Bybit CEO Ben Zhou has confirmed that the exchange's Ethereum (ETH) cold wallet has been compromised.
The popular cryptocurrency trading platform has allegedly lost $1.4 billion worth of ETH and some other tokens.
Roughly $200 million worth of stETH has been swapped on the open market for ETH.
The transaction was "musked," meaning that the attack likely involved using complicated phishing and spoofing techniques by displaying a compromised user interference (UI) to the signer. This fake UI is usually a perfect visual replica of a legitimate interface. It is similar to a fraudulent scheme with fake ATM interfaces.
As explained by the Bybit CEO, all the signers saw the musked UI, which showed the correct address and the URL from Safe.eth.
Tomiwabold OlajideAccording to Zhao, the hacker used the signing message to change the smart contract logic of the exchange's ETH cold wallet. This allowed them to take control of the specific ETH cold wallet it signed and transfer all ETH in the cold wallet to this unidentified address.
Alex DovbnyaDespite the hack, Bybit is currently processing withdrawals. The other cold wallets have not been affected, according to Zhou.
"Bybit Hot wallet, Warm wallet, and all other cold wallets are fine. The only cold wallet that was hacked was ETH cold wallet. ALL withdraws are NORMAL.," Zhou said.
Bybit has also confirmed that the exchange will remain solvent even if it fails to recover the lost funds.
Meanwhile, Binance CEO Changpeng Zhao has recommended that the exchange temporarily halt withdrawals while also offering his assistance.
"Not an easy situation to deal with. Might suggest to halt all withdrawals for a bit as a standard security precaution. Will provide any assistance if needed," Zhao said.
The price of Ethereum (ETH) has plunged by nearly 3% on the news.
Dan Burgin
Vladislav Sopov