Cryptocurrency exchange Bybit has reportedly lost over $1.4 billion in liquid-staked Ether (ETH) and MegaETH (mETH) due to a security breach. The incident was flagged by onchain security analyst ZackXBT, who urged users to blacklist addresses linked to the stolen funds, Cointelegraph reported.

Bybit Confirms Breach, Investigates Stolen Funds

Bybit co-founder and CEO Ben Zhou acknowledged the hack. He stated that a transfer was made from the exchange’s multisignature wallet to a warm wallet about an hour before the breach was identified.

JUST IN: Bybit founder confirms $1.4 billion $ETH hack, asserts solvency even if losses remain uncovered. pic.twitter.com/8rE3KHrGRL

— Whale Insider (@WhaleInsider) February 21, 2025

According to Zhou, the transaction appeared legitimate but contained malicious code. He said the attackers altered the smart contract logic, allowing them to drain funds. Zhou assured users that the exchange is investigating the breach.

"Please rest assured that all other cold wallets are secure. All withdrawals are NORMAL. I will keep you guys posted as more develops. If any team can help us to track the stolen fund will be appreciated," Zhou wrote.

Bybit ETH multisig cold wallet just made a transfer to our warm wallet about 1 hr ago. It appears that this specific transaction was musked, all the signers saw the musked UI which showed the correct address and the URL was from @safe . However the signing message was to change…

— Ben Zhou (@benbybit) February 21, 2025

Expect ongoing updates.