Crypto prices tumbled this morning - most notably BTC and ETH - on reports that cryptocurrency exchange Bybit has reportedly been hacked for over $1.4 billion in liquid-staked Ether and MegaETH (mETH).

The sudden downturn liquidated roughly $100 million worth of leveraged derivatives trading positions, overwhelmingly longs anticipating prices to rise, CoinGlass data shows.

As Vince Quill reports for Cointelegraph.com, following the incident, the onchain security analyst ZackXBT warned users to blacklist addresses associated with the hack. Bybit co-founder and CEO Ben Zhou also provided an update on the security breach.

Zhou confirmed that a transfer was made from the exchange’s multisignature wallet to a warm wallet approximately one hour prior.

The CEO said the specific transaction was masked to appear legitimate but contained malicious source code designed to alter the smart contract logic of the wallet and siphon funds. Zhou reassured customers:

“Please rest assured that all other cold wallets are secure. All withdrawals are NORMAL. I will keep you guys posted as more develops. If any team can help us to track the stolen fund will be appreciated.”

The incident follows several high-profile hacks and security incidents throughout 2024 and early 2025 that left crypto exchanges drained of funds.

The crypto industry experienced an uptick in hacks and scam-related activity in the first several weeks of February 2025.

“Bybit is Solvent even if this hack loss is not recovered, all of the client’s assets are 1 to 1 backed — we can cover the loss,” the Bybit CEO added in a separate post.

In an X statement, the exchange assured that its cold wallets “remain fully secure.” “All client funds are safe, and our operations continue as usual without any disruption.”