confirmed that hackers breached its multi-signature Ethereum cold wallet, draining nearly $1.5 billion in crypto. The attack, first flagged by on-chain investigator ZachXBT, came just hours after Bybit expanded access to liquidation data for increased transparency.
Bybit CEO Ben Zhou explained that the attackers tricked the wallet’s signers by disguising a transaction. While the team believed they were approving a legitimate address, they were unknowingly authorizing changes to the smart contract controlling Bybit’s Ethereum cold wallet. This gave hackers full access, allowing them to withdraw all Ether and Ether derivatives to an unknown address.
Multi-signature wallets are designed to enhance security by requiring multiple approvals before transactions go through. If one signer is compromised, others can still block unauthorized transfers. However, in this case, hackers bypassed all approvals by manipulating the transaction details.
Once they gained control, the attackers moved quickly. They started swapping the stolen funds for Ethereum-based tokens on decentralized exchanges. ZachXBT reported that the hackers then split the assets across multiple addresses to avoid detection. He shared a list of these addresses on Telegram and urged crypto exchanges to block them.
Zhou assured users that the breach was contained to Bybit’s Ethereum cold wallet and that withdrawals remained operational. “Please rest assured that all other cold wallets are secure. All withdrawals are NORMAL,” he said.
The attack on February 21 may be one of the largest crypto exchange exploits to date. The stolen amount represents more than half of all crypto lost to hacks in 2024.