Two Days on From the Largest Crypto Hack in History

The market has had time to fully digest the impact of Bybit’s hack by the Lazarus Group on Saturday morning. Surprisingly, it has held up well, considering this was the largest crypto hack in dollar terms. Bitcoin remains within the $95.7K–$100K range—though at the very bottom of it—and Ethereum, the asset stolen by the hackers, has continued to rally, now trading higher than it was pre-hack.

Bybit co-founder Ben Zhou and his team delivered a masterclass in crisis management, maintaining constant communication, avoiding withdrawal halts, and ensuring users could move funds as usual. This was despite Binance founder CZ suggesting a temporary pause on withdrawals. No users lost funds, transactions remained smooth, and paradoxically, the response has even reinforced confidence in Bybit for some traders.

Following the hack, Ethereum creator Vitalik Buterin reportedly announced that the Ethereum Foundation is considering either rolling back the chain or burning the stolen ETH. Burning would remove the stolen Ethereum from circulation, ensuring no one benefits from it. A rollback, however, would effectively undo the theft by erasing the transaction and all subsequent ones, requiring a hard fork—a major software update where miners, node operators, and users migrate to a new chain, leaving the old one behind. This has precedent: after the 2016 DAO hack, where $50 million in ETH was stolen, Ethereum executed a rollback, though it was controversial and led to the birth of Ethereum Classic (ETC) when some users refused to switch chains.

The rollback debate is polarising. If Ethereum can be rewound for a major hack, where does the line get drawn? Could smaller hacks, or even political motives, justify future rollbacks? Most of the community opposes it for this reason—it’s a Pandora’s box.

As of now, no decision has been made, but the Ethereum Foundation seems to be leaning towards taking no action, especially as Bybit appears to be replenishing its Ethereum reserves.

The hack has left a $1.4 billion ETH-sized hole in Bybit’s balance sheet, and they have already begun buying back Ethereum. This buying pressure has likely contributed to ETH’s strong price action over the past two days, making it a top performer among major cryptocurrencies, even outpacing Bitcoin.

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