Bybit Breaks Silence on Breach Rumor: Market Panic, Billions Liquidated

Bybit Breach Rumor Triggers Panic Despite Exchange Assurance of Safety

The cryptocurrency world was rattled this weekend after rumors of a security breach at Bybit, one of the world’s largest digital asset exchanges, spread rapidly across social media. Within hours, the speculation sparked widespread panic, contributing to sharp swings in Ethereum’s price and triggering mass liquidations across the market. Bybit, however, moved swiftly to deny the claims, reassuring its users that their funds remained secure and that operations were proceeding normally.

Rumors Spark Fear Across Crypto Markets

The confusion began with a single post on X (formerly Twitter) from an unverified account with fewer than 500 followers. The post alleged that Bybit had suffered a major breach and that user funds had been compromised. Despite the lack of evidence, the post was quickly shared nearly 400 times, snowballing into a narrative that shook market confidence.

Source: X

Within hours, traders began offloading assets, fueling volatility across the sector. Ethereum, the world’s second-largest cryptocurrency, dipped nearly 7% to $4,144 before recovering slightly later in the day.

Bybit issued an immediate statement refuting the claims, emphasizing that all customer assets were safe, systems were fully operational, and there was no evidence of a breach. “We urge our users to rely on verified announcements from Bybit’s official channels,” the company said, underscoring the dangers of misinformation in fast-moving financial markets.

Why Traders Believed the Rumor

Part of the reason the rumor gained traction so quickly lies in Bybit’s recent history. In February 2025, the exchange suffered one of the largest hacks in cryptocurrency history, losing more than $1.4 billion worth of Ethereum in an attack later attributed to North Korea’s Lazarus Group. The state-backed cybercrime collective is infamous for targeting major exchanges, including Phemex and BingX, and has been linked to numerous high-profile hacks in recent years.

That event left scars on the market, and many traders remain sensitive to any suggestion that Bybit could once again be under attack. As a result, when the unverified post appeared, it tapped into existing fears, prompting some investors to react before checking the source.

This illustrates how reputational baggage from past incidents can magnify the impact of false information, even in the absence of evidence.

False Alarm, Real Market Consequences

While the Bybit rumor proved to be false, its ripple effects were very real. In the 24 hours following the post, data from Coinglass showed that 396,969 traders were liquidated, with total losses surpassing $1.69 billion. The largest single liquidation order occurred on OKX’s BTC-USDT-SWAP contract, valued at $12.74 million.

Bitcoin, Ethereum, and several altcoins all experienced heightened volatility, amplifying concerns that social media rumors could be weaponized to manipulate markets. Analysts noted that the scale of the liquidations was comparable to movements typically seen during genuine market crises, underscoring how damaging unverified claims can be.

A Pattern of Misinformation in Crypto

The Bybit scare is hardly the first time false reports have jolted cryptocurrency markets. In 2022, unsubstantiated rumors that Binance was on the brink of bankruptcy triggered billions of dollars in withdrawals before being swiftly denied by the exchange. That same year, speculation about Tether (USDT) losing its dollar peg caused a temporary sell-off. In another case, fake news of a Bitcoin ETF approval briefly sent BTC soaring before prices corrected once the reports were debunked.

These episodes reveal a recurring vulnerability in crypto markets: their reliance on digital information networks where false claims can spread faster than facts. The absence of centralized regulation and the rapid response times of traders create conditions where misinformation can inflict immediate and severe damage.

Lessons for Investors: Trust, But Verify

Experts say the Bybit rumor highlights the urgent need for greater vigilance among crypto investors. Anthony Pompliano, an early Bitcoin advocate, has previously warned that “misinformation spreads faster in crypto than anywhere else because the incentives to act quickly are so high.”

In this case, a single unverified tweet from an obscure account triggered widespread panic. For investors, the lesson is clear: always verify news through official channels before taking action. Exchanges like Bybit, Binance, and Coinbase regularly update their users through verified accounts and press releases, and relying on these sources can help prevent costly mistakes.

The Broader Risk of Crypto Misinformation

Beyond immediate price swings, experts warn that persistent misinformation poses a broader systemic risk to the crypto ecosystem. Each false scare undermines confidence, discourages institutional adoption, and creates fertile ground for coordinated attacks by malicious actors.

Cybersecurity researchers note that misinformation campaigns can be as damaging as technical hacks. While February’s Bybit hack demonstrated the vulnerabilities of even advanced cold wallet systems, Saturday’s rumor underscored the psychological vulnerabilities of crypto markets.

“Misinformation has become another vector of attack,” said one cybersecurity analyst. “It doesn’t require breaking into wallets or bypassing encryption. All it takes is a tweet with just enough credibility to trigger fear.”

Moving Toward a More Resilient Market

As the crypto industry matures, combating misinformation is becoming an increasingly important challenge. Exchanges are investing in stronger communication strategies, working with fact-checking organizations, and educating users about how to identify credible sources.

Meanwhile, traders are being encouraged to adopt longer-term strategies that are less susceptible to daily swings caused by rumors. Analysts say that diversification, disciplined stop-loss orders, and reliance on official updates can help mitigate the risks posed by misinformation.

Regulatory clarity may also play a role. Some governments are beginning to address the issue of online financial misinformation, though critics argue that striking the right balance between protecting investors and preserving free expression will not be easy.

Conclusion: False Rumor, Real Wake-Up Call

The Bybit breach rumor may have been false, but the damage it caused was real. Billions were lost in liquidations, Ethereum and other digital assets saw sharp price swings, and the fragility of market trust was once again exposed.

For Bybit, the incident was an opportunity to reinforce its credibility, quickly denying the claims and reassuring users of its security measures. For investors, it was a stark reminder of the risks of acting on unverified information in a market where speed often trumps caution.

As the crypto sector grows, the need for resilience against both technical and informational attacks will only intensify. In a world where a single tweet can wipe billions off the market, vigilance is not just advisable—it is essential.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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