**Bybit Successfully Recovers Stolen 400,000 ETH After February Breach, Ensures Liquidity with Loans and Large Deposits, and Prepares for Upcoming PoR Report to Confirm Reserves**
Bybit has made significant strides in recovering from the February breach, successfully restoring its stolen Ethereum (ETH) reserves. Following the hack that resulted in the loss of over 400,000 ETH, valued at around $1.4 billion, Bybit CEO Ben Zhou announced on Monday that the exchange has fully addressed the Ethereum reserve shortfall. Zhou reassured users that the exchange’s reserves are now completely restored, and an audited proof-of-reserves (PoR) report will be released soon to confirm that Bybit’s client assets are backed on a 1:1 basis.
In a recent update, Zhou shared that Bybit has successfully closed the ETH gap, and a new audited PoR report will be published shortly, demonstrating that Bybit is back to 100% 1:1 backing for client assets through a Merkle tree. He encouraged users to stay tuned for the upcoming report.
In the aftermath of the attack, Bybit acted swiftly to restore its stolen ETH reserves. According to blockchain analytics firm Lookonchain, Bybit acquired approximately 446,870 ETH, valued at around $1.23 billion, through a mix of loans, large investor deposits, and direct ETH purchases. This proactive approach was crucial in reinstating the exchange’s liquidity and operational stability. Zhou emphasized that the forthcoming PoR report will confirm the complete recovery of Bybit’s reserves, ensuring transparency and integrity for users regarding the backing of their assets.
**The Hack: A Major Exploit**
The breach, reported by ETHNEWS, took place on February 21 and involved a sophisticated attack on Bybit’s Ethereum multi-signature cold wallet. Hackers exploited a phishing vulnerability, manipulating the multi-signature approval process through a counterfeit user interface. This breach allowed them to steal over 400,000 ETH, raising concerns about Bybit’s ability to fulfill user withdrawal requests and maintain liquidity. This incident marked one of the largest security breaches in the history of cryptocurrency.
Following the attack, Bybit faced a significant outflow of assets, with over $6.1 billion withdrawn from the platform over a single weekend. The exchange’s total assets under management plummeted from $16.9 billion to $10.8 billion, sparking fears of a liquidity crisis. However, Bybit has reaffirmed its commitment to tracking and recovering the stolen ETH, which has been traced back to the Lazarus Group, a hacking collective believed to have ties to North Korea. The exchange is actively collaborating with authorities to trace the stolen funds and return them to their rightful owners.
**Emergency Liquidity Secured**
To address the shortfall and avert a potential bank-run-like scenario, Bybit sought emergency liquidity sources. Zhou referred to these measures as “bridge loans,” highlighting the exchange’s proactive steps to ensure stability and confidence among its users.
