Bybit, one of the largest cryptocurrency exchanges, has witnessed a record "bank run" of more than $4 billion following a hack that caused it to lose about $1.5 billion in ether. The hack, which is thought to have been carried out by North Korea's Lazarus Group, caused an outpouring of withdrawals as users scrambled to withdraw their funds from the exchange ¹.
The exchange experienced total withdrawals of more than $5.5 billion, with users taking out approximately 50% of the funds deposited on the platform, Bybit's CEO, Ben Zhou, said. The exchange had to take out a loan to fund the withdrawals since the hackers had stolen about 70% of the exchange's ether reserves ¹.
The hack has sparked fears over the security of cryptocurrency exchanges and the possibility of massive thefts. Bybit said it is cooperating with authorities and blockchain analysis companies to locate the stolen funds and catch the culprits.
After the hack, the CEO of Bybit has been busy trying to calm users down and regain the confidence of users in the exchange. Zhou declared that the exchange holds reserves sufficient to cover withdrawals and is also taking measures to strengthen its security protocols.
The hack has also raised questions of whether or not the Ethereum blockchain can be "rolled back" to regain the stolen money. This concept has been challenged by some experts, however, who say it would be a complicated and possibly controversial process ¹.