Bybit Hack Made Kim Jong Un Crypto's Most Influential In 2025
North Korea’s record-breaking Bybit hack changed how exchanges handle security and even influenced FATF’s global crypto recommendations.
Cryptocurrency exchange Bybit suffered a $1.4 billion hack in February 2025 that exposed structural weaknesses in custody systems long considered industry standards, such as cold storage and multisignature wallets.
At the time, the exploit was the largest known hack in crypto history, though that distinction was later eclipsed by findings that Chinese mining pool LuBian lost $3.5 billion in 2020.
“The [Bybit] hack showed that cold storage and multisig labels are meaningless if the approval flow, transaction visibility, or signer environment can be manipulated,” said Ishai Shoham, head of product at crypto infrastructure company Utila. “After Bybit, custody architecture became a first-order risk topic, not a back-office detail.”
The incident also prompted the Financial Action Task Force (FATF) to urge global regulators to address illicit finance risks in cryptocurrencies, while exchanges tightened transaction approval processes and raised the standard for how breaches are detected and handled.
The FATF is an intergovernmental body that sets standards on money laundering and terrorist financing. Its recommendations are not legally binding, but its members are expected to abide by its standards. For non-members that fall short, inclusion on the FATF gray list could limit access to aid and damage banking relationships.
In a June 2025 report, the FATF cited the Bybit hack as the largest crypto theft ever. It warned that crosschain activity, stablecoins and uneven global enforcement were amplifying illicit finance risks faster than existing controls could contain them.
“The case highlights persistent gaps in the Travel Rule and in enforcement. Once funds move into DeFi, it becomes difficult to prevent layering and money laundering, particularly as automation tools make these processes faster and easier,” Joshua Chu, asset recovery lawyer and co-chair of the Hong Kong Web3 Association, told Cointelegraph.
Related: From Sony to Bybit: How Lazarus Group became crypto’s supervillain
FATF urged jurisdictions to accelerate licensing, supervision and international coordination, framing the incident as evidence that weaknesses in custody and transaction oversight now pose systemic risks to the global financial system. Like the US Federal Bureau of Investigation and countless security experts, FATF linked the exploit to hackers
Source: CoinTelegraph
