One of the Largest Crypto Exchange Hacks: Bybit Loses $1.46B in ETH

The crypto market has been shaken by one of the biggest exchange hacks in recent history, as Bybit suffered a staggering $1.46 billion loss from its Ethereum (ETH) cold wallet. The attack, which exploited a smart contract vulnerability, allowed hackers to take full control of the wallet and transfer its assets to an unidentified address.

The breach, confirmed by Bybit CEO Ben Zhou at 19:44 UAE time, sent shockwaves through the industry, raising concerns over security risks on centralized exchanges. However, Zhou assured users that all other cold wallets, as well as Bybit’s BTC and stablecoin reserves, remain intact. He also emphasized that withdrawals and trading are fully operational, with only ETH pricing facing minor discrepancies as market makers step in to stabilize the platform.

How the Attack Unfolded?

The exploit was first flagged by on-chain investigator ZachXBT at 19:20 UAE time, who detected suspicious outflows from Bybit. Within minutes, the attacker began swapping stolen mETH and stETH for ETH across decentralized exchanges, attempting to cover their tracks. At 20:00, ZachXBT reported that 10,000 ETH had been split across 39 different addresses, calling on exchanges to immediately blacklist these wallets to prevent further movement of funds.

Bybit later revealed that the attack was not a direct breach of private keys but rather a smart contract manipulation. The hacker masked the transaction UI, deceiving Bybit’s signers into approving a contract logic change instead of a routine transfer. This allowed them to seize control of the ETH cold wallet and siphon out the funds unnoticed.

Market Reactions and Security Concerns

The news of the Bybit hack sent immediate ripples through the market, with ETH volatility increasing as liquidity providers adjusted risk exposure. While Bybit’s BTC and stablecoin reserves remain untouched, the breach raises serious concerns about the security of smart contract-based wallet systems on centralized exchanges.

Zhou highlighted that such an exploit would not have been possible on Bitcoin, as BTC transactions do not rely on programmable smart contracts. He further reassured users that Bybit is working with global law enforcement agencies to track the stolen funds and bring those responsible to justice.

What Happens Next?

Bybit, having an in-principle approval from VARA in Dubai, has launched a full-scale security review, isolating the affected wallet to prevent further losses. The exchange has also engaged with leading blockchain forensics firms to track and recover the stolen ETH ( it represents 70% of Bybit's ETH AUM). Meanwhile, market makers are actively working to stabilize ETH trading, ensuring minimal disruption to users.

With one of the biggest exchange hacks in recent history now under investigation, the broader crypto industry is watching closely. Bybit’s next steps will be critical in determining the extent of the impact and whether any funds can be recovered. Unlock Blockchain will continue providing updates as the situation unfolds.