Bybit Secures ETH Holdings Following $1.5 Billion Theft

Crypto exchange Bybit has successfully restored its Ethereum (ETH) reserves. This marked a significant milestone in its recovery from one of the largest heists in crypto history. 

The announcement, made by Bybit CEO Ben Zhou on February 24, comes just days after the exchange suffered a $1.5 billion hack allegedly perpetrated by North Korea’s Lazarus Group.

Bybit Restores ETH Holdings

The attack targeted Bybit’s multisig cold wallet system. The hackers exploited a vulnerability to siphon 401,346 ETH—valued at approximately $1.13 billion—from the exchange’s hot wallet. 

Within 24 hours of the breach, Bybit’s total reserves plummeted by $5.2 billion, raising concerns about the platform’s stability. Despite the setback, the exchange quickly secured emergency funding to bolster its reserves. Furthermore, on-chain data confirmed that deposits and withdrawals on Bybit returned to normal levels shortly after the hack.

Now, Zhou has confirmed that Bybit has restored its ETH reserves to a full 1:1 backing of client assets.

“Bybit has already fully closed the ETH gap,” he said.

He added that an audited Proof-of-Reserves (POR) report will be released soon. The forthcoming POR report will utilize a Merkle tree structure, providing transparent proof that Bybit maintains 100% reserve backing for client assets.

According to data from Lookonchain, Bybit received approximately 446,870 ETH ($1.23 billion) through a combination of loans, whale deposits, and direct ETH purchases.

Among the key contributors, possible over-the-counter (OTC) deals accounted for 180,269 ETH, while purchases from centralized and decentralized exchanges added another 109,033 ETH. Loans from unidentified whales or institutions contributed 47,800 ETH, alongside transfers from two unknown sources—one sending 20,000 ETH and another moving 8,000 stETH.

Several industry players also stepped in to support Bybit’s recovery. Bitget provided a loan of 40,000 ETH, and MEXC lent 12,653 stETH. DWF Labs also contributed 2,200 ETH.

Additional contributions came from Mirana Ventures and possible input from Fenbushi Capital, each supplying 10,000 ETH. Bybit also received 4,416 ETH withdrawn from other centralized exchanges. Lastly, an individual entity’s 2,499 ETH was added to the total inflows.

Jeff Park, Head of Alpha Strategies at Bitwise, praised Bybit’s rapid recovery, which is in sharp contrast to the collapse of FTX in 2022. 

“Bybit succeeded where FTX didn’t because the crypto cooperative is stronger for decentralized regulatory capture than the centralized regulatory capture,” Park stated

According to Park, this structural advantage isn’t a flaw but a fundamental strength of the crypto ecosystem.

“The reason is simple: the borderless crypto cooperative is retail, and non-Americans account for 95.8% of the world population,” he added.

In addition to its reserve restoration, Bybit has launched a bounty program, offering up to 10% of any retrieved assets as a reward. Should the full $1.13 billion be recovered, participants could collectively earn as much as $140 million.

Meanwhile, despite the exchange’s swift response, Ethereum’s market price has struggled to rebound. The hack triggered an immediate dip in ETH’s value. 

Although a brief recovery followed, the price has since slipped again. At the time of writing, ETH was trading at $2,731, representing a decline of 2.0% over the past 24 hours.