Bybit Unveils New Proof of Reserves Audit Following Major $700M ETH Acquisition

Bybit has made significant strides toward restoring confidence among its users after a staggering $1.4 billion hack. The popular crypto exchange recently conducted a new Proof of Reserves audit—now confirming that it is 100% liquid—after strategically purchasing a substantial amount of Ethereum (ETH) from the OTC markets.

Key Recovery Moves Post-Hack

• Massive ETH Purchase:
  In a decisive recovery effort, Bybit acquired 266,694 ETH valued at approximately $746 million. This move is part of a broader strategy that includes plans to buy an additional $700 million worth of ETH to help close the deficit and repay outstanding loans.
• Utilizing Past Profits:
  Last year’s profits, estimated to be between $900 million and $1.5 billion, are believed to have played a crucial role in funding these recovery measures. These profits provided the financial backing needed to secure ETH loans from platforms such as Bitget, MEXC, and support from prominent whales.

Details of the Cyber Attack

The breach, which occurred last Friday, involved a sophisticated phishing attack that compromised Bybit’s cold wallet user interface. Hackers tricked wallet controllers into approving a fraudulent transaction, ultimately siphoning off $1.4 billion in Ethereum and staked ETH. Notably, the Lazarus Group—infamous for previous high-profile hacks including the $625 million Axie Infinity incident—was implicated in this operation.

Assurance Through Audit and Transparency

To dispel concerns and rebuild user trust, Bybit initiated an on-chain Proof of Reserves audit conducted by the independent firm Hacken. During this process, the exchange was required to move a portion of its crypto assets to designated wallets, demonstrating that every client asset is fully backed. The upcoming audit report is expected to provide clear evidence that Bybit has closed the liquidity gap caused by the hack.

The Evolving Landscape of Crypto Security

The Bybit incident serves as a stark reminder of the vulnerabilities that even well-established centralized exchanges face in today’s cybersecurity landscape. With cyber threats becoming increasingly sophisticated, many experts are urging users to consider self-custody solutions to safeguard their digital assets.

Moving Forward

Bybit’s proactive measures—including the recent ETH purchase and the forthcoming detailed audit report—highlight its commitment to transparency and robust security. As the exchange works to return to normal operations, the broader crypto community is watching closely to see how these efforts will restore confidence in centralized exchanges.

For the latest updates on this developing story and expert insights into crypto security, stay tuned to our news coverage.

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