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On February 21, 2025, attackers drained approximately $1.46 billion in cryptocurrency from one of Bybit’s Ethereum multisignature cold wallets. The theft began with a routine transfer, but malicious code manipulated what the wallet signers saw and approved through the Safe wallet-management environment. The incident was widely reported as the largest publicly reported crypto theft at the time.
The attackers did not necessarily break an offline private key. Instead, the publicly described attack compromised the transaction-approval process, changed the wallet’s smart-contract logic, and then redirected the funds. Independent blockchain investigators linked the laundering activity to Lazarus-associated infrastructure; on February 26, 2025, the FBI attributed the theft to North Korea-linked actors.
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The short version
Bybit initiated a normal transfer of ETH from cold storage to a warm wallet. Signers reviewed what appeared to be an ordinary transaction in the Safe interface and approved it. According to published forensic accounts, malicious code caused that transaction to alter the underlying logic of the Safe smart-contract wallet. The attacker then used the changed logic to drain approximately 400,000–401,000 ETH and related liquid-staking assets, including stETH, cmETH and mETH.
Bybit valued the loss at about $1.46 billion at the time. Chainalysis described the stolen amount as approximately 401,000 ETH, while the FBI later rounded the theft to approximately $1.5 billion. The dollar figure is a point-in-time valuation, not the current value of the assets.
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Bybit said it remained solvent and that customer assets were backed one-to-one. That is different from proving that the original stolen coins were fully recovered. The sources available for this article establish ongoing tracing, laundering analysis, recovery efforts and later reserve reporting, but not full recovery of the stolen assets.
What was stolen?
| Detail | What is publicly established |
|---|---|
| Date | February 21, 2025 |
| Affected wallet | One Bybit Ethereum multisignature cold wallet |
| Assets | Approximately 400,000–401,000 ETH, plus stETH, cmETH and mETH |
| Reported value | Approximately $1.46 billion at the time of the theft |
| Initial transfer | Bybit’s timeline says the routine transfer involved 30,000 ETH |
| Suspected perpetrators | Lazarus Group/DPRK-linked actors, according to investigators and the FBI |
Bybit’s incident timeline and FAQ provide the exchange’s account of the affected wallet and asset mix. The terms “$1.46 billion” and “$1.5 billion” describe the estimated value when the theft was reported; cryptocurrency prices can change the value substantially afterward.
How the Bybit cold-wallet attack worked
The useful distinction is between stealing a private key and subverting the system that prepares and approves a transaction.
- Routine transfer: Bybit prepared a transfer from an Ethereum cold wallet to a warm wallet used for operational liquidity.
- Deceptive display: The Safe wallet-management interface showed the signers a transaction that appeared legitimate.
- Multiple approvals: The authorized signers approved the transaction through the normal multisignature process.
- Logic change: According to the published forensic descriptions, the transaction altered the implementation or logic governing the Safe proxy wallet.
- Wallet drain: The attacker-controlled logic enabled the subsequent transfer of the wallet’s assets to attacker-controlled addresses.
- Laundering: The funds were dispersed across thousands of addresses and progressively converted into other cryptoassets and moved across blockchains.
In simplified form, the attack chain was:
Compromised wallet-management environment → manipulated transaction display → signer approvals → Safe logic change → asset drain → cross-chain laundering
This is why describing the event only as “a hacker broke an offline wallet” is misleading. The publicly described failure occurred across the transaction-construction, transaction-display and approval chain.
What changed inside the wallet?
A Safe wallet is a smart-contract wallet. Its behavior depends not only on the familiar wallet address but also on the contract logic that controls how approvals and execution work.
Published forensic descriptions indicate that the malicious transaction changed the implementation or logic associated with the Safe proxy wallet rather than merely changing a visible recipient address. A proxy can retain the same wallet address while pointing to different underlying logic. As a result, checking only the address or a high-level “send” summary may not reveal that the wallet’s behavior has changed.
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Ledger’s analysis of the Bybit/Safe attack highlights the importance of inspecting proxy implementations, contract calls and the actual effect of a transaction. The exact contract-level mechanics should be understood as a summary of published investigations, not as a court-established finding against a named individual.
Why cold storage and multisignature security did not prevent it
Cold storage generally means keeping signing keys offline or isolated from routine online systems. A warm wallet is more readily connected to operational systems for regular transfers. A multisignature wallet requires approval from multiple authorized signers.
Those controls address important risks, but they do not automatically verify that the transaction being approved has the intended effect.
- Hardware signing is not the same as clear signing: A hardware device can protect a private key while still allowing a user to approve a malicious contract operation they cannot interpret.
- Several signers can share one failure: If all signers rely on the same compromised interface, they may independently approve the same manipulated transaction.
- The address may stay familiar: A proxy-based change can preserve the wallet address while changing the logic behind it.
- Blind signing hides consequences: A signer may see technical calldata or a generic contract interaction rather than a clear explanation of permissions, balances and implementation changes.
