On February 21 night, the crypto industry was welcomed into 2025 with a whooping $1.5 Billion hack against Bybit, one of the world’s most popular crypto exchanges. The damage was severe as hackers attacked a multi-signature cold wallet of Bybit, that was guarded by a third party, and took off with 0.4 million Eth tokens.
What followed in its aftermath was a state of utter confusion and panic as market saw widespread Ethereum sell-off leading to Eth price taking a nose dive. Everyone, from industry stalwarts like CZ to Twitter (X) trolls, wrote Bybit and its CEO Ben Zhou off, claiming that the hack would literally strangle the exchange.
But Ben’s story was far from over and what transpired since then, has set a benchmark for many in the crypto industry, as to how to operate under high pressure situations, and keep the interest of one’s community at forefront.
Despite the massive setback, in less than 48 hours, Bybit under Ben Zhou, filled the gap of Eth tokens stolen, by borrowing funds from the industry and later returning them as well, whilst maintaining smooth operations of the exchange and ensuring that its customers don’t lose their funds in the hack, by maintaining a 1:1 cash reserve ratio.
The exchange showed outstanding crisis management by maintaining operational stability and reassuring users about the safety of their assets. Within hours of the hack, the exchange management started a steady flow of communication with their customers, answering their queries and concerns, and also simultaneously started freezing the stolen funds.
And now, if we compare the response of WazirX crypto exchange, that suffered a similar hack in July 2024, leading to a loss of $234.9 million, which is less than a quarter of what Bybit suffered, the difference is stark. For the past six months, the WazirX management has locked remaining funds of its 4.4 million users in India and suspended operations.
The WazirX exchange has neither communicated properly with its customers nor maintained transparency with them, even before the July 18, 2024 hack incident. The exchange management had even lied about the ownership of WazirX and tried to pass on responsibility to Binance, when it was put under a high pressure situation.
This stark difference, in response to a hack, between Bybit and WazirX, has not gone unnoticed on social media, as many users have demanded that the latter’s co-founder Nischal Shetty takes notes from Ben.
Bybit’s $1.5 billion incident is a case study for the whole crypto industry. Other crypto exchanges should learn from the Bybit case, especially WazirX. In this article, we will explain what Bybit did right during the hack and what other crypto exchanges could learn from them.
What was the $1.5 Billion Hack on Bybit?
On February 21 night, unidentified hackers gained access to a cold wallet of Bybit containing eth tokens. According to Ben, the attackers used a masked UI exploit that tricked the wallet signers into approving a malicious transaction.
The compromised transaction interface displayed the correct address and a URL linked to safe, misleading the team into unknowingly authorizing the transfer. Once signed, the hacker gained control of the wallet and moved all ETH holdings (over 400,000) to an unidentified address.
Also Read: How ByBit Exchange was Hacked & $1.5B Stolen? Understand Here
How Bybit Excelled in Crisis Management Post Hack
Despite the hack being massive, Bybit’s response to this crisis is worthy of praise. The exchange showcased their commitment and dedication to users’ satisfaction and transparency. Here are key points from their crisis management strategy.
Maintained Adequate Reserve
Bybit exchange maintained a 1:1 reserve which guaranteed the user assets were protected. Bybit’s CEO ensured all the users after the hack that their asserts were fully backed.
Communication and Transparency
Within 30 minutes of the hack the CEO Ben Zhao released a public report about the hack. After this, The exchange issued an official statement about the hack and assured all the users that their funds were safe. During the whole crisis exchange CEO and the team maintained open communication with users. This move helps them to reduce panic among the users.
Operational Continuity
Despite the hack, the exchange’s choice to continue their operations and withdrawal procedures which is praiseworthy. Within just four hours of the hack, the exchange processed over 350,000 withdrawal requests. This shows Bybit professionalism and experience in managing critical incidents
Collaborative Approach
Rather than fighting alone the exchange chooses the collaborative approach. In the first X post, Ben Zhou stated that if any team can help us track the stolen fund would be appreciated. After this various helping hands appeared from the industry including Binance’s former CEO Changpeng Zhao, Justin Sun, Gracy Chen, and more. Moreover, the exchange teamed up with several blockchain forensic experts and launched a bounty program to trace the stolen crypto assets.
Being Proactive
Bybit is already prepared for these types of incidents. The exchange secured emergency loans and large deposits highlighting that they are prepared for the potential threats.
Lessons for WazirX And Other Exchanges from Bybit
Bybit crisis management strategy serves as a masterclass for the industry. This was the first time when the industry united during a big crisis rather than running away from the rubble. And this also taught various lessons to other exchanges and companies.
In a post on X, Casey Taylor, Global Support Director at DragonFly, said ” Bybit just delivered a masterclass in crisis communications after experiencing the largest hack in crypto history. The situation is still live, but they’ve already succeeded in calming markets.”
During these types of situations, exchanges should prioritize swift action, transparency, and communication. This will increase the trust among the investors and reduce the panic and anxiety among them. Use all the social media platforms to address users’ concerns.
The second takeaway is to be prepared in advance. Always maintain strong security measures, timely audits, and updates, and maintain emergency funds and reserves. Moreover, while facing these crises always leverage industry support and expert guidance and take a collaborative approach.
How WazirX Did Horribly Wrong Post Their Hack
Bybit is now called the brightest mind for handling this situation smoothly and professionally. However, WazirX an Indian crypto exchange is getting massive criticism for handling the same situation in the very wrong way. In July 2024 WazirX faced a similar cyber hack that resulted in $234.9 million stolen assets.
After the major hack, the exchange and, co-founder Nischal Shetty didn’t take any responsibility and blamed their security partner Liminal Custody and later tried to shift responsibility to Binance. At a point of time, Shetty even blamed the crypto industry for not warning him in advance regarding the risks of storing 45% funds in a single cold wallet.
Such immature statements from exchange CEO Shetty created panic among the investors. The WazirX team didn’t address the problem properly and also lied several times. There was no sign of repayment for months. At the same time, the users are stranded, even after six months of the hack, and couldn’t utilize their funds even in the bull run.
Final Thoughts
As cryptocurrency is getting mainstream adoption, exchanges face increasingly sophisticated threats from well-funded hacking groups. Bybit’s $1.5 billion hack is another example of this.
The $1.5 billion hack could have spelled the end for Bybit. Instead, through exemplary crisis management, the exchange has emerged as a model of resilience and responsibility in the cryptocurrency sector. For users, regulators, and other industry participants, Bybit’s response offers a blueprint for maintaining trust and stability in the face of significant security challenges.
Hope someone is taking notes this time.
