Around 12 o'clock on February 21, I was sitting with my legs crossed, humming a little tune and watching the local dog.
A local dog named BYEBIT (meaning bybit byebye) came into view and surged 7X in a short period of time. I felt confused at the time and did not realize that I was experiencing the largest theft in the history of encryption.
As community members supplemented information and external information fermented, we learned that 514,000 ETH worth approximately US$1.429 billion were stolen from the ETH multi-signature cold wallet of Bybit, the world's second largest cryptocurrency exchange by trading volume.
After that, the hacker dispersed 490,000 ETH to 49 addresses, with 10,000 ETH in each address. 15,000 cmETH was intercepted when the hacker unpledged it, and it may be recovered.
The stolen assets account for nearly 9% of Bybit’s $16.2 billion in reserve assets.
Subsequently, public opinion fermented, and both various groups and KOLs on X called for the withdrawal of coins as soon as possible.
In fact, the simple loss of assets is not fatal to the leading exchanges. When CZ was fined 4 billion US dollars, Binance remained as stable as an old dog. More than one billion US dollars is just the annual profit of Bybit according to industry rumors.
The most fatal thing is the collapse of user confidence and panic runs on the banks. This is how FTX, which was once the most popular exchange, collapsed. This is the core reason for the collapse of all exchanges due to thefts in history.
In the early years, closing withdrawals for security reasons was a basic operation, and some exchanges tasted the sweetness. Once withdrawals were banned, the U in the market was cut in half. At this time, the big exchanges could buy cheap assets off-market to deal with the crisis, and in the end the losses were paid by the leeks who panicked and sold their shares.
However, the market is not dead, it has memory, and any crisis response strategy must be adapted to the circumstances. This crisis was handled very well by Bybit, and there were no withdrawal issues. The industry was also relatively united, and there was no situation of everyone pushing down the wall when it fell. It is highly likely (I cannot say for sure) that this wave of crisis can be safely resolved.
There is no absolute security in the crypto world or in other words, assets on the Internet. For retail investors, dispersing assets across several large exchanges is still the best option, because even if they are stolen, there is a high probability that they will be compensated.
Once a crisis occurs in an exchange, individuals can withdraw their funds if they can, but there is a high probability that nothing will happen if they cannot. This is provided that the exchanges are large and small, while fake small exchanges may run away at any time and will make up a story that their funds were stolen and run away.
If you put it on the chain yourself and your private key or mnemonic phrase is leaked or stolen, it will be completely gone.
Decentralization is both a success and a danger. The same underlying logic applies. Assets cannot be censored or frozen, which means they cannot be recovered if stolen. Therefore, the crypto world is also nicknamed the Dark Forest.
In daily life, don’t click on random links, don’t authorize randomly, don’t be petty, and don’t disclose your private key mnemonics to others in any way.
Crypto assets do not recognize people and cannot be cultivated. Whoever controls the private key or mnemonic phrase has complete control over it. This is completely different from house deposits in real life.
Complete freedom means complete responsibility.
If you are a little careless, all your efforts will be in vain.
Subscribe to this account to get continuous updates
Related reading:
$Pain took 6 times, pyth went grayscale, it's working again
Bitcoin is garbage, the meme behind pumpfun is creating a hundredfold wealth
The 2025 crypto bull market is still here, and Trump’s dividends are fermenting
