Bybit Hack Fallout: Arthur Hayes Proposes Ethereum Rollback Amid $1.4b Theft, Critics Warn of Ecosystem Risk
Key Points:-
- Arthur Hayes Ether holder placed an idea of an Ethereum rollback as a solution to the Bybit hack.
- Other market participants are worried about the Ethereum Ecosystem, a potential rollback would break its ecosystem.
- Ethereum is now stuck between a rock and a hard place, as explained by Sina, the 21st capital.
On Friday(21st Feb) Bybit exchange lost $1.4 billion in a hacker attack. Arthur Hayes, BitMEX co-founder and major ether holder, asked Ethereum co-founder Vitalik Buterin to roll back the network in order to assist hacked exchange Bybit.
Arthur Hayes said on X:
“@VitalikButerin will you advocate to roll back the chain to help @Bybit_Official. My view as a mega $ETH bag holder is that $ETH stopped being money in 2016 after the DAO hack hard fork. If the community wanted to do it again, I would support it because we already voted no on immutability in 2016. Why not do it again?”
On 21st February on-chain analyst ZachXBT noted a suspicious outflow of $1.4 billion from the exchange, the attacker quickly changing mETH and stETH for ether through a decentralised exchange.
Gautham Santhosh, co-founder of Polynomial.fi, explained on X that the attacker split 10,000 Ethereum to 39 different addresses and another 10,000 Ethereum to 9 more different addresses.
Bybit CEO Ben Zhou said that the hacker took control of the ETH cold wallet and transferred all the ETH in the cold wallet to these unidentified addresses. Zhou confirmed that the exchange “is solvent even if this hack loss is not recovered.”
To find out these unidentified addresses there is a potential way to roll back the blockchain. It involves reverting the blockchain to a state before the occurrence of that specific event. Implementing a rollback requires consensus from the network participants. That way, unfortunate transactions resulting from the hack can be erased, effectively restoring the lost or stolen funds.
Ethereum Hard Fork in 2016
For example, in 2016 Ethereum network roll-backed using a hard fork to reverse a theft of $60 million in ether from The DAO. In 2019 Binance’s CEO Changpeng Zhao and his team were considering pushing for a rollback on the bitcoin network after a $40 million hack.
However, this idea was criticized by the Bitcoin mining community for going back against the principle of decentralization and immutability, which are fundamental to blockchain technology.
Sina 21st Capital said on X:
“Ethereum is toast. They can roll back the chain and destroy what is left of the decentralization claim or allow North Korean baad actors to keep $1.4B of ETH and unleash an eternal internal battle. Either way, it is terrible.”
Coinmarketcap data shows that in 24 hours, Ether dropped nearly 3% but continuously traded between the price range of $2,600 and $2,800.
