Bybit Closes 'ETH Gap,' Back To 1:1 Reserve Ratio After Crypto Heist: Freezes $42.89 Million In Stolen Funds

Bybit said on Sunday it froze $42.89 million of the hacked funds thanks to the efforts of multiple parties and returned to a 1:1 backing of the Ethereum (CRYPTO: ETH) held in custody, days after the shocking $1.4 billion exploit.

What Happened: Bybit announced via X that it was successful in restricting hackers’ ability to move the funds, a day after hackers stole over $1.4 billion worth of ETH and related tokens.

This was made possible due to the coordinated efforts of multiple teams including stablecoin issuers like Tether (CRYPTO: USDT), Circle (CRYPTO: USDC), the Avalanche ecosystem (CRYPTO: AVAX), and cryptocurrency exchange Bitget, among others.

Furthermore, the exchange thanked Lily Liu, President of the Solana (CRYPTO: SOL) Foundation, and meme coin launchpad Pump.fun for their “swift action” in blocking a Solana-based token whose creator might be affiliated with the group behind the Bybit exploit.

See Also: Bitcoin ‘Early In Bull Market,’ Can Compete With Gold ETFs, Blockstream CEO Says

Meanwhile, Bybit CEO Ben Zhou confirmed that the exchange has "fully closed" the ETH gap through loans, whale deposits, and ETH purchases, returning to a 1:1 backing of its client assets.

Why It Matters: The cryptocurrency market came in for a big jolt Friday after North Korea's infamous Lazarus Group allegedly hacked over a billion dollars worth of ETH from popular exchange Bybit, marking the biggest cryptocurrency heist ever recorded.

Following the hack, Bybit launched a recovery bounty program, offering up to 10% of the recovered funds as a reward to cybersecurity experts who assist in retrieving the stolen assets. 

Bybit continues processing withdrawals, securing liquidity through a bridge loan covering 80% of the stolen Ethereum to ensure customers' funds remain safe.

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