A Hack of Historic Proportions

On February 21, 2025, cryptocurrency exchange Bybit suffered the largest hack in crypto history—losing approximately $1.4–1.5 billion in ETH and ERC‑20 tokens from its cold wallet suite. The attackers, later attributed to North Korea’s Lazarus Group, deployed a counterfeit multisig interface to trick Bybit's custodians into approving a malicious transfer—then quickly laundered the stolen funds via decentralized exchanges and mixers.

Read QuantumGenie's other industry insights here.

Why Traditional Security Measures Fell Short

Bybit’s defenses included:

• Multisig wallets: Thought secure due to multiple signatures—but the underlying SafeWallet interface was compromised.

• Cold storage: Still vulnerable because the compromise occurred at the bridge between offline and online systems.

• Audits and hardware security modules: These help—but don’t stop transaction-level manipulation once access is granted.

Repeated hacks across the crypto sector show that human and software vulnerabilities—not hardware—are often the weak points.

Enter Post-Quantum Cryptography (PQC)

Post-quantum cryptography comprises algorithms resistant to both classical and quantum-computer attacks, covering:

• Digital signatures (e.g., CRYSTALS-Dilithium, SPHINCS+)

• Key exchange/key encapsulation (e.g., CRYSTALS-Kyber)

PQC is designed for rigid authentication, stronger validation, and resistance to tampering—even in hostile environments.

Read QuantumGenie's other industry insights here.

How PQC Could Have Prevented or Mitigated the Breach

1. Unforgeable Multi-Signatures
   PQC multi-signature schemes ensure all signers use quantum-secure keys. Even if the interface is compromised, fake transactions cannot pass cryptographic validation.

2. Tamper-Resistant Transaction Signing
   Utilizing quantum-resistant signature checks could enable automatic refusal of any out-of-policy or altered transaction—preventing unauthorized transfers.

3. Safer Bridge Protocols
   By securing the transfer process from cold to hot wallets with PQC, any tampering would be detected immediately, rejecting malicious commands.

4. Enhanced Identity & Interface Security
   PQC-based authentication across wallet UIs and APIs prevents spoofing or session hijacks, making remote interface compromises far less likely.

Real-World Protection: A Hypothetical Comparison

Attack PhaseWhat Happened (Bybit)What PQC Would DoInterface compromiseAttackers injected malicious UI to alter transactionPQC-based validation identifies tampering—rejects the requestSignature approvalSigners unknowingly approved malicious transactionPQC multi-sig prevents any invalid signature from passingFund transfer & laundering$1.4B drained & laundered via mixers and bridgesPQC doesn’t prevent laundering—but prevents the drain itself

While PQC does not eliminate laundering, it stops unauthorized transactions at the root—before funds leave the multisig wallet.

Read QuantumGenie's other industry insights here.

Beyond PQC: A Layered Defense Future

PQC should augment, not replace, current security infrastructure:

• Zero-trust transaction verification

• Real-time integrity checks with policy-aware logic

• Rigorous audits + hardware and software tamper-resistance

By integrating PQC now, crypto platforms would vastly improve resistance to both human error and automated attack chains—while preparing for future quantum threats.

Conclusion: The Cost of Waiting is Too High

Bybit’s catastrophic loss serves as a sobering reminder: current defenses are insufficient. As crypto and finance ecosystems grow, so do threats—from cybercriminal syndicates today and quantum threats tomorrow.

Post-quantum cryptography isn't just about preparing for future quantum computers—it’s about fortifying systems against current, cunning adversaries. In a world where trust and transactions are digital, adopting PQC is not optional—it’s essential.