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With not all information public, Arkham Intelligence, a blockchain analysis firm, has concluded that North Korea’s Lazarus group was responsible for the $1.46 billion hack on the Bybit exchange. On platform X, Arkham offered a bounty of 50,000 ARKM tokens, worth around $30,000, for anyone who could identify the attackers responsible for Friday’s hack. Not long after, Arkham announced that freelancer ZachXBT had provided “definite proof” that the North Korean hacking group was behind the hack. According to current information, Lazarus, North Korea’s elite state-sponsored hacking group, pulled off the largest hack in history on a centralized crypto exchange. The hack resulted in the withdrawal of Ethereum tokens amounting to around $1.5 billion. Ethereum security researchers are scrambling to investigate the incident to understand how the attack happened and whether the hack may spread to other exchanges. Within days, crypto enthusiast ZachXBT identified the Lazarus group as the likely culprit. Lazarus has been responsible for many of the top attacks on digital assets. Blockchain firm Nansen revealed that the attackers first withdrew the funds into a single wallet and then distributed them to multiple wallets. “Initially, the stolen funds were transferred to a primary wallet, which then distributed them across more than 40 wallets”, Nansen said. “The attackers converted all stETH, cmETH, and mETH to ETH before systematically transferring ETH in $27 million increments to over 10 additional wallets”. Ben Zhou, Bybit CEO, urged customers to remain calm and assured them that 80% of funds were recovered by using bridge loans to replace the stolen money. Despite the current bank run on Bybit, Zhou assured users that withdrawals would not be blocked and that customers would have access to their funds. Leveraging bridge loans allows Zhou to honour withdrawal requests. At this stage, the return of stolen tokens is highly unlikely. ZachXBT has yet to release all data pointing to the Lazarus group. He says his analysis involved tracking online connections between wallet addresses until, with the assistance of a colleague, he was able to narrow down the suspects to the North Korean hacking group. ZachXBT found a connection between the wallets used in the Bybit hack and the wallets used in the $85 million hack of Singapore-based exchange Phemex. At this stage, at least, the attack appears to be caused by Blind Signing, in which the smart contact is approved without complete knowledge of its contents. “This attack vector is quickly becoming the favorite form of cyber attack used by advanced threat actors, including North Korea”, said Blockaid’s CEO Ido Ben Natan. “It’s the same type of attack that was used in the Radiant Capital breach and the WazirX incident.” “The problem is that even with the best key management solutions, today most of the signing process is delegated to software interfaces that interact with dApps.” “This creates a critical vulnerability- it opens the door for malicious manipulation of the signing process, which is exactly what happened in this attack,” he said. The stolen funds are unlikely to be returned because North Korea does not have an extradition agreement with the United States. The North Korean hacking group was able to attain more money in this single hack than in all of its hacks last year. This hack contrasts with other previous large-scale attacks, such as the 2016 Bitfinex hack, in that the people behind this attack will likely get away with it and will most likely keep the stolen money. This shows that the American justice system is limited to countries with extradition agreements. Although America focuses on retrieving lost funds through tax, there’s not much they can do about large-scale hacks. Tom Robinson, Elliptic’s chief scientist, described the attack as the “largest crypto theft of all time.” “The next largest crypto theft would be the $611 million stolen from Poly Network in 2021. In fact it may even be the largest single theft of all time”. Bybit appears to be processing withdrawals just fine after their hack,” wrote Coinbase executive Conor Grogan. They have $20B+ in assets on the platform, and their cold wallets are untouched. “Given the isolated nature of the signing hack and how well capitalized Bybit is, I don’t expect there to be contagion.” “A minute into the FTX bankrun it was clear they had no funds to withdraw. I know everyone has PTSD but Bybit is not an FTX situation, if it was I would be screaming it out. They will be fine”. The Lazarus group’s history can be traced back to 2017 when they hacked South Korean exchanges and stole over $200 million in Bitcoin. Crypto bank robberies seem to be here to stay and will need to be a major focus within the crypto industry.

North Korea has laundered $170 million in stolen cryptocurrency from 49 hacks (2017-2021). Laundered funds are used to support North Korea’s nuclear and missile programs. Cyberattacks generate about 50% of North Korea’s foreign currency income. North Korea’s cybercrime activities have been under scrutiny for years. Recent reports show that stolen digital assets continue to be used to fuel the country’s illicit operations. Specifically, the Lazarus Group, a notorious hacking group linked to North Korea, has stolen millions of dollars in digital assets. These funds are passed through a series of delicate processes to fund the regime’s nuclear and missile programs. If you want to understand what happens to funds after they’re stolen by North Korea/Lazarus Group, the Chainalysis 2022 report is great Step 1: Swap any ERC20s (like stETH) into ETH Step 2: Swap any ETH into BTC Step 3: Cash out BTC to cash (Chinese Renminbi) using Asian… pic.twitter.com/cmxUEAHRZN — Eric Wall | BIP-420 (@ercwl) February 21, 2025 $170 Million in “Unused” Crypto Stolen Since 2017 Between 2017 and 2021, North Korea collected $170 million in unused cryptocurrenc… The post North Korea Cybercrime: Millions in Stolen Crypto Fueling Missile Program appeared first on Coin Edition.

