The world of cryptocurrency was shaken once again as the infamous Lazarus Group, a North Korean cybercrime syndicate, executed one of the largest heists in crypto history. The latest victim? ByBit, a major cryptocurrency exchange, losing a staggering $1.4 billion in what appears to be an incredibly sophisticated exploit.

Who is the Lazarus Group?

The Lazarus Group is a state-sponsored hacking collective that has been responsible for some of the biggest cyber thefts in history. Their mission is clear: steal billions to fund North Korea’s military and weapons programs. Their past operations include:

• Axie Infinity (Ronin Bridge) Hack – $625 million stolen
• Harmony Bridge Hack – $100 million stolen
• Stake.com Exploit – $41 million stolen
• Bangladesh Central Bank Heist – $81 million stolen
• Sony Pictures Hack (2014) – Major cyberattack on Hollywood

Using a combination of social engineering, phishing scams, and malicious smart contracts, the group has perfected the art of large-scale digital theft.

How Did the ByBit Hack Happen?

ByBit’s security system was considered top-tier, with its Ethereum (ETH) holdings secured in a multi-signature cold wallet—a method believed to be one of the safest in the industry. However, Lazarus didn’t need to hack ByBit’s servers directly. Instead, they exploited a critical vulnerability in human oversight and contract logic.

Step 1: The Decoy Transaction

The hackers mirrored ByBit’s signing interface, making everything appear normal. The transaction request looked legitimate:

• The correct recipient address was displayed.
• The amount seemed accurate.
• There were no obvious red flags.

However, behind the scenes, the contract logic was different from what the signers thought they were approving.

Step 2: The Trojan Horse Approval

Once the signers approved the transaction, they weren’t just transferring ETH. Instead, they unknowingly changed the wallet’s contract code, giving Lazarus full control over ByBit’s cold storage.

Essentially, the security team unknowingly handed over the keys to the vault.

Step 3: The Grand Heist

With control over the wallet, Lazarus quickly moved the funds to 53 different wallets:

• 39 wallets received 10,000 ETH each.
• 9 wallets received 10,000 ETH each.

The funds are now being laundered through various mixing services, decentralized exchanges, and multiple wallet transfers to obscure the trail.

What’s Next?

The crypto community and blockchain analytics firms are closely tracking the stolen funds, but history suggests that Lazarus will use sophisticated laundering techniques to make recovery nearly impossible.

This attack serves as yet another stark reminder:

• Even the biggest players can be vulnerable.
• Cold storage isn’t always cold enough.
• Not your keys = Not your coins.

As the ByBit team scrambles to recover from this devastating blow, the larger question remains: how do we stop Lazarus before they strike again?

The ByBit Hack Should not be making you feel bearish, nor should it be triggering fears of 2022 contagian. This is an example of bull market resilience! The market did not dramatically dip on this news, and prices are still holding critical levels! ByBit is also covering withdraws. If a $1.5B hack of a major exchange isn’t plummeting the prices, we’re probably at the bottom.