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  • Crypto Industry Collaboration in the Wake of the Bybit Theft

    Crypto Industry Collaboration in the Wake of the Bybit Theft

    The crypto market is no stranger to major hacks, but the recent Bybit theft set a staggering new record. North Korea-affiliated hackers from the notorious Lazarus Group drained approximately $1.5 billion in ETH from the crypto exchange. Unlike previous disasters involving FTX, Celsius, or Terra, Bybit managed to avoid collapse thanks to swift and coordinated industry collaboration.

    Facing a potential liquidity crisis, Bybit secured emergency support from key crypto firms, includingBinance, Bitget, and Galaxy Digital. Through transparency, decisive action, and collective efforts, the company demonstrated how strong industry collaboration could help exchanges weather even the most severe attacks.

    Binance CMO Rachel Conlans commented on recent cyber attacks in the crypto industry, “The evolving nature of cyber threats in the crypto industry reinforces the need for exchanges and custodians to continuously strengthen their security frameworks. As threats continue to grow in sophistication, so must our defenses. The recent attack was a phishing attack on the UI system, underscoring the importance of securing all aspects of any exchange’s infrastructure, including user interfaces, to protect against such sophisticated threats. This is a wake-up call for the industry to implement multi-layered security, real-time threat detection, and robust risk mitigation strategies. 
    Conlan added, “In the crypto world, trust and security are the cornerstones of crypto adoption, and it is critical that platforms work proactively to keep ahead of emerging risks, guaranteeing user safety and safeguarding user accounts remains the top priority.”

    How the Bybit Hack Unfolded

    In the following sections, we’ll explore exactly how the Bybit hack happened and examine how the crypto exchange navigated the crisis. Let’s dive in!

    The Attack

    The hack began with a targeted compromise of AWS session tokens belonging to a developer at Safe, Bybit’s multisig wallet provider. Lazarus hackers exploited this access by injecting malicious JavaScript code into Safe’s frontend user interface. According to Safe’s detailed post-mortem report, this compromised interface tricked Bybit’s team into signing what appeared to be a legitimate wallet transaction but was in fact unauthorized.

    As a result, Bybit inadvertently approved the transfer of roughly 401,000 ETH—valued at nearly $1.5 billion—to wallets controlled by the hackers. To obscure their trail, the attackers quickly dispersed these funds through numerous intermediary addresses. This strategy, common among sophisticated cybercriminals, aimed to confuse blockchain analysts and hinder tracing efforts.

    The hackers then converted portions of the stolen ETH into other cryptocurrencies, such as BTC and DAI. They utilized decentralized exchanges, cross-chain bridges, and no-KYC instant swap services to move assets between different blockchains and obscure transaction paths.

    Interestingly, the Lazarus Group initially kept a substantial portion of the funds dormant across multiple wallets. North Korean hackers often use this tactic to avoid immediate detection and strategically delay their laundering operations. However, within just ten days following the theft, they successfully laundered 100% of the stolen crypto—approximately $1.4 billion.

    Bybit’s Response

    Bybit’s rapid reaction to the hack proved critical. Within minutes of detecting the breach, the exchange isolated the compromised cold wallet, halting further unauthorized transfers. A forensic investigation was immediately launched, involving blockchain analytics firms, cybersecurity specialists, and law enforcement to track the stolen assets. 
    To prevent similar incidents in the future, Bybit partnered closely with Safe to overhaul its multisig wallet security protocols. The exchange also implemented stricter manual verification processes for high-value transactions and enhanced its wallet infrastructure. These decisive actions helped restore user confidence and stabilize the situation.

    Despite the enormous loss, Bybit reassured customers that all funds remained fully backed and accessible. Notably, the exchange kept withdrawals open, sending a strong signal of transparency. This crucial step helped prevent panic and maintained user trust during an uncertain period.

    How Industry Collaboration Helped Bybit Survive the Aftermath of the Attack

    Collaboration with leading crypto firms was vital in quickly securing Bybit’s financial stability. Within just 72 hours, the exchange raised emergency liquidity, totaling 447,000 ETH through loans and support from Binance, Bitget, and Galaxy Digital. By strategically injecting liquidity rather than purchasing Ether on the open market, Bybit prevented price volatility and rapidly replenished its reserves.

