The cryptocurrency exchange Bybit, which just suffered a major security incident, is now launching a recovery bounty program. The team wants to give back 10% of the funds that anyone is able to recover, according to a press release shared with CryptoPotato.

As reported previously, Bybit suffered a security breach, resulting in the theft of over $1.4 billion in ETH. The attack was carried out by the infamous Lazarus group, an organization allegedly run by the North Korean government.

In any case, speaking on the matter was Ben Zhou, co-founder and CEO of bybit, who said:

We want to officially reward our community, who lent us their expertise, experience, and support through the Recovery Bounty Program and our efforts to make this difficult lesson a valuable one does not stop here. Bybit is determined to rise above the setback and fundamentally transform our security infrastructure, improve liquidity, and be a steadfast partner to our friends in the crypto community.

He also added:

Within 24 hours of the event, we were overwhelmed with support from some of the best people and organizations in the industry, and we do not take it for granted. We have shared in a dark moment of crypto history, and we’ve proven we are better than the malicious actors.

In what is considered now the largest hack within the cryptocurrency industry, Bybit’s hot wallet was compromised when trying to complete a legitimate transfer, and roughly $1.5 billion, mostly in ETH, was stolen by being sent to another address.

Aside from the immediate impact on crypto prices, such a notable incident garnered the attention of the community, and now some prominent figures are calling for a rollback of Ethereum’s chain.

Hayes, Mow Say Yes

Arthur Hayes, the former BitMEX CEO who described himself as a “mega ETH bag holder,” suggested the rollback shortly after the attack. He believes ETH stopped being money in 2016 when the Ethereum blockchain went through a hard fork (creating Ethereum Classic) after a $60 million hack against The DAO.

Since it has already been done once, Hayes noted that it could happen again. Chinese-Canadian entrepreneur and CEO of JAN3, Samson Mow, supported Hayes’ stance, indicating that such a rollback will not only return the stolen ETH to Bybit but also help prevent “the North Korean government from using those funds to finance their nuclear weapons program.”

He went further, indicating that a potential rollback could readjust EIP-1559 to correct the deflationary burn mechanism, which has failed to an extent.

While we roll back, this is also an opportunity to adjust EIP-1559 to correct the deflationary burn mechanism. Perhaps with the addition of an oracalized zkflux capacitation layer to optimize the burn.

We can talk more in person at @EthereumDenver. pic.twitter.com/gCc0zhBAa3

— Samson Mow (@Excellion) February 22, 2025

The Risks

Rolling back Ethereum (or another blockchain) might sound simple, but it’s a highly complex technical move that could jeopardize numerous internal processes. To understand the risks, you should know that the rollback process allows the blockchain to revert back to a previous point in time. This means that it will not only return the stolen ETH to Bybit, but it will erase all other non-hack-related transactions and movements on the Ethereum network.

It has been done only a handful of times (like the aforementioned DAO hack) and is even rarely considered because it is highly controversial as it undermines the immutability of the underlying blockchain.

Many other community members highlighted the risks of such a potential move now, indicating that the Ethereum blockchain is a lot more complex now than it was nine years ago. YugaLabs’ VP, going by the X handle Quit, summarized the risks under Hayes’ post.

Let’s pretend for a moment that we were philosophically ok with another rollback:

– how many people that bridged or swapped assets would have their actions undone, for better or for worse?
– how many stablecoins or tokenized RWAs would suddenly be unbacked?
– how many L2s would…

— Quit (@0xQuit) February 22, 2025

As of press time, there has been no official statement by Vitalik Buterin or anyone else from the highest levels of the Ethereum food chain on the matter.

Bitcoin network activity has fallen to its lowest level in a year as demand for the leading digital asset remains low.

A report from the on-chain analytics platform CryptoQuant has revealed that the Bitcoin Network Activity Index, which measures the growth across major metrics like active addresses, number of transactions, and block size, is down 17% from its November 2024 record high.

Bitcoin Network Activity in Negative Trend

The network activity index is currently at 3,658, the lowest level since February 2024. It has also fallen below its 365-day moving average, an occurrence not seen since July 2021, after China placed a ban on Bitcoin mining. This indicator signals that activity on the world’s largest blockchain network has entered into a negative trend.

Bitcoin’s apparent demand growth has been on a decline since November-December, when it experienced a period of acceleration.

Following the conclusion of the U.S. presidential elections, Bitcoin demand surged to 279,000; however, the metric hovers around 70,000 today. Factors affecting demand growth include economic uncertainty regarding the imposition of trade tariffs in the U.S., inflation fears, and potential selling pressure from bankrupt crypto exchange FTX repayments.

Bitcoin Demand Remains Weak

The weak demand for BTC is also seen in purchases from the spot Bitcoin exchange-traded fund (ETF) market. Bitcoin ETF daily purchases have plummeted from over 18,000 BTC in early November to less than 1,000 BTC currently. CryptoQuant noted that BTC rallies have historically coincided with rising ETF purchases; however, current purchase levels do not support such price surges.

Moreover, CryptoQuant’s Inter-exchange Flow Pulse shows that Bitcoin spot demand has slowed in the U.S. The volume of BTC flowing from other exchanges to Coinbase has declined and fallen below its 90-day moving average, indicating relatively lower demand and a period of price correction.

What’s Next for BTC?

Furthermore, stablecoin liquidity expansion has slowed down. The total market cap of stablecoins has hit new highs above $200 billion; however, their liquidity is expanding at a slower pace. Tether (USDT), for example, has seen a 92% decline from the December 16 60-day change of $20.4 billion in market cap – the figure now sits at $1.5 billion.

CryptoQuant says BTC needs a new wave of stablecoin liquidity expansion to rally again. The cryptocurrency could fall towards $86,000, the Trader’s On-chain Realized Price minimum band, if demand growth and liquidity conditions do not improve soon enough.