- Convenience creates common-mode risk: A centralized transaction-preparation path can defeat a high approval threshold if it supplies misleading information to every signer.
The core security trade-off is therefore not simply “cold wallet versus hot wallet.” It is operational convenience and programmable wallet management versus independent verification of what is actually being signed.
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How did the attackers gain access?
The strongest public account involves social engineering and a compromise of a Safe developer’s workstation or development environment. Sygnia’s investigation summary described social engineering over nearly three weeks and malicious JavaScript affecting the Safe wallet interface. A preliminary forensic report placed an initial malicious-code event at February 19, 2025, at 15:29:25 UTC.
These details should be attributed to the published investigations. They do not establish that every Safe installation or all of Safe’s infrastructure was compromised, nor do they prove that a particular employee intentionally caused the theft.
Bybit’s published account said investigations by Sygnia and Verichains found no vulnerability in Bybit’s own infrastructure. That is Bybit’s reported conclusion and should not be broadened into a claim that every part of the custody process was secure.
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Who was responsible?
Attribution developed in stages:
- Independent blockchain analysis: ZachXBT and other investigators identified laundering patterns and infrastructure associated with Lazarus-linked activity.
- Industry analysis: Chainalysis and Elliptic described the movement and conversion of funds as consistent with DPRK-linked actors.
- Government attribution: On February 26, 2025, the FBI stated that North Korea was responsible and linked the activity to its TraderTraitor campaign.
“Lazarus Group” is a label used for a state-linked threat cluster, not necessarily the name of one publicly identified hacker. Government attribution is also not the same as a criminal conviction against a named operator.
What happened to the stolen funds?
The FBI said the attackers rapidly converted some assets into Bitcoin and other virtual assets and distributed them across thousands of addresses on multiple blockchains. Elliptic’s six-month analysis described increasingly sophisticated laundering activity.
Blockchain transactions can often be traced publicly, but tracing does not guarantee seizure or recovery. Recovering assets may require cooperation from exchanges, custodians, stablecoin issuers, law enforcement and other intermediaries. A frozen balance may also require legal and operational steps before it can be returned.
There is no basis in the supplied sources for saying that all funds were frozen, permanently lost or fully recovered.
Bybit’s response and customer-funds position
Bybit said that:
- the exchange remained solvent;
- customer assets were backed one-to-one;
- withdrawals and services resumed;
- it launched recovery and bounty programs.
Those are primarily statements from Bybit. A proof-of-reserves report can show control or ownership of specified assets at a particular point in time, but it does not by itself prove that every operational, governance, counterparty or withdrawal risk has disappeared.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsBybit’s later reserve materials include a Hacken assessment based on a June 24, 2026 snapshot, available through its proof-of-reserves page. Reserve coverage or replenishment is not the same as recovering the original ETH and related tokens from the attackers.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What was the recovery bounty?
Bybit announced a bounty equal to 10% of recovered funds. Under the published LazarusBounty program rules:
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- 5% goes to the entity that successfully freezes the funds;
- 5% goes to the first reporter who provides verifiable evidence leading to the freeze and identification of the responsible entity.
The bounty is tied to funds confirmed as frozen or recovered. Simply submitting an address or making an accusation does not qualify.
What customers should learn
For individual crypto users
- Use passkeys or hardware-based authentication where available.
- Enable withdrawal locks and address allowlists when an exchange offers them.
- Keep only the funds needed for trading on an exchange; consider separate custody for long-term holdings.
- Never enter a recovery phrase into a website or share it with a supposed recovery agent.
- Treat unsolicited offers to recover stolen crypto as likely scams, especially requests for upfront fees or wallet credentials.
For exchanges and institutional operators
- Separate transaction construction from transaction approval.
- Use independent transaction decoding and simulation before high-value signatures.
- Verify Safe proxy implementation addresses and changes.
- Require out-of-band confirmation for contract upgrades and unusual calls.
- Use separate, trusted signing environments rather than giving every signer the same software path.
- Add policy controls for address changes, high-value transfers and delayed withdrawals.
- Test emergency-freeze, incident-response and communications procedures.
The key question is not merely whether a hardware wallet was present. It is whether each signer could independently verify the resulting state change before approving it.
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What the Bybit theft means for crypto custody
The incident did not disprove cold storage or multisignature custody. It demonstrated that custody security includes the complete transaction lifecycle:
Preparation → display → simulation → approval → contract execution → monitoring → incident response
A multisignature threshold can reduce the risk of one stolen key, but it cannot fully protect an organization when several signers are shown the same manipulated transaction. Likewise, a hardware wallet can protect a key while failing to explain a malicious smart-contract call.
For users, the practical lesson is to distinguish between protecting credentials and verifying intent. For institutions, the lesson is broader: secure the wallet-management software, independently inspect contract logic, separate signer environments and treat proxy upgrades as high-risk governance events.
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