Weekly Financial Crime Update: Record-breaking $1.4 Billion Ethereum Theft in Largest Crypto Hack, SEC …
A massive breach at the cryptocurrency exchange Bybit has resulted in the theft of $1.4 billion worth of Ethereum. This incident is now known as the largest cryptocurrency hack in history, exceeding the $611 million Poly Network hack from 2021. By targeting Bybit’s Ethereum cold wallet, the attackers managed to steal 401,347 ETH ($1.12 billion), 90,376 stETH ($253 million), 15,000 cmETH ($44 million), and 8,000 mETH ($23 million), according to Onchain Lens. This unfortunate event prompted Bybit to launch a recovery bounty program, offering a reward of up to 10% of the recovered funds to ethical cyber and network security experts who can retrieve any of the stolen assets. This initiative could potentially result in a bounty of up to $140 million, making it one of the most significant crypto recovery efforts to date.
Ben Zhou, co-founder and CEO of Bybit, expressed gratitude for the overwhelming support received from industry experts and organizations within 24 hours of the breach. He highlighted the resilience of the industry in facing such challenges and emphasized the community’s ability to overcome adversity posed by malicious actors.
On a separate note, the Securities and Exchange Commission (SEC) recently announced the formation of the Cyber and Emerging Technologies Unit (CETU) to address cyber-related misconduct and safeguard retail investors in the realm of emerging technologies. Led by Laura D’Allaird, the CETU has replaced the Crypto Assets and Cyber Unit and is staffed with approximately 30 fraud specialists and attorneys. Acting Chairman, Mark T. Uyeda, emphasized the CETU’s role in complementing the work of the Crypto Task Force under Commissioner Hester Peirce. He stated that the unit’s primary focus is not only to protect investors but also to promote capital formation and market efficiency by fostering innovation while combatting any misuse of technology that could harm investors and erode trust in new technologies.
The CETU has outlined its high-priority areas for investigation, including fraud involving artificial intelligence and machine learning, social media, dark web, or false websites, takeovers of retail brokerage accounts, fraud related to blockchain technology and crypto assets, and hacking to obtain nonpublic material information. This strategic approach aims to strengthen regulatory oversight and ensure a safe and secure environment for investors in the rapidly evolving landscape of emerging technologies.
