Bybit Recovers Market Share as Traders Return Post Hack

Bybit has rebounded to its pre-hack market share after suffering the largest exploit in crypto history in February, with analysts pointing to improved sentiment, stronger security measures, and better liquidity options for retail traders.

The exchange lost over $1.4 billion in stETH, mETH, and other tokens on Feb. 21 during a sophisticated cyberattack. The aftermath saw Bybit’s market share drop to 4%, but the exchange has since clawed back lost ground. Its market share now stands near 7%—a level consistent with performance prior to the breach.

“Since this initial decline, Bybit has steadily regained market share as it works to repair sentiment and as volumes return to the exchange,” Block Scholes wrote.

The data reflects a steady recovery in spot trading activity. The analytics firm also noted that Bybit’s initial slump in volume came as part of a wider industry trend of macro de-risking, suggesting the hack wasn’t the only reason for the drop.

Despite the massive breach, blockchain analysts said nearly 89% of the stolen funds were traceable. The attackers, identified by Arkham Intelligence as North Korea’s Lazarus Group, laundered the funds through cross-chain protocol THORChain over 10 days. The group has been tied to several major crypto heists in recent years.

Chainalysis found that North Korean-linked crypto crime activity fell sharply after July 2024—raising suspicions that the drop-off was due to reallocated resources amid increasing military ties with Russia. By February, the group re-emerged with the Bybit exploit.

Bybit CEO Ben Zhou claimed that $100 million (40,233 ETH) from the hack had been laundered through OKX’s Web3 proxy, with a portion now untraceable. OKX’s wallet service, which supports 100 blockchains and has over 53 million addresses, could be exempt from MiCA rules if considered fully decentralized. However, regulators in Austria and Croatia argue that OKX’s Web3 service should be subject to EU oversight.

The focus is on whether OKX’s Web3 wallet and decentralized finance platform fall under the Markets in Crypto-Assets (MiCA) framework and, if so, whether the exchange could face penalties.

Bybit’s rapid recovery stood out in a year marked by multiple high-profile hacks, including the $230 million WazirX breach and the $58 million Radiant Capital incident.