Expert Discusses Why Blind Signing Isn’t the Main Culprit in the Bybit $1.4B Theft Incident.
The recent Bybit hack has raised significant concerns within the cryptocurrency community, especially regarding the security of cold wallets and the potential vulnerabilities that blind signing might expose. Blind signing has become a common topic of discussion as experts delve into what led to the $1.4 billion theft. However, a leading expert suggests that while blind signing is indeed a concern, it is not the primary cause behind the breach.
Blind signing happens when a user signs a transaction or message without thoroughly reviewing it, usually due to a lack of visibility into the specifics of what they are approving. In the case of the Bybit breach, experts have stated that while this strategy may have facilitated the attack, the underlying weakness resides elsewhere. The hack was carried out by the notorious Lazarus Group, which is tied to North Korea and exploited holes in the exchange’s technology. The Ethereum cold wallet leak resulted in the enormous theft of over 400,000 ETH, worth around $1.4 billion at the time.
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While blind signing may have contributed to the hack, it is critical to recognise that the true issue is the broader systemic vulnerabilities that allowed the attack to occur in the first place. Bybit swiftly responded to the incident by informing its users and initiating corrective actions, such as sponsoring a bounty programme and resuming withdrawals. The recovery process has been lengthy, and experts believe it has provided important insights about how exchanges may strengthen their security processes against such large-scale intrusions.
Furthermore, the topic of whether Ethereum’s blockchain should be turned back to reverse the harm has sparked passionate debate. While some have proposed this as a possible solution, many experts, including FailSafe’s co-founder, have regarded it as impractical. Ethereum’s decentralised architecture and strong stance against reversals make such solutions implausible, emphasising the significance of prioritising preventative security measures.
The theft has forced exchanges throughout the world to reassess their security policies, particularly those involving cold wallets and the use of blind signature. Experts advocate using more secure user authentication mechanisms and multi-signature wallets to help prevent such attacks in the future. Furthermore, greater transparency regarding transaction approvals may reduce the risks associated with blind signing.
