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Bybit security overhaul comes after a historic $1.4 billion hack that shocked the crypto community in February.
The crypto exchange, ranked second globally by trading volume, suffered one of the worst breaches in industry history. On Feb. 21, hackers drained more than $1.4 billion in staked ETH and ERC-20 tokens.
The Bybit security overhaul, revealed on June 4, introduced a three-layer defense strategy. It focuses on intense security audits, enhanced wallet safety, and stronger information security protocols.
Fifty New Security Measures After Nine Audits
Immediately after the breach, Bybit completed nine rigorous audits. These were carried out by internal experts and external cybersecurity professionals. As a result, Bybit deployed over 50 new security measures to plug vulnerabilities.
One of the key improvements includes upgraded cold wallet protocols. All wallet processes are now supervised by security specialists. Moreover, Bybit integrated multiparty computation (MPC) and consolidated its hardware security modules.
Bybit also earned ISO/IEC 27001 certification, reflecting its new risk management standards. The platform now encrypts all communications and data storage, both internal and customer-facing.
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Cold Wallet Upgrades Lead the Bybit Security Overhaul
In its statement, Bybit emphasized that wallet protection was a top priority. The cold wallet system now requires complete oversight by security personnel during operations. With MPC integration, asset security is decentralized, limiting single-point failure risks. This change was essential after attackers exploited weaknesses in the wallet infrastructure.
Despite the attack, Bybit has already recovered most of its liquidity. Kaiko reports show that Bitcoin liquidity rebounded to $13 million daily within a month. Altcoin liquidity also recovered, though more slowly. This was supported by Bybit’s Retail Price Improvement (RPI) orders, designed to enhance institutional trading and market depth.
Bybit Fights Back With Lazarus Bounty Initiative
The exchange’s Lazarus Bounty program, aimed at tracking stolen funds, is still active. To date, it has paid out over $2.3 million in rewards. These bounties incentivize security researchers and blockchain sleuths to trace and recover the lost assets.
Bybit warned users that attacks are becoming more sophisticated. Instead of protocol flaws, many hackers now exploit human behavior through social engineering. Fake brands, phishing, and deepfakes pose a growing risk in the ecosystem.
The overhaul sends a strong message about resilience. Bybit not only recovered from one of the largest crypto thefts but is setting a new benchmark in exchange security. Its proactive response, including transparency and swift improvements, may influence industry-wide standards.
Crypto exchanges are now under pressure to adopt similar levels of auditing, wallet protection, and user education. With threats becoming more complex, especially those targeting humans rather than code, users and platforms must evolve together.
