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The crypto community is reeling from the recent $1.5 billion hack on Bybit, triggering significant withdrawal demand and market speculation.
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While CEO Ben Zhou reassured users that withdrawals remain operational, Binance’s CZ recommended a pause in activity for heightened security.
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Unfounded rumors are circulating that link Pi Network advocates to the hack, coinciding with a surprising 10% spike in the PI token’s valuation.
The Bybit hack has sparked withdrawal chaos and rampant speculation in the crypto market, with the PI token surging amid unverified rumors linking it to the breach.
Bybit Hack Leaves Crypto in Chaos
Bybit, one of the leading crypto exchanges, is navigating a dire situation after suffering a monumental $1.5 billion hack, now recognized as potentially the largest security breach in the world of cryptocurrency.
In the aftermath, both users and industry observers are left with more questions than answers. While the community is mobilizing to understand the full extent of the breach, Safe.eth, the multisig wallet provider managing Bybit’s Ethereum cold storage, has publicly denied any fault on their end.
“Safe’s security team is working closely with Bybit on an ongoing investigation. We have not found evidence that the official Safe frontend was compromised. However, out of caution, Safe {Wallet} is temporarily pausing certain functionalities. User security is our top priority, and we’ll provide more updates soon,” the firm stated.
This development raises significant concerns since it suggests that compromised authorized users may have unknowingly facilitated the exploit. If hackers manipulated Bybit representatives into approving a malicious action, they would have been able to rewrite wallet access codes and deplete assets.
“Bybit signers had malware on their endpoints. They were trying to initiate legitimate transactions, but the malware was acting like a man-in-the-middle attack, they were connecting their hardware wallet to sign,” security firm Cyvers explained to COINOTAG.
The implications of this revelation contribute to the ongoing turmoil, as previous recommendations from CZ, the former CEO of Binance, to temporarily halt all withdrawals went unheeded. Zhou, however, has attempted to reassure users, emphasizing the exchange’s financial stability.
Arkham Intelligence’s investigation revealed at least $500 million in reserves, further asserting that Bybit has the capacity to meet withdrawal demands. Zhou indicated that the exchange would resort to loans to fulfill all requests.
“Not an easy situation to deal with. Might suggest to halt all withdrawals for a bit as a standard security precaution. Will provide any assistance if needed. Good luck,” CZ expressed via X (formerly Twitter).
Pi Network Turned Bullish After Bybit’s Woes
Despite a lack of concrete evidence, speculation has arisen linking Pi Network supporters to the Bybit hack.
Following the dramatic launch of Pi Network’s mainnet and its unprecedented airdrop, the token has been surprisingly buoyant. Although Zhou expressed skepticism and previously denounced the token as a scam, interest in PI surged in the wake of the breach.
Strangely, the aftermath of the Bybit hack coincided with a nearly 10% price increase in the PI token.
In a recent livestream, Zhou acknowledged that the volume of withdrawals has reached an exceptional level, amplifying the stress on the platform’s infrastructure.
“We’ve experienced massive withdrawals since the $1.4 billion ETH hack. Even if we are experiencing a bank run, it’s not an issue. We have enough tokens to give to the clients,” Zhou commented.
Despite facing immediate pressures, Bybit is choosing not to purchase back lost assets immediately, instead relying on bridge loans while maintaining a commitment to keeping user balances secure.
Conclusion
As Bybit grapples with the implications of this historic hack, the exchange is simultaneously confronting withdrawal challenges and navigating a landscape rife with unfounded speculation. While market movements continue to unfold, it remains crucial for users to remain informed and vigilant. The exchange’s leadership aims to restore confidence, but the future trajectory of both Bybit and the broader crypto ecosystem hangs in the balance.
