Key Points
- Bybit has almost fully restored its Ethereum reserves after a $1.4 billion hack.
- A new audited Proof of Reserves report will soon be released, using Merkle tree verification.
CEO and co-founder of Bybit, Ben Zhou, has shared that the exchange is once again fully supporting client assets on a 1:1 basis. He also stated that Bybit has entirely closed the Ethereum gap it experienced after the recent $1.4 billion hack.
He further revealed that an audited Proof of Reserves (PoR) report, using a Merkle tree verification method, will be released soon. This report will confirm that all customer funds are properly accounted for.
Ethereum Reserves Nearly Fully Restored
Bybit has announced that its Ethereum reserves are nearly fully restored and that deposits and withdrawals are back to normal. The exchange expressed its gratitude to the crypto community, partners, and users for their unwavering support during this challenging time.
On-chain analytics firm Lookonchain has disclosed that Bybit has obtained approximately 446,870 ETH (worth $1.23 billion) through loans, large deposits, and direct purchases. This has allowed the exchange to almost completely restore its ether holdings.
Details of the Hack
Last Friday, Bybit became the latest major crypto exchange to be targeted by hackers. Its offline cold wallets were attacked, leading to the unauthorized withdrawal of $1.4 billion in Ethereum. This raised concerns about the security of the exchange’s asset storage.
The hackers used a trick involving a fake user interface and URL to gain control of Bybit’s system. They manipulated the smart contract rules to send funds to an unknown address, then divided the stolen assets across multiple wallets and traded them on decentralized exchanges.
Blockchain investigator ZachXBT has linked the hack to North Korea’s Lazarus Group. It was further revealed that the group connected the Bybit hack to the Phemex hack by mixing stolen funds from both incidents on-chain, demonstrating a direct link between the two attacks.
However, amid the controversy, crypto commentator MartyParty claimed there was no hack. Instead, he suggested it was a cover-up for widespread corruption among major centralized exchanges tied to their leveraged Ethereum positions.
