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Security breaches have shaped the cryptocurrency industry for over a decade, forcing exchanges to evolve, users to become more cautious and regulators to tighten their oversight. From the infamous Mt. Gox collapse to a Binance security breach and FTX’s rapid downfall, history has shown that, while no platform is immune to threats, those that respond swiftly and transparently can emerge stronger than ever.
Bybit recently faced a security incident in which $1.4 billion worth of ETH and stETH were compromised, and while any breach is a serious concern, our rapid response and transparency set us apart from past incidents of crypto security breaches. Unlike the FTX collapse, in which billions of dollars disappeared in mere hours due to mismanagement, Bybit immediately secured its assets, froze affected wallets and maintained full platform operations. Funds remain backed 1:1, and users can continue to trade, withdraw and deposit without disruption.
Looking at past events, we can understand how crypto security has evolved, what lessons were learned and the next steps the industry must take in order to ensure a safer future.
Key Takeaways:
On Feb 21, 2025, Bybit experienced the crypto world’s largest hack of $1.4 billion worth of ETH and stETH, sending the entire industry into a frenzy. However, CEO Ben Zhou’s quick response in addressing the issue has made even bigger headlines, garnering the support and praise of partners and users worldwide.
Bybit’s immediate action in isolating the attack, securing user funds and maintaining full platform operations helped prevent further market disruption, reinforcing trust in its exchange and the broader crypto ecosystem.
Explore the major crypto hacks that have occurred throughout the years, and learn more about Bybit’s response to this recent hack.
In one of the earliest and most devastating crypto exchange hacks, Mt. Gox lost 850,000 BTC — valued at $450 million at the time, but worth over $36 billion today. The platform’s weak security, lack of cold storage and failure to detect suspicious transactions led to its downfall.
However, the lesson was clear: exchanges must prioritize secure wallet management, rigorous internal controls and transparency. The Mt. Gox collapse led to better industry-wide custodial practices, ensuring that no exchange could operate without proper security measures in place.
Poly Network, a DeFi protocol, suffered a hack worth over $610 million due to a smart contract vulnerability. In a surprising turn of events, the hacker returned the funds, proving that on-chain tracking and community response could play a key role in recovering stolen assets.
The attack showed that DeFi projects need more rigorous security audits and multi-signature controls to prevent exploits at the smart contract level.
Unlike most traditional exchange hacks, FTX’s downfall wasn’t due to external attackers, but rather internal mismanagement and misuse of customer funds. In just two hours, billions of dollars were withdrawn, leaving users helpless as the platform collapsed.
This event reshaped the industry by accelerating Proof of Reserves (PoR) adoption, a transparency measure that allows users to verify an exchange’s solvency. FTX’s failure highlighted the need for stricter regulations, better internal accountability, and clear asset-backing policies.
In October 2022, Binance suffered a $570 million hack after attackers exploited a vulnerability in BSC Token Hub, a cross-chain bridge used to transfer assets between blockchains. The exploit allowed hackers to move 2 million BNB tokens off the network.
Binance’s swift response helped limit the damage, with the exchange pausing the BNB Chain for several hours. This attack highlighted the risks associated with cross-chain bridges, reinforcing the need for stricter smart contract audits, real-time threat detection, and stronger validator coordination to prevent similar exploits in the future.
Each of these incidents led to major security advancements and industry-wide improvements. Now, Bybit faces its own challenge — and just like Binance and other top exchanges, we are committed to coming back stronger than ever.
The best exchanges don’t just survive hacks—they emerge stronger by adopting new security protocols, improving transparency, and prioritizing user protection.
One of the most significant changes has been the shift to cold storage dominance, where most exchanges now keep 90% or more of user funds in offline wallets to minimize exposure to potential attacks. Security audits have also become an industry norm, with regular penetration testing, bug bounty programs, and white-hat hacker collaborations helping to identify and fix vulnerabilities before they can be exploited.
User protection funds, like Binance’s SAFU, have set a new standard for ensuring users don’t bear the cost of security breaches. AI-powered fraud detection and real-time transaction tracking have also become essential tools for identifying suspicious activity before it escalates.
Beyond individual exchange improvements, the broader industry has adapted by introducing regulatory changes. Proof of Reserves (PoR) has become a key transparency measure, allowing users to verify an exchange’s solvency. Licensing requirements and exchange accountability frameworks have also become more stringent, making it harder for bad actors to operate unchecked.
The way an exchange responds to a security incident defines its long-term reputation and user trust. Over the years, some platforms have struggled to manage hacks transparently, while others have turned crises into opportunities in order to strengthen security. Bybit’s comprehensive response to this incident demonstrates our commitment to transparency, operational resilience and user protection.
