Record-Breaking £1.1bn Cryptocurrency Heist Shakes Industry.
Cryptocurrency exchange Bybit has reported that hackers have stolen $1.5 billion (£1.1 billion) in digital assets, potentially marking the largest theft in the history of cryptocurrency.
The founder of the Dubai-based company reassured users that their funds remain "safe" and that the firm would compensate those impacted by the incident.
The breach involved the theft from Bybit's digital wallet for Ethereum, which is the second most valuable cryptocurrency after Bitcoin.
Ben Zhou, the founder of Bybit, indicated that the stolen funds could be reimbursed either through the company's resources or via a loan from its partners. The firm currently manages assets totaling $20 billion (£15 billion).
Bybit reported that the hackers took advantage of vulnerabilities in security protocols before transferring the stolen funds to an unknown address.
Following the incident, the price of Ethereum experienced a decline of approximately 4% on Friday, bringing its value down to $2,641.41 (£2,090) per coin.
This theft surpasses the previous record for cryptocurrency theft, which was a $620 million (£490 million) heist involving Ethereum and USD Coin from the Ronin Network in 2022.
Founded in 2018, Bybit has reportedly attracted early investments from notable figures, including former US President Donald Trump and ex-PayPal CEO Peter Thiel.
RELATED: Bitcoin Stocks Surge as Crypto Rallies Before Trump Inauguration.
The exchange claims to have over 60 million users globally and provides access to a wide range of cryptocurrencies.
"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," Mr Zhou added.
The company announced in a statement on X that it had notified the authorities regarding the incident and was working "swiftly and thoroughly" to track down the hackers.
Cryptocurrencies have gained traction among investors, yet they have also generated controversy, as many argue that their value is solely speculative, making them susceptible to manipulation.
Recently, Donald Trump faced criticism for introducing his own digital currency while admitting that he "doesn't know much" about cryptocurrencies.
The digital coin, named TRUMP, surfaced on his social media platforms prior to his inauguration and rapidly became one of the most valuable cryptocurrencies, although it has since experienced a significant decline in value.
This situation underscores the security issues prevalent in the digital currency market, which was seeking to regain trust following Mr. Trump's coin launch. His advisor, Elon Musk, a multi-billionaire and owner of Tesla, has previously expressed support for Bitcoin.
In 2014, the cryptocurrency exchange Mt. Gox declared bankruptcy after $350 million (£210 million) worth of digital assets were stolen due to a security loophole.
In 2019, hackers executed another significant cryptocurrency theft, stealing $41 million worth of Bitcoin from the Binance exchange.
This massive theft highlights the ongoing security vulnerabilities in the cryptocurrency market, raising concerns about the safety of digital assets. While Bybit has reassured users that their funds are secure, the scale of the breach underscores the need for stronger protections and regulatory oversight.
The incident also impacts investor confidence, especially as cryptocurrencies strive for mainstream legitimacy. With past hacks still fresh in memory, the industry must prioritize security innovations to prevent future breaches. As authorities investigate, users and exchanges alike must remain vigilant, as cybercriminals continue to exploit weaknesses in this rapidly evolving financial landscape.
