Bybit, a leading cryptocurrency exchange, was hit by a significant $1.5 billion security breach on February 21, 2025. Despite the scale of the attack, operations at Bybit continued without interruption, with exchange infrastructure remaining intact. Kaiko, an institutional digital asset provider, confirmed that Bybit restored its pre-hack market liquidity in just thirty days, which is a faster recovery than previously seen incidents in the crypto industry.
Bybit's recovery was attributed to strategic innovation, such as the launch of Retail Price Improvement (RPI) orders just one day before the hack, and transparent communication with all stakeholders. These RPI orders, primarily supported by institutional market makers, proved crucial in stabilizing spreads and protecting retail traders during the aftermath by minimizing volatility.
Bitcoin liquidity on Bybit matched pre-hack levels, registering $13 million daily through Q1 2025 according to Kaiko's market depth metrics. Other top 30 altcoins also recovered, with 80% or more of pre-hack liquidity and tightening spreads reflecting reduced volatility in assets like XRP and DOGE. The bid-ask spread, a key indicator of market stress, declined throughout March as market maker participation deepened and order book stability returned.
Bybit's trading volume rebounded rapidly, exceeding recovery rates seen after prior high-profile incidents, including the Bitfinex breach in 2016 and Binance.US regulatory challenges in 2023.
Bybit's response, marked by transparent crisis management and swift implementation of market structure improvements, has set new operational stability and recovery speed benchmarks for the crypto exchange industry.