The centralized crypto exchange Bybit was hacked for $1.4 Billion in Ethereum which was around 70% of the Ethereum reserves of the company. The first reaction of the market is to sell the cryptocurrencies held to stay in the stablecoins while the risks were possible for the other coins, as well.
Although the rumors were circulating, the reality was revealed directly by the CEO and the social media managers of the CEX. Ethereum wallet was the only one affected and the multi-sig cold wallet was targeted by a group of people while transferring the funds to the hot wallet of the exchange.
Currently, the cryptocurrencies are swinging around 1% to 10% loss in a day due to the devastating amount of money stolen.
Is Bybit Solvent?
Considering the numbers, yes.
The stolen money was around 8% of the centralized exchange and also it was around the amount that Bybit makes profit in a whole year. The withdrawals are actively going on even though it might be slower than usual because of the demand by thousands of people at the same time.
The other centralized exchanges announced that they are following the case closely to prevent the hacker using the other exchanges to sell the stolen money. Also, Bybit is going to utilize some bridges to buy some OTC Ethereum so as not to cause volatility in the market.
What's Next for the Crypto Ecosystem?
This is a stress test for the market. If Bybit can handle this process smoothly (which is more likely regarding its size and the cooperation the CEXs and market makers are in), we can expect more courageous investors with more faith in the cryptocurrencies they want to keep in their portfolio.
If Bybit handles this case, the company has to buy Ethereum to cover the user funds stolen. The more the company buys Ethereum, the greener the market will be. This snowball effect can be triggered easily.
I think the second scenario, the positive one, is likely to happen. The volatility this week can be tolerated to focus on the better times in the market.
What do you think about the stolen Ethereum funds on Bybit?
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