The Meme Coin Fade: Is the $1.46B Bybit Hack Cooling Speculative Hype

On February 21, 2025, the crypto exchange Bybit bore the burden of theft like no other in history as robbers drained $1.46 billion from one of its cold wallets.

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The incident took place during a normal internal transfer between Bybit's hot wallet and one of its offline multisignature cold wallets. Hackers manipulated the smart contract interface associated with the wallet and tricked it into approving a malicious transaction where funds would be diverted to an unknown address. In total, more than 400,000 ETH along with associated staked tokens (stETH, mETH, cmETH) were drained from the wallet.

Blockchain sleuths quickly attributed this hack to North Korea's infamous Lazarus Group, given enough overlaps to their previous hacks. Barely a few minutes after the breach, the thieves began laundering their loot, swapping hundreds of millions in stolen tokens for ETH to avoid freezes, and laundering cash through about 50 wallet addresses and exchanges to obscure their trail.

The response from Bybit was immediate and totally within hours of the occurrence, denying claims of the hack by its CEO Ben Zhou through social media assurances that other wallets remain secure, although this temporarily halted withdrawals. Amazingly, however, Bybit restored full withdrawal functionality just 12 hours later after securing emergency liquidity to meet customer demands. Zhou said every pending withdrawal has been processed and apologized for the inconvenience to users.

Behind the scenes, Bybit reportedly even lined up bridge loans from industry peers such as Binance and Bitget to shore up funds. The exchange promised a detailed incident report and new security measures to prevent future breaches. Thanks to these interventions, it averted a larger contagion or exchange run and settled fears of another FTX-like collapse. But the psychological shock to the market was already at play while Bybit set in motion its operational stabilization measures.

Meme Coins Lead the Crash as Bybit Hack Sparks Market Panic