Bybit Suffers Historic $1.4 Billion Hack
On February 21, 2025, hackers infiltrated Bybit, a leading cryptocurrency exchange founded in 2018 by CEO Ben Zhou and headquartered in Dubai. The attackers stole approximately 401,347 ETH—valued at over $1.4 billion—making this one of the largest hacks in cryptocurrency history.
How the Hack Occurred
Hackers manipulated the transaction-signing process during a routine transfer from Bybit’s Ethereum (ETH) multi-signature cold wallet to its warm wallet. Although the system displayed the correct wallet address, the attackers altered the underlying smart contract logic, tricking the system into approving fraudulent transactions.
Analysis revealed that the attackers:
- Utilized phishing and social engineering techniques to steal internal credentials.
- Compromised all signer PCs, allowing them to authorize unauthorized transactions.
- Staged the user interface (UI) to display legitimate transaction details while executing hidden malicious commands.
Did the Lazarus Group Execute the Attack?
Initial reports suggest that the Lazarus Group, North Korea’s notorious cybercriminal syndicate, may have orchestrated the attack. If confirmed, this event could position North Korea as one of the largest holders of ETH.
Tracking the Stolen ETH
Blockchain analysts traced the stolen ETH through decentralized exchanges, privacy-enhancing protocols, and coin mixers. In response, Bybit’s security team and experts launched an extensive investigation. CEO Ben Zhou reassured users that client funds in other wallets remain secure.
Crypto Security Under Scrutiny
This hack has renewed concerns about crypto exchange security. In 2024, hackers stole $2.2 billion from the cryptocurrency sector—a 21.1% increase from the previous year. As cyber threats grow more sophisticated, exchanges must boost wallet security, authentication processes, and the integrity of their smart contracts.
A History of Major Crypto Hacks
The Bybit hack is part of a trend of major crypto breaches. This pattern raises a critical question:
Can we make smart contracts truly tamper-proof?
Comparison with Previous Major Crypto Hacks
This incident is part of a series of significant crypto breaches over the past decade. Notable examples include:
- Ronin Network (2022): Exploited private keys of validator nodes, resulting in a $620 million loss.
- Poly Network (2021): Cross-chain protocol vulnerabilities led to a $611 million theft, with most funds later returned.
- Binance (2019): Phishing and malware attacks compromised hot wallets, leading to a $40 million loss.
- Mt. Gox (2014): A breach of the exchange’s hot wallets resulted in a $460 million loss, representing 7% of all Bitcoin in circulation at the time.
- Coincheck (2018): Inadequate cold storage security led to a $534 million theft.
- Wormhole Bridge (2022): Vulnerabilities in cross-chain bridges resulted in a $326 million loss.
- KuCoin (2020): Theft of private keys in hot wallets led to a $281 million loss, with a significant portion later recovered.
- Bitfinex (2016): Exploited vulnerabilities in multi-signature wallets resulted in a $72 million loss.
- Harmony Horizon Bridge (2022): Cross-chain bridge vulnerabilities led to a $100 million theft.
- NiceHash (2017): A breach of the mining platform resulted in a $64 million loss.
ICP’s Solution: Preventing Smart Contract Manipulation
Bybit’s hack exposed a fundamental flaw: attackers were able to alter smart contract logic undetected. The Internet Computer Protocol addresses these vulnerabilities by providing tamperproof canister smart contracts through advanced cryptography, decentralized governance, and strict development practices.
- Immutable Smart Contracts
Unlike Ethereum’s upgradable contracts, ICP’s canister smart contracts are immutable once deployed—unless explicitly programmed to allow upgrades. This ensures that no unauthorized modifications can occur. - Chain-Key Cryptography for Secure Computations
ICP employs chain-key cryptography to verify smart contract computations across nodes without requiring the entire blockchain. This ensures that every code execution is cryptographically verified and tamper-resistant.
- Strict Upgrade Controls & Decentralized Governance
ICP enforces governance-based upgrades and role-based permissions. Any change to a contract requires cryptographic validation and approval from a decentralized network, preventing a single compromised signer from approving fraudulent transactions.
- Isolated Execution Prevents Cross-Contract Attacks
Each canister smart contract in ICP operates within its own sandboxed environment. This isolation ensures that if one contract is compromised, the breach does not spread to other contracts—unlike in systems where interconnected contracts may propagate vulnerabilities.
- Automated Security Checks to Reduce Human Error
ICP integrates automated vulnerability scanning during the development cycle. This process ensures that every contract is audited before deployment, reducing the risk of human error introducing exploitable backdoors.
- Tamper-Resistant State and Verification
On ICP, every state change is cryptographically verified and cannot be reversed without full network consensus, ensuring the integrity of all operations.
Conclusion: Why ICP is the Future of Secure Smart Contracts
The Bybit hack underscores a major challenge: blockchains remain vulnerable to sophisticated cyberattacks that exploit smart contract weaknesses. ICP addresses these challenges by offering:
- Immutable execution – Once deployed, smart contracts remain unaltered.
- Chain-key cryptography – Provides secure and verifiable computations.
- Decentralized governance – Prevents single points of failure.
- Strict upgrade controls – Blocks unauthorized contract modifications.
Automated security checks – Minimizes human error in smart contract deployment.
The sources used for this article are multiple: AP | Forbes | Financial Times
For further reading, we suggest: Effective Rust Canisters | How to Audit an Internet Computer Canister
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