Dubai crypto regulator monitoring and tracking Bybit hack situation

Dubai crypto regulator monitoring and tracking Bybit hack situation

Dubai Virtual Assets Regulatory Authority has confirmed to Lara on the Block that they are actively monitoring the ByBit hack situation as the matter evolves and are closely tracking it until it stabilizes. The statement was made after Bybit, the second largest crypto exchange globally was hacked on February 21st 2025, losing $1.4 billion in Eth.

As per Bybit, whose headquarters are based in Dubai UAE, the exchange detected unauthorized activity within one of their Ethereum (ETH) Cold Wallets during a routine transfer process. The transfer was part of a scheduled move of ETH from their ETH Multisig Cold Wallet to their Hot Wallet. Unfortunately, the transaction was manipulated by a sophisticated attack that altered the smart contract logic and masked the signing interface, enabling the attacker to gain control of the ETH Cold Wallet. As a result, over 400,000 ETH and stETH worth more than $1.5 billion were transferred to an unidentified address.

It was later found that the Lazarus Group out of North Korea were responsible, and since then have been transferring ETH to new addresses through ChainFlip.

VARA spokesperson told Lara on the Block, ” Bybit has not been granted a regulatory licence under VARA, and is currently working towards fulfilling the stringent licensing requirements to secure a VASP operating permit in Dubai. As part of VARA’s rigorous due diligence, we have been actively monitoring the situation since the hack on ByBit was confirmed last night – this remains a highly evolving matter that we will continue to closely track until it stabilizes.”

Bybit headquartered in Dubai UAE

Bybit had set up its headquarters in Dubai UAE back in 2023, citing it as one of the most progressive crypto jurisdictions. The crypto exchange then received its in-principle license in September 2024 and is still in the process of receiving its full license. Bybit has been very active in the UAE partnering and working with entities to increase crypto awareness and investments in the ecosystem.

Bybit in turmoil after $1.4 billion hack

The Bybit hack is the biggest loss in the entire history of crypto exchanges. The exchange lost 400,000 ETH and stETH worth more than $1.5 billion. What is more interesting is since the hack the exchange has seen withdrawals of more than $5 billion. According to Bybit CEO Zhou speaking in an X space, ” Fortunately the company’s assets are far greater than $1.5 billion, there is a cold wallet in safe with nearly $3 billion in USDT, and fortunately this has not been stolen.” He adds though that, “if more than $10 billion was stolen, it might be necessary to consider selling the company.”

Cryptocurrency exchange Bybit has maintained reserves exceeding its liabilities despite suffering a $1.4 billion hack and an overall $5.3 billion decline in total assets, according to DefiLlama data. Bybit processed more than 350,000 withdrawal requests within 10 hours, completing 99.9% of them by 1:45 am UTC, Bybit co-founder and CEO Ben Zhou noted.

“Although we have been hit by the worst hack possibly in the history of any medians (banks, crypto, finance), But all Bybit functions and product remain functional, the Whole team had been awake all night to process and answer client questions and concerns,” Zhou wrote.

One of the exchange updates stated that they had reported the case to the appropriate authorities, and have worked quickly with on chain analytics such as Chainanalysis, and Hacken to identify and demix the implicated addresses.

Global crypto community shows solidarity with Bybit

In a show of solidarity, other crypto exchanges such as Bitget, Binance, OKX, and even some Chinese cryptocurrency leaders are actively transferring ETH to Bybit to support its liquidity. Even Huobi co-founder Du Jun deposited 10,000 ETH to Bybit as well as founders of Conflux and Mask Network.

In a recent Xpost Zhou also thanked MEXC, Solana, TON, Blockchain UAE, Ghaf Capital in UAE as well as Tether and Galaxy Digital among others.

Additionally according to Ethescan, the Mantle powered mETH Protocol has salvaged 15,000 cmETH from Bybit Exploiters worth about $2.76 million.

Updated at 8:00 pm Dubai UAE time

The first regulated crypto exchange in the Middle East has lost $14.8 million

The first regulated crypto exchange in the Middle East has lost $14.8 million

According to ZachXBT, an internet sleuth with over 500 hundred thousand followers on Twitter, Bahrain and UAE regulated crypto broker, RAIN, has been likely exploited for $14.8 million. The exploit happened on April 29th and according to ZacHxbt no statement was made by RAIN on the incident.

On the contrary on May 6th RAIN Bahrain tweeted “It was our pleasure to have our General Manager of Bahrain Mohamed Ateeq speak at the Sixth Innovation and Entrepreneurship Forum, organized by the University of Bahrain as part of the Manama week events by the Southern Municipality. It is always a pleasure for us to share Rain’s journey that lay the foundations for the crypto sector in the MENA region.”

According to ZachXBT on TME, “It appears the crypto exchange Rain was likely exploited for $14.8M on April 29, 2024 after their BTC, ETH, SOL, and XRP wallets saw suspicious outflows. Funds were quickly transferred to instant exchanges and swapped for BTC and ETH.”

He added, “As of now Rain has yet to make any statement about the incident.”

He noted that the stolen funds currently sit on these addresses

137.9 BTC

bc1q53aawrkpt5lvk2e30z36unvmhqqdru7q4rprp2 (https://mempool.space/address/bc1q53aawrkpt5lvk2e30z36unvmhqqdru7q4rprp2)

1881 ETH

0x197bc094f990261fd6841342901c451858756c28 (https://etherscan.io/address/0x197bc094f990261fd6841342901c451858756c28)

RAIN crypto exchange had received a license both from the Central Bank of Bahrain as well as ADGM in Abu Dhabi. In Bahrain Rain Management W.L.L. is licensed by the Central Bank of Bahrain as a Category 3 Crypto-Asset Services Provider. It received its license back in 2019.

In 2022, RAIN Crypto exchange raised $110 in a Series B funding round. The round was co-led by Paradigm and Kleiner Perkins with participation from multiple parties including Coinbase Ventures, Global Founders Capital, MEVP, Cadenza Ventures, and CMT Digital.

As per RAIN’s website it is backed by MEVP (Middle East Venture Partners), Dubai International Financial Centre, Coinbase, Paradigm, and KleinerPerkins.

In July 2023 RAIN received a fully regulated crypto broker license in UAE through ADGM.

Lara on the Block tried to get in touch with executives from RAIN but without avail. UAE ADGM also has no official statement to make at this time. The Central Bank of Bahrain could not be reached at this time.

Touting itself as “The most trusted cryptocurrency platform” if this turns out to be true it will have negative effects on crypto sentiments in the region. Crypto investors lost $2 billion to hacks and exploits last year and $333 million in Q1 of 2024.