Speed of response is one of the most critical factors in mitigating damage during an attack. Bybit acted immediately, isolating affected wallets and preventing further losses. Unlike past crypto incidents, in which breaches went undetected for hours or even days, Bybit’s security teams responded in real time. Our ability to contain the situation quickly is a testament to our proactive monitoring systems, robust security protocols and dedicated cybersecurity team.
Many users lose confidence in exchanges when there’s a lack of clear communication during a crisis. From the start, Bybit has maintained full transparency, providing regular updates to reassure users that their assets remain secure and backed at a 1:1 ratio.
Rather than delaying information or releasing vague statements, Bybit has been upfront about the incident, outlining the precise steps taken to contain the breach and reinforce security. This level of openness is crucial in maintaining user trust, and sets a new industry standard for responsible crisis management.
One of the primary concerns during an exchange hack is whether users will face withdrawal restrictions or see trading halted. Bybit ensured that trading, deposits and withdrawals remained fully operational throughout the incident.
This highlights our exchange’s financial strength and liquidity, ensuring that user funds weren’t affected. No restrictions were placed on withdrawals, and all assets remained backed 1:1.
Bybit isn’t just focused on resolving the immediate issue: we’re already using this incident as a catalyst to further enhance security across the platform. While we already implement industry-leading security measures, we’re actively working with top blockchain security firms to audit our systems and implement even more advanced security solutions.
Bybit remains financially strong, with all user funds fully backed and secure. Our commitment to industry-leading security practices, user transparency and rapid response times ensures that we will emerge from this incident stronger than ever.
As the crypto industry continues to evolve, Bybit is setting a new standard for how exchanges should handle security challenges — with transparency, operational resilience and an unwavering commitment to user protection.
While exchanges continue to improve security, users must also take proactive steps to safeguard their assets. The following are ways you can strengthen your crypto security.
Always activate a two-factor authenticator or SMS-based 2FA to add an extra layer of protection. This prevents unauthorized access, even if your password is compromised.
Use withdrawal whitelisting to ensure only pre-approved wallet addresses can receive funds. This minimizes risks from phishing scams or unauthorized transactions.
If you’re holding large amounts of crypto, consider hardware wallets, such as Ledger or Trezor. Unlike exchange hot wallets, cold storage keeps assets offline and safe from cyberattacks.
Hackers often exploit major security incidents by impersonating exchange support teams. Always make sure to take the following precautions:
Double-check URLs before logging in
Ignore unsolicited messages asking for personal details
Verify updates through Bybit’s official channels
Enable transaction alerts in order to receive real-time notifications for any account activity. Report any suspicious actions immediately to Bybit support. By following these best practices, you can further protect your assets even during uncertain times.
The Bybit incident reinforces the need for continuous security improvements across the industry. Moving forward, we can expect the following developments in terms of advanced security.
Regulators may push for mandatory insurance funds to protect users in the event of security breaches. Additionally, exchanges will be expected to adopt stronger internal controls and more frequent security audits.
To combat sophisticated attacks, exchanges will likely invest in AI-driven risk monitoring that detects anomalies before a hack can escalate.
Users will demand real-time asset verification to ensure their funds are secure. Bybit remains committed to maintaining full backing of user assets and transparent operational updates.
More exchanges may introduce hybrid custody models, so that users can trade while maintaining partial self-custody of their assets.
One of the most powerful takeaways from this incident has been the overwhelming support from our partners, users and industry leaders. As soon as the news broke, top security firms, blockchain analytics teams and exchange partners reached out, offering their expertise and assistance to track the stolen assets and enhance security.
We are incredibly grateful for the outpouring of support from our community. Crypto has always been an industry built on resilience and collaboration, and this event has reinforced the reality that when one exchange is attacked, the industry stands together to protect users and strengthen security.
Bybit would like to extend a heartfelt thank-you to our partners, users and the broader crypto ecosystem for standing with us during this time. Your trust, patience and unwavering support fuel our commitment to come back stronger, set new security benchmarks and continue to provide a safe and innovative trading experience.
Despite this setback, Bybit remains one of the strongest and most well-respected exchanges globally. Our response to this incident proves that:
We prioritize security above all else — funds remain backed 1:1.
We act fast — immediate action contained the threat.
We’re transparent, with CEO Ben Zhou conducting a live AMA (“Ask Me Anything”) within hours of the incident, addressing users’ concerns and reassuring them that their funds are safe. We’ve also been providing live updates on our official channels so that more users are aware of what’s going on.
We are financially strong — all operations are continuing to run without disruption.
We will emerge stronger — this incident will lead to even greater security improvements.
Bybit’s journey doesn’t end here. We will continue to improve, evolve and set new security standards for the industry.
The crypto space must learn from every challenge, and with greater security, transparency and resilience, we can build a safer, more trustworthy future for all users.
The road ahead is clear — Bybit is here to stay, and we are stronger than ever.
For real-time updates, please refer to our official channels, such as the Bybit Announcement page, Bybit’s official X page and CEO Ben Zhou’s official X page.
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