Six weeks after suffering one of the most damaging hacks in crypto history, Bybit is moving to reassure institutional clients with a new security-first initiative. The exchange has partnered with Zodia Custody—a regulated digital asset custodian supported by legacy finance powerhouses like Standard Chartered—to implement a more secure trading environment for high-volume clients.

Through this integration, institutional users will be able to execute trades on Bybit while keeping their assets stored securely with Zodia in fully segregated custody. This structure reduces on-exchange risk by decoupling trading activity from asset storage, effectively protecting client funds from potential exchange-based vulnerabilities or liquidity crises.

The model also avoids the commingling of user assets, a key concern following the collapse of platforms like FTX, where blurred custodial lines led to massive losses.

Bybit’s move signals a strategic shift toward more transparent and trust-based relationships with institutions, aligning with emerging expectations around risk management in the post-FTX crypto landscape.

Details of the February Hack

In February 2025, Bybit became the victim of one of the largest crypto heists on record, losing approximately $1.45 billion in digital assets to an orchestrated cyberattack that exposed critical vulnerabilities in its wallet management infrastructure.

The hack occurred during a scheduled movement of funds from Bybit’s cold storage—wallets disconnected from the internet—to a warm wallet, which maintains limited online access to facilitate withdrawals and operational liquidity.

According to sources close to the investigation, the transfer process inadvertently exposed the warm wallet to unauthorized access, allowing hackers to intercept the transaction and take full control of a large Ethereum wallet.

Once they gained access, the attackers—who have since been identified by U.S. security agencies as the notorious DPRK-backed Lazarus Group—swiftly moved the stolen funds through a series of anonymizing transactions, sending assets across multiple addresses and decentralized exchanges to obfuscate the trail.

Blockchain analysts noted that the attackers used advanced methods to break up the funds and mix them through privacy tools, making recovery efforts significantly more challenging.

Industry-Wide Security Initiatives

Zodia Custody is a digital asset custodian backed by prominent financial institutions, including Standard Chartered Bank, SBI Group, Northern Trust, and National Australia Bank.

Headquartered in London, Zodia Custody is registered with regulatory bodies such as the Financial Conduct Authority (UK), Central Bank of Ireland, Luxembourg’s Commission de Surveillance du Secteur Financier, and the Hong Kong Companies Registry.

This regulatory compliance ensures adherence to stringent financial standards and offers clients confidence in the security of their assets.

Zodia Custody offers tailored digital asset custody solutions for institutional clients, seamlessly integrating technological innovation with robust regulatory compliance. The firm’s commitment to security, compliance, and client-centricity positions it as a reliable partner for institutions navigating the complexities of the digital asset landscape.

Bybit’s collaboration with Zodia Custody reflects a developing trend in the cryptocurrency industry, where exchanges are increasingly seeking partnerships with reputable custodians to bolster security measures and restore investor confidence. This strategic alliance aims to provide Bybit’s institutional clients with enhanced asset protection, mitigating risks associated with on-exchange vulnerabilities.

Quick Facts

• Bybit has partnered with Zodia Custody to boost institutional asset security following a $1.45 billion hack.
• Zodia offers fully segregated custody, allowing clients to trade on Bybit while assets remain off-exchange.
• The partnership aims to reduce exposure to on-platform vulnerabilities.
• This move aligns Bybit with institutional expectations around transparency, compliance, and risk mitigation.