Bybit prevented fake deposit attacks worth over $1 billion

Cryptocurrency exchange Bybit stated that its Group Risk Control team detected and blocked a series of coordinated fake deposit attacks across multiple blockchains. Potential losses were estimated at more than 1 billion DOT (approximately $1.3 billion at the time of writing). All incidents were neutralized in real time — no erroneous fund credits were recorded.

How did the attacks work?

According to the company, attackers used complex transaction processing mechanisms to simulate incoming funds. Their goal was to trick the exchange system into crediting assets that were not actually received. Identified scenarios included:

• batch transactions where a large operation failed while smaller ones succeeded;
• multi-step transactions with ownership changes that created the illusion of fund movement without an actual balance increase.

The company noted that such attacks can mislead systems that rely solely on overall transaction status or event logs.

According to Bybit, its deposit monitoring system is built on a multi-layer validation model. It analyzes transactions at each execution stage and confirms only real asset movement, which is why losses were avoided.

The system includes:

• full scanning of blockchain data, including complex and failed transactions;
• filtering by user addresses and account structures;
• transaction decomposition and verification of internal operations;
• tracking ownership changes and balance verification;
• real-time anomaly and risk assessment.

Bybit’s Head of Risk and Security, David Tsung, stated that the system “breaks down each transaction into basic operations and verifies them separately,” enabling detection of even complex attack scenarios.

“Fake deposit attacks are not new to the crypto industry. Known incidents include the transaction malleability exploit at Mt. Gox, which led to the loss of about 850,000 $BTC, as well as the Silk Road bug in 2012 that resulted in the theft of 51,680 $BTC. The attacks detected by Bybit represent a new generation of such exploits adapted to modern blockchain transaction models,” the press release states.

Previously, media reported that Coinbase is in talks to invest in Bybit at a valuation of around $25 billion.

See also: "Coinbase has obtained a licence to trade crypto derivatives in Australia"

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