Adapted by:
Javier Pastor
Senior WriterComputer scientist turned tech journalist. I've written about almost everything related to technology, but I specialize in hardware, operating systems and cryptocurrencies. I like writing about tech so much that I do it both for Xataka and Incognitosis, my personal blog.
Karen Alfaro
WriterCommunications professional with a decade of experience as a copywriter, proofreader, and editor. As a travel and science journalist, I've collaborated with several print and digital outlets around the world. I'm passionate about culture, music, food, history, and innovative technologies.
The cryptocurrency market was booming months ago. Everything seemed relatively calm, but two serious events in this sector have revived distrust and uncertainty. That won’t be easy to shake.
A historic theft. Last week, hackers broke into the cryptocurrency trading platform Bybit. The company quickly warned that it had detected “unauthorized activity” on its systems. It was the largest cryptocurrency hack in history: around $1.5 billion in Ethereum. Previous major thefts included the $470 million stolen in the Mt. Gox hack in 2014, the $530 million taken from CoinCheck in 2018, and the $650 million stolen in the Ronin Bridge exploit in 2022.
Lazarus Group is a suspect. The company hasn’t determined how the hack was carried out, but it appears that company laptops weren’t compromised, and the problem affected Safe, the platform’s “cold” wallet. Cybersecurity consultancy Arkham Intelligence says the Lazarus Group was responsible, citing research by cybersecurity expert ZachXBT.
Bybit says it’s covered. Bybit CEO Ben Zhou insisted that his cryptocurrency trading platform had sufficient reserves to cover the hack and withdrawals—especially stablecoins—even though it temporarily blocked some wallet features to ensure security. Zhou recently explained how they managed to cover nearly all of the stolen funds.
Panic at Bybit. Many users have withdrawn funds from Bybit, fearing their assets could also be stolen. According to CoinDesk, in the hours following the hack, Bybit customers withdrew $4 billion. The firm’s crypto assets under management dropped from $16.9 billion to $11.2 billion, according to DeFiLlama.
Can blockchain be rolled back? Some users have asked whether it would be possible to “roll back” the Ethereum blockchain to undo the hackers’ changes and restore the ledger to its pre-hack state. But it’s unclear whether that is possible. According to CoinDesk, experts indicate that such a move could technically be done. However, the interactions between smart contracts and their internal architecture make it highly complex. A consensus would have to be reached, which could lead to a split in the Ethereum blockchain.
Just as things were picking up in the U.S. The theft happened on the same day that Coinbase reached an agreement with the Securities and Exchange Commission, leading the agency to drop its lawsuit without fining Coinbase. President Donald Trump’s re-election had boosted cryptocurrency values, but since his inauguration, several troubling events have occurred.
Meme coins, Trump, and Milei. The scandals have particularly affected meme coins created or supported by Trump and Argentina’s Javier Milei. Both saw their value skyrocket before collapsing in a mysterious and disturbing manner, suggesting possible fraud in which a privileged few profited while hundreds of thousands lost their investments.
A lingering atmosphere of mistrust. The meme coin scandals and Bybit hack have reignited the persistent sense of insecurity and mistrust surrounding cryptocurrencies. Recently, institutional interest and a period of relative calm had helped ease these concerns. But these latest events will likely make more investors think twice before entering the market.
Leaving cryptocurrencies on an exchange is risky. Hackers have repeatedly proven that security measures may be insufficient to protect customer funds. Experts recommend storing cryptocurrencies in physical wallets rather than leaving them on exchanges.
Image | Kanchanara (Unsplash)
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