Bybit Remains Solvent After Historic $1.5 Billion Hack

Bybit Remains Solvent After Historic $1.5 Billion Hack

On February 21, hackers stole $1.5 billion worth of Ethereum from Bybit's cold wallet, marking the largest crypto exchange breach in history. The Dubai-based platform reassured customers that all assets remain 1:1 backed, with CEO Ben Zhou stating, “Bybit is solvent even if this hack loss is not recovered.”

Despite the attack, Bybit processed over 580,000 withdrawals, demonstrating strong liquidity and operational resilience. The company immediately launched a recovery bounty program, offering 10% of retrieved funds (potentially $140+ million) to security researchers.

Bybit’s forensic team is tracking stolen assets in real-time, while security firms linked the attack to North Korea’s Lazarus Group. Blockchain experts, including ZachXBT, identified 920+ laundering addresses, leading to partial fund recoveries of $43.5 million in cmETH and $181,000 in USDT.

With a $20 billion asset base, Bybit has committed to strengthening security infrastructure and reinforcing liquidity to prevent future breaches. Zhou also commented, “This was truly a tragic event for Bybit, but the industry showed strength, united together. I have faith that it’s only up from now.”

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Ethereum Dismisses Rollback Proposal After Bybit Hack

Following the $1.5 billion Bybit hack, some industry figures, including BitMEX co-founder Arthur Hayes, called for an Ethereum rollback to recover stolen funds. However, Ethereum core developer Tim Beiko dismissed the idea, stating, “This reasonably sounding proposal is technically intractable for less knowledgeable observers.”

Unlike the 2016 DAO hack, which involved a built-in failsafe, the Bybit breach saw instant transfers, making reversal impossible without massive network disruption. Ethereum’s interconnected DeFi ecosystem and rollups mean a rollback would impact thousands of unrelated transactions, potentially causing greater financial losses than the hack itself.

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SEC to Dismiss Coinbase Lawsuit, Signals Industry Reset

SEC has agreed in principle to dismiss its lawsuit against Coinbase. The case, which accused Coinbase of operating as an unregistered broker and exchange, has cost the company millions in legal fees since it was filed in June 2023. “There will be no settlement or compromise—a wrong will simply be made right,” said Coinbase Chief Legal Officer Paul Grewal.

With the SEC’s political leadership shifting under a pro-crypto administration, the agency is moving away from aggressive enforcement. Coinbase CEO Brian Armstrong credited the change to the administration’s stance. Coinbase stock jumped 5% to $270 in pre-market trading, as investors reacted to the end of a legal battle that threatened the exchange’s operations.

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SEC Ends OpenSea Probe as Crypto Stance Softens

The SEC has officially dropped its investigation into OpenSea, months after issuing the NFT marketplace a Wells Notice over alleged unregistered securities violations. This and the Coinbase story signal a regulatory shift under Acting Chairman Mark T. Uyeda. “SEC confirmed that it doesn’t recommend an enforcement action against OpenSea,” the company stated.

With Hester Peirce leading a new crypto task force, the SEC appears to be reevaluating its approach, engaging with firms on airdrops, staking ETFs, and regulatory clarity. As Congress and the SEC shift toward clearer policies, OpenSea’s SEA token airdrop will now be available to U.S. users without regulatory concern.

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Data of the Day

Despite a three-day sell-off, BlackRock’s iShares Bitcoin Trust (IBIT) now controls 50.4% of the U.S. Bitcoin ETF market, holding $56.8 billion in BTC. The ETF sector, which collectively manages $112 billion, has seen $364 million in net outflows, with BlackRock alone accounting for $112 million in withdrawals on February 20.

Bitcoin’s price remains resilient, hovering near $95,800, as institutional demand continues to support long-term growth. Since launching in January 2024, spot Bitcoin ETFs have become a dominant investment vehicle, contributing to 75% of Bitcoin’s recent upward momentum.

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More Breaking News

• Sam Bankman-Fried praised Trump and criticized Biden in his first prison interview, seeking a presidential pardon while claiming FTX was solvent but illiquid.
• Ethena assured users of its solvency after Bybit's $1.4 billion hack, stating that its USDe stablecoin’s exposure was offset by its reserve fund.
• Kanye West sparked controversy with erratic crypto posts, announcing plans to launch a token called 'Swasticoin' next week.
• Michael Saylor hinted at another Bitcoin purchase as Strategy continues its aggressive accumulation following a $2 billion convertible note offering.
• Franklin Templeton has filed for SEC approval of a Solana ETF that includes staking, reflecting growing institutional interest in proof-of-stake assets.
• A Florida woman faces fraud charges and potential deportation after allegedly stealing $850,000 worth of the TRUMP meme coin from her ex-boyfriend.
• Arkham Exchange will begin offering spot crypto trading in 17 US states on March 1, challenging Coinbase and Crypto(dot)com’s market dominance.

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