On Friday, centralized crypto exchange Bybit, the world's second-largest by trading volume, fell victim to a hack that resulted in the theft of more than $1.5 billion in crypto. The hack, one of the largest in crypto history , has reignited concerns about exchange security and the vulnerabilities of centralized platforms.
"The recent breach affecting Bybit.. reinforces the risks posed by blind signing," Blockaid CEO Ido Ben Natan told TheStreet Crypto. "It's the same type of attack that was used in the Radiant Capital breach and the WazirX incident."
In 2024, the DeFi (decentralized finance) platform Radiant Capital was hit by a hack draining it of more than $50 million. Similarly, last year's attack of Indian crypto exchange WazirX saw approximately $235 million stolen by North Korean cyber criminals.
"In both [WazirX and Bybit's] cases, the attackers were able to take advantage of the gap between the interface — where operators review the transaction details and confirm to send it — and the signing device, where the actual signing takes place," Ben Natan explained. "By getting access through a cyber attack to the operator's infrastructure, attackers were able to control the signing interface and show a different transaction than the one that was actually sent to the signing device."
Despite the high-profile hack, Bybit CEO Ben Zhou reassured users that the platform was working to mitigate the impact of the hack. "We don't have plans to suspend or cancel withdrawals," Zhou said. "At the moment, we are still receiving all the withdrawal requests, and, in fact, 70% of them have been approved and processed."
However, Binance founder Changpeng Zhao, whose exchange has been hit with multiple hacks, cautioned Bybit to temporarily stop withdrawals: "$1.5 billion is fear enough. Better to be safe than sorry now."
The price of Ether has plunged dramatically in the wake of the news, dropping to around $2,655 at the time of writing.
While Bybit has maintained claims of its solvency, the event has also reignited concerns about the risks associated with centralized platforms. "The recent Bybit hack is yet another stark reminder of the risks tied to centralized platforms. 'Not your keys, not your funds' isn't just a slogan — it's a reality," said Eric Chen, co-founder of Injective.
"Every time an incident like this happens, we see a renewed migration to DeFi, as users recognize the importance of true decentralization," Chen said. "The fundamental issue remains: centralized and pseudo-decentralized platforms have little incentive to prove their solvency until it's too late."
