Bybit Hack: Experts Suggest Rolling Back Ethereum Blockchain to Recover $1.5B Looted by Lazarus Group

On Friday, Bybit was allegedly hacked by the infamous state-backed hacker organization Lazarus Group, which looted roughly $1.5 billion in ether

Major cryptocurrency exchange Bybit was hacked on Friday by the infamous state-backed Lazarus Group, which looted roughly $1.5 billion in ether (ETH) from the platform. The hack is the largest in crypto history and represents over 60% of all crypto funds pilfered in 2024.

Following the security breach, some of the industry’s most prominent figures have suggested “rolling back” the Ethereum blockchain so that the stolen ETH is recovered and returned to Bybit — and simultaneously preventing the North Korean government from using those funds to fund its nuclear weapons program.

While rolling back the Bitcoin blockchain is technically possible, such a state transformation on Ethereum would be more complex as the chain has evolved significantly, with decentralized finance (DeFi) and cross-chain bridges.

Any state change would also require consensus and would likely result in a controversial hard fork, attracting heavy criticism from the community. This would ultimately split the Ethereum blockchain into two networks, each with its own proponents.

Most notably, a massive 2016 hack on The DAO saw roughly $60 million in ETH successfully drained. In response, the network proceeded with a coordinated hard fork, ultimately splitting the old network into two, with the new chain continuing as Ethereum. The fork essentially took the money back from the hacker by rewriting the Ethereum ledger.

Reacting to the Bybit hack, Mike Novogratz — the founder of crypto investment and research firm Galaxy Digital — commended Bybit for doing “a world-class job” of dealing with the hack. However, Novogratz is against a radical bailout-like hard fork, noting that the Lazarus Group has stolen Bitcoin (BTC) and plenty of other cryptos before.

According to the billionaire, the 2016 fork was very different given the stage of the Ethereum ecosystem at the time, likening it to a baby taking its first steps.

“There will be and should be no ETH fork. Bybit, unfortunately, will take a hit until their funds are recovered if our governments ever press NK (North Korea). The community will freeze the accounts and we move on,” Novogratz added.

The Galaxy Digital CEO urged world leaders to deal with the current risk presented by Lazarus.

“It’s time world leaders do something about Lazarus.”

The price of Ether slumped over 7% in seven hours following the hack, dropping from $2,830 to $2,668. The second-largest crypto by market value was trading hands at $2,679 at press time, according to data from CoinGecko.