Heist highlights concerns over crypto industry security
Anyone who owns crypto may well be feeling a little nauseous after the biggest ever theft of funds by hackers.
Bybit is the second largest cryptocurrency exchange. It would have had careful security protocols.
And yet somehow their systems were penetrated and an as-yet unidentified individual or group made off with around £1.1 billion in assets.
The breach happened while the company was making a routine transfer of Ethereum, the second largest cryptocurrency after Bitcoin, from its offline “cold” wallet to top up its “warm” wallet that covers daily trading.
The transfer needed multiple checks and signatures before it went ahead. Yet the attackers seem to have masked the true destination of the funds, and they vanished.
Forensic investigators are trying to trace the assets, and perhaps even recover them.
They’ll also be looking at how hackers were able to penetrate the company’s security.
Firewalls are increasingly sophisticated, holding hackers at bay. So instead criminals often turn their attack on humans. We are the weak point, vulnerable to social engineering and phishing.
The latest heist underscores concerns about the security of the cryptocurrency industry.
According to blockchain analysists Chainalysis there were 303 hacking incidents in 2024, with assets worth $2.2 billion stolen.
Bybit says clients’ money is covered, either by its other assets or loans.
But many people will be uneasy, particularly as crypto platforms are largely unregulated, unlike banks. And there are no guarantees of people getting their money back.