Bybit, a major cryptocurrency exchange, recently faced a significant crisis as it experienced a dramatic decline in its reserves. Over a span of just two days, the exchange lost more than $6 billion, primarily due to a major exploit that resulted in a $1.4 billion loss.

The outflow of funds was particularly notable, with withdrawals amounting to:

• $2.5 billion on February 22
• $3.26 billion on February 23

This situation caused Bybit’s total assets to drop from $16.9 billion to $10.8 billion. The majority of the withdrawn assets were stablecoins and Bitcoin, with users withdrawing more than $2.3 billion in USDT and over $1.5 billion in BTC.

Despite the large withdrawals, Bybit managed to process them without major issues. Analysts noted that while many Bitcoin withdrawals seemed routine, significant amounts were directed to binance/?utm_source=CVJ.Ai&utm_medium=glossary&utm_id=CVJ.AI" target="_blank">Binance and over-the-counter platforms, raising speculation about potential asset liquidation or collateral usage. In response to these concerns, Bybit’s CEO, Ben Zhou, reassured users that the exchange has resolved its Ethereum shortfall and that client assets are fully backed on a 1:1 basis.

📎 Related coverage from: cryptoslate.com