- Bybit won’t immediately buy Ether to cover a $1.5 billion shortfall after Friday's hack.
- CEO pleads for patience as company processes “bank run.”
Bybit has secured a “bridge loan” from unnamed partners to cover about 80% of the Ether it lost Friday in a $1.5 billion hack, CEO Ben Zhou said in a live stream on X.
Bybit will not immediately buy Ether in order to replenish the lost crypto, Zhou added.
“Even if we want to buy, it is too big of an amount to be moving around,” he said.
“We actually already secured almost 80% of the Ethereum that’s been stolen as a bridge loan to give us that liquidity, to help us with the liquidity crunch, so we can pass this crucial period.”
Zhou asked customers to be patient as the exchange processes “massive withdrawals” that he likened to a “bank run.”
Customers had withdrawn at least $500 million from Bybit on Friday as of 1:45pm New York time, according to DefiLlama data.
“We don’t have the plan to suspend or cancel withdrawals at the moment, we are still receiving all the withdrawal requests,” Zhou said.
Bybit has $20 billion in assets under management, and executives insisted the exchange would have no problem honouring customer withdrawals.
“Even today if all the Bybit clients withdraw, we can give you withdrawals,” Zhou said.
But it needed to borrow Ether from partner companies because customers’ Ether deposits aren’t entirely backed after the hack. Zhou estimated the hackers took 70% of the exchange’s Ether.
“Our treasury has more than enough reserves to cover the Ethereum notional amount, but we don’t have enough Ethereum right now,” Shunyet Jan, Bybit’s head of derivatives and institutions, said.
Bybit’s Ethereum cold wallet was the only company wallet that hackers exploited Friday, according to the executives.
Jan declined to speculate on the hacker’s identity, saying the exploit was still under investigation. Bybit has already filed a police report, he said.
Bybit is among the industry’s largest crypto exchanges. The hacker gained access to Ether in the exchange’s cold wallet — a secure, offline storage device for holding cryptocurrencies — and sent funds to an unidentified address.
Prior to today’s Bybit hack, the largest hack in the crypto industry was the Ronin Network exploit on March 23, 2022, which resulted in a $600 million loss.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
