Bybit’s Asset Reserves Decline Post-Hack

Bybit has experienced a significant decrease in its asset reserves, losing over $5 billion in just 24 hours following a $1.5 billion hack.

Despite this setback, the exchange’s crisis management has been widely praised by industry leaders.

Massive Withdrawals Challenge Bybit’s Stability

According to data from DeFiLlama, Bybit’s reserves decreased by approximately $5.2 billion within 24 hours. However, on-chain data confirms that the exchange retains over $11.4 billion in assets.

This drop was precipitated by an influx of withdrawal requests, surpassing 350,000 transactions. CEO Ben Zhou reported that employees worked overnight to manage the backlog and assured users that withdrawals had returned to normal operations.

> “12 hr from the worst hack in history. All withdraws have been processed. Our withdraw system is now fully back to normal pace, you can withdraw any amount and experience no delays. All Bybit functions and product remain functional, the Whole team had been awake all night to process and answer client questions and concerns,” Zhou stated.

Additionally, Bybit secured $172.5 million in emergency loans within seven hours to bolster its reserves. Blockchain analytical firm SpotOnChain indicated that the funds were sourced from several platforms, including Binance, Bitget, and MEXC.

On February 21, a security breach compromised Bybit’s Ethereum multisig cold wallet. According to Zhou, the hack resulted from a disguised transaction that shifted funds from a cold wallet to a warm wallet, giving unauthorized access to the perpetrator.

In a notable move, Bybit allowed transactions to persist post-attack, preventing widespread panic among its users—contrary to the response of many exchanges that typically freeze withdrawals.

Industry Applauds Bybit’s Response

The rapid and transparent manner in which Bybit handled the crisis has garnered commendations from prominent industry figures.

Casey Taylor, Dragonfly’s global support lead, described the exchange’s response as a “masterclass in crisis communication.” Taylor noted that Zhou addressed the situation within 30 minutes of initial public reporting, averting market speculation.

> “ByBit’s response was fast, transparent, and well-executed… instead of just reacting, they executed a playbook. The result is clear—people believed this was handled masterfully,” Taylor explained.

Guy Young, founder of Ethena Labs, echoed this sentiment, labeling Bybit’s crisis management as a benchmark for the industry.

> “Don’t think I’ve ever seen a team handle crisis communications as well as they did. Stood up to face the music immediately to provide transparent answers to the community. An example for us all to look up to,” Young remarked.

Austin Federa, co-founder of Double Zero, also commended Bybit for its rapid and transparent response. He pointed out that traditional crisis management strategies often falter in Web3 environments, making Bybit’s approach exemplary.

> “These situations are extremely hard but [ByBit] team responded quickly, with empathy, and with the facts they knew to be true…The only strategy in web3 is transparency, humility, and clarity,” Federa stated.

Reports confirmed that the Bybit hack was orchestrated by North Korea’s notorious Lazarus Group. Recovering such massive funds, particularly from a nation-state actor like Lazarus, will present significant challenges.