North Korea’s notorious Lazarus Group just pulled off their most audacious heist yet, swiping a staggering $1.4 billion from Bybit exchange on February 21, 2025. The hack—now officially the largest crypto theft in history—involved exploiting smart contract logic during what should have been a routine transfer. Over 400,000 ETH and stETH vanished. Just like that. Gone.
Bybit somehow remained solvent despite users rushing to withdraw funds. Small miracle, really. The FBI didn’t waste time, officially pinning the blame on “TraderTraitor”—their cute nickname for Lazarus—by February 26. Both ZachXBT and TRM Labs had already connected the dots, citing the hackers’ familiar patterns.
These guys aren’t amateurs. Within two hours, they’d split the funds across 50 different wallets. Classic laundering playbook: decentralized exchanges, cross-chain bridges, mixers. The stolen ETH ultimately became 6,706 Bitcoin. Clever. Hard to trace. THORChain has come under fire for processing a significant portion of these illicit transactions.
This is just another day at the office for Lazarus. They’ve stolen a mind-boggling $6 billion since 2017, with $1.34 billion from 47 separate heists in 2024 alone. Remember the Axie Infinity breach? That was them too. The group’s targeting of centralized exchanges follows their recent shift back to attacking centralized platforms after briefly focusing on decentralized services. All this apparently funds North Korea’s missile program. Crypto exchanges are basically funding weapons development. Let that sink in.
Bybit’s offering a 10% bounty on recovered funds—they’ve already paid out $4 million to people helping trace transactions. The FBI’s begging exchanges to block listed addresses. Fat chance that’ll solve the problem.
Markets reacted predictably. ETH dropped 8%. Altcoins followed. Investors panicked. Again.
The real question: are crypto defenses actually working? Smart contract auditing clearly needs improvement. Exchanges need better security. Cold wallets aren’t as safe as we thought.
Six years of major hacks, and the industry’s still playing catch-up. Billions stolen. Little recovered. Regulators threatening crackdowns. Innovation versus security—the eternal crypto balancing act. The attack exposes the vulnerability of even immutable blockchain records that were supposed to guarantee transaction security. And Lazarus? They’re laughing all the way to their digital bank.