Announcement on Resumption of STETH-ERC20, FORT-ERC20 Network Withdrawal Services | Bitget Support Center https://www.bitget.com/support/articles/12560603823128

Ben Zhou, Bybit CEO, assured the public that user funds were safe and that the platform could cover losses following the largest crypto exchange hack in history. Security veterans and concerned crypto community members rallied behind Bybit on Friday, Feb. 21, after the exchange lost over $1.4 billion to hackers. The largest-ever crypto exchange hack occurred while Bybit was attempting a routine transfer, Zhou said during a livestream following the incident. Specific details about the breach points remain scarce. However, initial reports suggest that hackers tricked Bybit’s signers into authorizing a malicious transaction from the platform’s Ethereum (ETH) cold wallet. Just in: According to @zachxbt, Bybit faced a security incident (likely hacked) where $1.44B worth of funds were withdrawn.401,347 $ETH worth $1.12B90,376 $stETH worth $253.16M15,000 $cmETH worth $44.13M8,000 $mETH worth $23MLater, these funds were moved to another wallet.… pic.twitter.com/FAuoRx3Rri — Onchain Lens (@OnchainLens) February 21, 2025 You might also like: Bybit’s ETH cold wallet exploited for $1.46b Bybit employs a multi-sig structure designed by Safe to manage its ERC-20 token reserves. This wallet requires multiple team members to sign off on transactions before execution. OxCygaar, a blockchain developer and Abstract Chain contributor, theorized that bad actors attacked each signer and somehow used malware to alter the multi-sig UI. The ramifications of this scenario are ghastly, as it means the hackers may have individually identified each signer and compromised their computers or crypto wallets. idk how they knew the multisig signers, but this type of attack has happened in the past.requires identifying each signer and then getting them to unknowingly install malware so their multisig ui is compromised — cygaar (@0xCygaar) February 21, 2025 Community backs Bybit, CEO sources bridge loan ARKM tokens for any information leading to the hacker’s identification. Additionally, Safe, Bybit’s multi-sig provider, announced ongoing maintenance to strengthen safety. NEW ARKHAM INTEL BOUNTY: BYBIT HACKWe’ve created & funded a bounty to help identify the person or organization behind today’s >$1B Bybit hack.Submissions to this bounty will be shared with the Bybit team to support their investigation.Reward: 50K ARKMBounty:… pic.twitter.com/1X3QgmRdda — Arkham (@arkham) February 21, 2025 Also, Zhou said Bybit was working with other industry players like Binance, OKX, and KuCoin and law enforcement to reach a resolution. “We have filed a police report,” Zhou shared on the livestream. Zhou and Shunyet Jan, Bybit’s head of derivatives, also revealed that the exchange is negotiating a bridge loan with partners to restore Ethereum withdrawals. According to Jan, the platform will offer collateral from its treasury, primarily in Bitcoin (BTC) and stablecoins. However, Zhou emphasized that Bybit can fully cover the loss, noting that the exchange manages over $20 billion in assets. Bybit’s leadership urged the crypto community to remain patient amid platform congestion, reassuring users that other ERC-20 withdrawals and normal operations continue as usual. Bybit is Solvent even if this hack loss is not recovered, all of clients assets are 1 to 1 backed, we can cover the loss. — Ben Zhou (@benbybit) February 21, 2025 Read more: Safe wallet pauses certain functionalities after Bybit hack

Bybit CEO Ben Zhou confirmed in a Friday livestream that the $1.5 billion hack against his crypto exchange lost the firm the vast majority of its customers’ ETH holdings. “I believe it was around seventy percent,” Zhou told viewers, when asked how much was lost relative to the company’s ETH assets under management. “We normally keep sixty to seventy prevent in the cold wallets, and I believe this was the amount.” What Caused The Hack? The breach, first flagged by on-chain sleuth ZachXBT and other high profile accounts on Friday, saw over 400,000 Ether suspiciously leave Bybit’s cold wallet address, before rapidly being swapped its staked mETH and stETH tokens for ETH. Security experts at Cyvers told CryptoPotato that the hackers tricked those controlling the keys to Bybit’s cold wallet into signing a malicious transaction which, from the signers’ perspectives, looked honest at the time. Jack Sanford, CEO of Sherlock DeFi, had similar findings, said the transaction would have changed the rules of the multisig wallet’s smart contract to bend to the hackers’ wishes. Exact details on how the signers were fooled remain unknown. “The UI itself could have been compromised, [or] Each of these honest people could have had their actual computer compromised,” wrote Sanford. ZachXBT, a popular on-chain detective for large crypto hacks, submitted “definitive proof” on Friday that the hack was pulled off by the North Korean “Lazarus Group,” according to Arkham Intelligence. Lazarus are the most notorious hackers in the world, attacking several major crypto exchanges in the past. “TLDR myself and Josh from CF connected the Bybit hack on-chain to the Phemex hack,” said ZachXBT in response. Can Bybit Cover The Loss? Despite the seismic loss, Zhou assured followers in a tweet that all client losses remained covered by the exchange. “All client assets are 1:1 backed—we can cover the loss.” Zhou added during the stream that the exchange is reaching out to its partners in search of a “bridge loan” to support its liquidity needs as it processes “massive withdrawals” in the short term. “We actually already secured almost 80% of the Ethereum that’s been stolen as a bridge loan, to help us with the liquidity crunch.” So far, Zhou has resisted the idea of pausing exchange withdrawals. Binance co-founder Changpeng Zhao suggested that Bybit do so as a precaution – even if it spurs more fear in the market – offering his own aid if required. “1.5 billion is fear enough,” he said. “Better to be safe than sorry now.” More lightheartedly, BitMEX co-founder Arthur Hayes called on Ethereum co-founder Vitalik Buterin to “roll back the chain” to support Bybit – an action Ethereum leaders coordinated ten years ago in response to the DAO hack. The post ByBit Lost 70% Of Ethereum Holdings To Hacker, Says CEO appeared first on CryptoPotato.