Bybit swiftly repays $104M loan after $1.4B hack

Bybit has repaid 40,000 Ether (CRYPTO:ETH), worth approximately $104 million, to Bitget within three days of borrowing it, following a $1.4 billion hack on February 21.

The loan was used to facilitate customer withdrawals after what has been reported as one of the largest cryptocurrency heists in history.

Blockchain investigator ZachXBT linked the Bybit exploit to North Korea’s Lazarus Group.

To maintain operations, Bybit borrowed 40,000 ETH from Bitget to handle customer withdrawals.

According to Lookonchain, Bybit received approximately 446,870 ETH, valued at around $1.23 billion, through loans, whale deposits, and asset purchases to restore its reserves.

This accounted for almost 88% of the stolen funds.

Bybit's CEO, Ben Zhou, confirmed the exploit, which occurred as the exchange was transferring tokens from an ETH multi-sig cold wallet to its ‘warm’ wallet.

Bitget CEO Gracy Chen confirmed the repayment, noting that the loan was extended without interest or collateral, emphasising support for "a peer in need."

Following the hack, investors withdrew over $5 billion on February 22.

Despite the withdrawals, Hacken, a proof-of-reserve auditor, confirmed that Bybit's reserves still exceeded its liabilities and that user funds remained fully backed.

The Bybit hack was the largest crypto exchange exploit to date.

The attackers manipulated the transaction by masking the signing interface and altering the underlying smart contract logic, enabling unauthorised access to the wallet.

The transfers sending funds to the attackers were all approved by senior Bybit staff who acted as signers.

According to CoinGecko data, ETH fell over 7% in seven hours following the hack, dropping from $2,831 to $2,629.

Further analysis suggested potential connections between the Bybit attack and past hacks on BingX and Phemex.

Security analysts suspect the stolen funds may be funneled through cryptocurrency mixing services, a tactic commonly used by the Lazarus Group to obscure transaction trails.

The exchange has offered a bounty of up to 10% of recovered tokens and publicly thanked several DeFi entities for assisting in efforts to track and freeze the stolen funds.