The post Reasons Behind the Breach and How It Affects the Crypto Market appeared on BitcoinEthereumNews.com.

Bybit Hack Update: Bybit cryptocurrency exchange is facing a severe security incident that has left the crypto community concerned. The Bybit hack, which involved the compromise of a multi-signature cold wallet, has resulted in significant financial losses. After 1 hour of the Bybit hack, a net outflow of $700 million was reported, following the initial breach of $1.4 billion in ETH from Bybit’s cold wallet. The exchange’s founder, Ben Zhou, has provided updates on the situation, assuring users of the platform’s financial stability. However, the hack’s broader impact on the crypto market continues to unfold. Reasons Behind the Bybit Hack  The Bybit hack began with the deployment of a malicious implementation contract on February 19, 2025. Blockchain security firm SlowMist outlined how the attacker used sophisticated methods to exploit vulnerabilities in the exchange’s system. The hacker manipulated the contract by replacing a legitimate multi-signature wallet contract with a malicious one. This manipulation allowed the attacker to gain control over the Ethereum cold wallet used by Bybit, which held a significant amount of ETH. According to reports from SlowMist, the attacker used backdoor functions in the malicious contract to drain the wallet. These backdoor functions, “sweepETH” and “sweepERC20,” allowed the hacker to transfer large amounts of ETH to an unidentified address. The malicious contract also involved multiple signatures, which masked the attacker’s actions, making it harder to detect. Ben Zhou, the founder of Bybit, has addressed the situation on x, confirming the breach and emphasizing the impact on Bybit’s cold storage. He stated that the ETH cold wallet was the only one affected, while other wallets remained secure. Zhou also assured customers that their funds were not at risk. However, as the investigation continued, the breach caused widespread concern about the security of cryptocurrency exchanges. Bybit Founder Ben Zhou Responds To…

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Filed under: News - @ February 22, 2025 6:18 am