Bybit, one of the world's largest cryptocurrency exchanges, has confirmed a massive security breach resulting in the loss of approximately $1.5 billion worth of tokens. The hack, which analysts are calling the largest in the history of cryptocurrency, is suspected to be the work of North Korean hackers.

The attack targeted one of Bybit’s offline Ethereum wallets, according to CEO Ben Zhou, who made the announcement in a post on X (formerly Twitter). Blockchain analysts first detected suspicious transactions, with around $1.46 billion in assets flowing out of the wallet. Arkham Intelligence later confirmed that approximately $1.4 billion was siphoned from the exchange and moved to new addresses, where the stolen funds are now being sold.

This incident surpasses the $611 million stolen from Poly Network in 2021, marking a new record in crypto theft. Rob Behnke, co-founder of blockchain security firm Halborn, described the hack as "the largest incident ever, not just in crypto but in cybersecurity history."

In response to the crisis, Zhou addressed the public via livestream on X, reassuring users that their funds remained safe and that withdrawals were still operational. Bybit has secured bridge loans with partners, covering around 80% of the lost funds, while actively working to recover the stolen assets. The company also plans to take legal action against the perpetrators.

Despite the security breach, Bybit has processed over 70% of withdrawal requests. Zhou clarified that the platform is not currently purchasing Ethereum to cover the stolen assets.

Founded in 2018, Bybit has grown into a major crypto exchange, processing over $36 billion in daily trading volume. The Dubai-based platform saw a surge in market share following the collapse of FTX, offering traders innovative margin trading solutions.

The stolen funds primarily consisted of $1.12 billion worth of Ethereum, with the rest being Ethereum derivatives, according to blockchain research firm Nansen. The stolen assets were initially funneled into a single wallet before being dispersed across 40 different addresses. The hacker then converted Ethereum derivatives into Ethereum and transferred the tokens in $27 million increments to more than 10 separate wallets. A significant portion of the stolen assets remains in these wallets.

Blockchain intelligence firm Arkham Intelligence has attributed the attack to the North Korean hacking group Lazarus, citing evidence provided by crypto researcher ZachXBT. This group has been linked to several high-profile crypto heists in the past, including attacks on WazirX and Radiant Capital.

Shahar Madar, VP of Security at Fireblocks, noted that the attack methods used against Bybit are similar to those seen in previous North Korean-led hacks, suggesting a highly sophisticated and organized cybercriminal operation.

The attack had immediate market repercussions, with Ethereum dropping nearly 8% and Bitcoin falling 5%. Ethena Labs’ USDe, a synthetic stablecoin, briefly lost its peg, trading at around 98 cents before recovering. Ethena Labs reassured investors that the project remains fully collateralized despite conducting some trading on Bybit.

Bybit's breach serves as a stark reminder of the ongoing vulnerabilities in the crypto sector, underscoring the need for stronger security measures across digital asset platforms.