A staggering breach at the Bybit cryptocurrency exchange has spotlighted severe vulnerabilities within its security framework, leading to the theft of $1.5 billion in Ethereum (ETH). Insights from expert David Leung unveil the mechanisms behind this attack and highlight critical errors made by Bybit.
What Techniques Were Used in the Attack?
The hackers employed a technique called “Blind Signing,” which allows users to authorize transactions without viewing all transaction specifics. This loophole enabled unauthorized access to Bybit’s cold wallet, where the ETH was stored, leading to the swift transfer of funds to a consolidated account. The criminals then dispersed the stolen assets into various wallets to obfuscate their trail.
Could Bybit Have Prevented This Incident?
Many experts assert that Bybit could have avoided this breach. Key preventive measures that might have helped include:
- Monitoring for Unauthorized Contracts: Bybit should have flagged the transfer to an ERC-20 contract that did not meet compliance.
- Implementing Delegate Call Safeguards: The absence of a control mechanism for delegate calls left Bybit vulnerable.
- Conducting Security Audits: Regular checks before and after transaction approvals might have mitigated risks.
Following the hack, Bybit announced a 50,000 ARKM coin reward for information on the culprits. Nevertheless, industry experts caution that recovering the stolen cryptocurrency will be difficult due to the lack of strong international regulatory frameworks.
