Key Takeaways
- Bybit, one of the most prominent crypto exchanges, faced a security breach recently that resulted in the theft of $1.5 billion worth of crypto assets.
- mETH protocol has announced that they managed to recover over $43 million worth of crypto assets, concerning the Bybit hack.
- Tether CEO Paolo Adroino has also announced that about 181K USDT was frozen as part of the early recovery procedure.
Bybit $1.5 Billion Heist
On the 21st of February 2025, Bybit, one of the most prominent crypto exchanges, faced a security breach that resulted in the theft of $1.5 billion worth of crypto assets sending a huge shockwave across the crypto sector. Based on the early investigation, the culprits behind this daring heist are suspected to be the Lazarus group, a government-sponsored hacking group allegedly linked to North Korea.
The heist was executed with utmost precision and efficiency and the attackers didn’t even raise any red flags until it happened, stealing over 401,347 ETH with significant amounts of staked Ethre, MegaETH, and other tokens. The incident has also resulted in many people raising concerns regarding the security system employed by exchanges to safeguard its users’ assets.
mETH Recovers $43 Million Worth cmETH Tokens
Mantle’s liquid staking protocol, mETH protocol released an in-depth analysis of the hack as soon as it was made public. Per their report, about 8K mETH were swapped through 3 separate decentralized exchanges across the crypto sector, and 15K withdrawals were initiated through its protocol. However, suspecting the connection to the recent hack, the protocol did not allow the transaction to take place, thwarting the plans of the hackers.
If not for the various high-end security measures employed by the protocol, especially the 8-hour withdrawal delay, the hackers could have easily gotten away with the stolen funds. This has resulted in the 15,000 cmETH, worth about $43 million to be retrieved successfully. The protocol has also been able to blacklist the preparator’s address.
The recovery was initiated under the leadership of Mudit Gupta, chief security of Polygon, through the assistance of SEAL. Gupta later specified in his X post that he “saw the recovery possibility soon after the hack and SEAL connected me with Mantle/mETH team who made it happen”. This recovery has also made him eligible for a $4.3 million reward by Bubit for assisting in the recovery procedure.
Bybit Issues A Recovery Bounty
To improve the effectiveness of the recovery of their $1.6 billion worth of stolen assets, Bybit has announced an offering of 10% of the recovery fund, amounting to about $140 million to any on-chain security experts who help them in the recovery process by providing valuable information and other data.
Through his X account, Bybit co-founder and CEO Ben Zhao also conveyed that they “want to officially reward the Bybit community who lent their expertise, experience, and knowledge through the Recovery Bounty Program, and their efforts to make this difficult lesson a valuable one does not stop here”.
Furthermore, Ben Zhao specified that they got information signaling suspicious activities regarding their stolen funds. Per these, the bybit CEO stated that the hackers had moved some funds to Chainflip.io to convert them to BTC. He also issued an SOS to any bridges that can stop these transactions or freeze the assets to assist them in doing that.
Tether Freezes $181K
Soon after the news regarding the Bybit hack and the subsequent bounty program hit the crypto sector, many people came forward to assist them. Tether CEO, Paolo Ardoino is one such person. On the 22nd of February 2025, he announced that about 181K USDT was frozen as part of the early recovery procedure after the hacking incident.
He also stated in his X post that even though it might not be much, it’s still honest work and assured the crypto community that he will keep monitoring the network for suspicious activity in correlation with the bybit hack. This recovery has secured 10% of the recovered amount, $18,100 for Tether and its team.
Can The Bybit Stolen Assets Be Recovered?
Even though many projects have undertaken efforts to freeze the stolen ETH, it still might not be enough. This is mainly because most of the stolen funds are in native Ethereum. But there is still a chance to recover the stolen asset but it is highly unlikely to happen as it involves conducting a rollback.
There was once an earlier occasion in 2016 that this was done following a DOA (Decentralized Autonomous Organization) hack. However, in this case, there is little to no chance of it happening as it would need the consensus of the miners, nodes, and the community, making the recovery of the ETH a big hassle for the prominent exchange.
Even with all this said, if the hackers convert the ETH into any ERC-20 token, there is still a chance for the underlying projects to freeze funds should their contract permit it. For further updates surrounding the matter, stay tuned.
