The crypto market is reeling from one of the largest hacks in history as North Korean hacking group Lazarus successfully orchestrated a $1.4 billion theft from Bybit on February 21, 2025. The incident has sent shockwaves through the industry, with Bitcoin plunging below $83K and Ethereum suffering a 23% drop.
Anatomy of the Hack
According to investigations, the Lazarus group deployed sophisticated malware that displayed fake user interfaces to Bybit’s multisig signers. This unprecedented attack vector required the hackers to compromise multiple devices simultaneously, highlighting the operation’s complexity.
As detailed in Bybit’s $1.4B Hack: 77% of Funds Still Traceable!, the breach primarily targeted Ethereum holdings, with approximately 499,000 ETH stolen.
Market Impact and DeFi Fallout
The market reaction has been severe, with several key developments:
- Bitcoin dropped below $83,000, marking a 15% decline
- Ethereum plummeted 23% following the laundering of stolen funds
- DeFi protocols Chainflip and THORChain were used to launder over $742M
- THORChain’s $RUNE token paradoxically surged 33% due to increased trading volume
Recovery Prospects
Despite the immediate market downturn, several positive indicators suggest potential recovery:
- BlackRock’s addition of Bitcoin ETF to its $150B portfolio
- Bitcoin’s price stabilizing above $84K as of March 1
- Fear and Greed Index showing resilience above market expectations
Expert Analysis
Crypto security expert Sarah Chen notes: ‘This hack demonstrates that even sophisticated multisig implementations can be compromised through social engineering and malware. The industry needs to reassess its security paradigms.’
Looking ahead, the SEC’s upcoming roundtables on crypto security and regulation could provide much-needed clarity and potentially restore market confidence.
