Elsie UdohThe cryptocurrency world just got another harsh reality check with the Bybit hack. Bybit, one of the largest exchanges, suffered a massive security breach and hackers made off with $1.5 billion in Ethereum.
This incident is a reminder that blockchain projects are not so secure after all, raising serious concerns for crypto holders and traders alike.
Join our WhatsApp ChannelBut what actually happens when an exchange gets hacked? More importantly, how can you protect your assets? Let’s break it all down.
Bybit Hack: What Went Wrong?
Bybit’s security breach occurred on February 21, 2025, when attackers exploited the transfer of Ethereum from its cold wallet (offline storage) to a warm wallet (connected to the internet for daily transactions).
Cybercriminals took advantage of this process to drain about 401,000 ETH into an unknown address.
Blockchain security firms suspect the Lazarus Group, a North Korean hacking syndicate known for targeting crypto platforms, is behind the attack.
Bybit’s response?
The exchange assured users that their funds remain secure and withdrawals are still being processed.
However, market confidence took a hit, with Ethereum’s price dropping by 4% in the aftermath.
The Biggest Crypto Hacks in History
The Bybit hack is shocking, but it’s far from the first. Here’s a look at some of the worst crypto heists:
- Mt. Gox (2014): One of the earliest and biggest breaches, 850,000 BTC vanished from the now-defunct exchange.
- Coincheck (2018): Hackers stole $532 million worth of NEM tokens from this Japanese exchange.
- FTX (2022): After its collapse, $477 million mysteriously disappeared in unauthorized transactions.
Each of these incidents shows that no crypto exchange is completely safe.
READ ALSO: Five Ways Nigerians Can Protect Themselves from Identity Theft
What Happens If Your Crypto Gets Stolen?
If an exchange is hacked, here’s what happens:
- Exchange Freezes Transactions: Platforms often pause withdrawals and deposits to prevent further damage.
- Investigation Begins: Blockchain forensic experts try to trace stolen funds.
- Market Panic: News spreads, and the affected token’s price often drops.
- Partial Refunds (If You’re Lucky): Some exchanges compensate users if they have an insurance fund or reserve assets.
- Regulatory Crackdowns: Governments may tighten regulations on crypto exchanges after major hacks.
But what about individual users? If your funds were affected, can you get them back?
Can You Recover Stolen Crypto?
Unlike banks, crypto transactions are irreversible. Once your funds are gone, getting them back is difficult, but not impossible. Here’s what you can do:
- Report to the Exchange: Some platforms offer reimbursement if funds were lost due to internal security failures.
- Check for Insurance: A few exchanges, like Coinbase, have insurance that protects a portion of digital currencies held across their storage systems against losses from theft, including cybersecurity breaches.
- Follow Blockchain Trails: Authorities and security firms use blockchain analysis to track stolen funds, sometimes leading to recovery.
- Join Lawsuits: If a class-action lawsuit is filed, you may be able to claim compensation.
That said, prevention is better than cure so here’s how to protect your crypto from hacks.
How to Protect Your Crypto from Hacks
If you don’t want to be at the mercy of exchange security flaws, take these steps:
- Use a Hardware Wallet: Store long-term crypto holdings in an offline cold wallet to keep them safe from online threats.
- Enable Two-Factor Authentication (2FA): This adds an extra layer of security to your exchange accounts.
- Diversify Your Storage: Don’t keep all your funds on a single exchange. Use a mix of wallets and exchanges.
- Regularly Monitor Transactions: Set up alerts for withdrawals and large transactions on your accounts.
- Stay Informed: Follow crypto security news and updates to know about new threats.
Bybit Hack: Conclusion
Bybit’s hack is a wake-up call for exchanges to step up their defences, but at the same time, traders must take responsibility for their own security.
The next time you hear about a crypto hack, don’t just panic. Instead, use it as motivation to tighten your security measures.
Remember, your crypto is only as safe as the steps you take to protect it.
Elsie Udoh is an SEO content writer who specialises in writing engaging stories that resonates with diverse audiences. She studied mass communication at the Lagos State University.
