Key Insights:
Bybit has purchased $746 million, as it intends to repay its $1.4 billion deficit.
The $1.4 billion profit that Bybit got last year could be used to repay all the ETH loans.
The crypto exchange sought a $1.2 billion ETH loan from Bitget, MEXC and two whales.
Bybit suffered a complex hack where the UI of it's cold wallet was phished and wallet controllers were tricked into signing a transfer.
Bybit has finally conducted a new Proof of Reserves audit which seems to have alleviated fear from the users.
Proof of Reserves is an on-chain audit of crypto where an independent auditor (here Hacken) evaluates all the reserves by asking the exchange to move some crypto to specific wallets (all client, i.e., here Bybit owned).
In the Bybit hack series of events, the exchange has purchased a $746 million ETH from the OTC markets. The funds for the purchase probably arrived from Bybit's own balance sheet and some possible contributions from Bybit executives and board.
The latest information suggests that Bybit has fully closed the disbalance in Ethereum reserves caused by the hack. This in turn has stabilized users and have assured them against potential loss of funds like in the WazirX case.
Now all that remains to return to normalcy is that it buys an additional $700 million of ETH from the markets.
Conservative estimates suggest that Bybit had an annual profit of around $900 million to $1.5 billion last year. This profit corresponded to an annual trading volume of $100 billion.
It is being assumed that this profit in Bybit was helpful in its current Ethereum purchases that is could use to repay ETH loans from its creditors.
Last Friday, Bybit suffered a complex hack where its cold wallet was hacked and the Bybit wallet users were tricked into signing a transaction. This event resulted in a $1.4 billion loss in ETH and stETH.
The hackers managed to gain access to Bybit's Safe smart wallet's user interface and changed it to show a routine transaction. The wallet handlers thought they were signing a routine sweep from the cold wallet to the hot wallet. Instead, they were signing a transaction which changed the smart contract logic of the smart wallet.
Bybit hackers then managed to transfer $1.4 billion from the exchange. Later, those hackers were identified as the Lazarus Group, the same hackers that stole $625 million from Axie Infinity.
Once upon a time, the dominant thought in the markets was that centralized exchanges had the highest grade of security. However, with the growing complexity of cybersecurity threats, centralized exchanges are no longer the "Fort Knox" that they were once thought to be.
The Bybit hack was not the first major CEX hack. Last year, we also saw WazirX losing half of is user deposits due to an unknown hack that stole $230 million from the Singapore-based exchange.
The best we can recommend is taking self-custody. You can explore these top wallets and get the one you like.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.