Ethereum Fork Debate Ignites Over $1.46B Hack Recovery Proposal

February 23, 2025 by Bena Ilyas

• Ethereum lost $1.46B in a Bybit hack, triggering a fork debate and major market disruptions.
  
• ETH price plummeted from $3,500 to $3,200, with 2.5 million ETH traded on Binance and Coinbase.
  
• Bybit hack surpassed Ronin’s $624M theft, with Lazarus Group suspected and Bitcoin rising 1.5% to $50,000.
  

Bybit has suffered one of the most significant security breaches in the history of digital assets. Hackers stole approximately $1.46 billion in Ethereum (ETH) from Bybit’s hot wallets, sending shockwaves through the crypto industry. The incident has sparked debates about blockchain security and governance.

According to Mihir’s post, there has been a debate on whether Ethereum should fork to recover the stolen $1.46 billion. Mihir argued that if a fact is legally proven, the Ethereum blockchain should fork on a Court order to regain control of the stolen funds. The stolen ETH was rapidly distributed across multiple wallets, with the largest transaction recorded at 30,000 ETH.

Ethereum Network Activity Spikes 10%

The Bybit hack had an immediate impact on Ethereum’s price. ETH dropped from $3,500 to $3,200 within an hour of the hack’s announcement, with trading volumes soaring to 2.5 million ETH on major exchanges like Binance and Coinbase. The ETH/BTC trading pair declined by 3%, while ETH/USDT mirrored a similar downward trend.

Market participants reacted by shifting funds into Bitcoin, causing BTC’s price to rise 1.5% to $50,000. On-chain data showed increased Ethereum’s network activity, with active addresses surging by 10% to 750,000 in the following 24 hours. This spike indicated heightened market interest and potential trading manipulation attempts.

Technical indicators reflected the market’s reaction. Ethereum’s Relative Strength Index (RSI) fell from 70 to 55, suggesting a transition from an overbought to a neutral zone. The Moving Average Convergence Divergence (MACD) signaled a bearish crossover, with trading volumes stabilizing by February 17, 2025, at around 1.8 million ETH daily.

Market Volatility After Bybit Hack

Bybit confirmed the breach on its official Twitter account on February 21, 2025. CEO Ben Zhou assured users that cold wallets remained secure and announced the incident was reported to authorities. Bybit maintained withdrawals, demonstrating confidence in its remaining security infrastructure and reassuring affected users.

Blockchain analytics firms Elliptic and Arkham Intelligence attributed the hack to the notorious Lazarus Group, known for previous large-scale crypto heists. This breach surpasses the Ronin Network attack ($624 million) and Poly Network exploit ($611 million), making it the largest crypto theft.

The theft triggered a ripple effect across the crypto market. Bitcoin dropped 3.5% to $47,200, Ethereum fell 2.8% to $3,150, and Bybit’s native token BIT plunged 10% to $0.90. Trading volumes surged on Bybit, with BTC/BIT transactions reaching 50,000 BTC. Other major cryptocurrencies like Solana and Cardano also experienced volatility.

Read More: Ethereum’s Dilemma: Rollback $1.4B From Bybit Hack or Face Global Sanctions?