    Transparency remained central to Bybit’s recovery efforts. CEO Ben Zhou publicly addressed users through a live-streamed Q&A just 30 minutes after the breach became public knowledge. In the following days, Zhou continued providing daily updates on fund recovery, security enhancements, and internal investigations.

    To further reassure users, Bybit completed a full proof-of-reserves audit on February 24. The audit independently verified the exchange’s solvency and confirmed that user assets were backed 1:1. This proactive transparency set a new industry standard for crisis management following major hacks.

    Blockchain’s inherent transparency also supported recovery efforts. Public transaction records enabled industry participants and authorities to swiftly trace stolen assets. Through rapid coordination with global exchanges and regulators, more than $40 million worth of the stolen crypto was successfully frozen—highlighting the value of real-time industry cooperation.

    This collaboration extended beyond immediate recovery. Bybit continued working closely with law enforcement agencies and cybersecurity experts to seize additional assets and identify the attackers. These unified efforts underscored the crypto industry’s growing maturity and commitment to security.

    Ultimately, Bybit’s crisis highlighted the increasing importance of collective action. With hackers becoming more sophisticated, industry-wide coordination, transparency, and swift response capabilities are more critical than ever. Bybit’s survival serves as a powerful example of how effective collaboration can help crypto companies overcome even the most severe security threats.

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  • More education, awareness & upskilling are important as we solve some interesting problems in the Web3 space: Chingari CTO Tariq Wali

    More education, awareness & upskilling are important as we solve some interesting problems in the Web3 space: Chingari CTO Tariq Wali

    Mumbai: Launched back in 2018, the short-video app Chingari has made rapid strides. Since then, the home-grown app has emerged as the one-stop destination for entertaining, engaging videos across diverse categories such as dancing, singing, transformation, innovative skills, etc. Chingari’s eclectic platform entertains 150 million+ users across India and witnesses videos in 15+ languages.

    The app has been working towards adding value to its content creators by enabling them to create unique content that gets liked, shared and rewarded through Gari Social Tokens. This fosters content monetisation and puts the power of content creation directly in the hands of the creators. The first Indian social crypto token, Gari, has been listed on several top global centralised exchanges, including HUObi, FTX, KuCoin, Gate.io, OKEx, and MEXC Global. Chingari is bringing the web3 revolution to the creator economy with its Gari token. Gari is now available on the Chingari app, and creators can start making videos and earning Gari Social Tokens.

    Indiantelevision.com caught up with Chingari’s chief technology officer, Tariq Wali. He describes himself as, “There is not a silver bullet to build and run a successful startup. A start-up is anything but its products that don’t just work but delight their users. Technology is an enabler to solve user/business problems. Most of my time goes into what I call building the organisation, and that’s a combination of people, process, product, and technology.

    “I come from a systems/software/video engineering background, having seen scale and disruption in technology enabling startups early on – my engagement could be anything from providing direction to engineering and product to solve complex problems, design and architecture to any trivial issue that impacts Chingari users and ensuring we have the right instrumentation towards the reliability of our products.

    “That said, I lead data, backend, AIML, DevOps/SRE, and product as lead/manager/comrade, ensuring all our investments are protected and setting the vision and building towards our two-year roadmap.”

    Edited Excerpts:

    On the short-video industry that has evolved over the past few years

    Tariq: It has evolved significantly. A lot has happened in the last two to three years. Globally, the video industry has shot up on account of content being consumed digitally in different forms, like connected televisions, mobile devices, short-form content, long-form content, and live linear content. User-generated content (UGC) was one thing that was slightly behind.

    At some point, Tiktok led that race, and when it got banned, it gave birth to homegrown short video apps. That was a few years ago. Now India is leading from the front in the short video space. The UGC short is a real thing. It has created a new industry called the “creator economy.” This is a full-time job that pays money to millions of creators around the world, including in India.

    On web2 platforms, creators and influencers would create content and not get paid for it. But in web3, creators get paid. Chingari is the world’s first social media product on a blockchain and has a blockchain economic design to it. We incentivise content creators to create content. Users are also incentivised to consume that content. The creator economy is an industry like e-commerce.

    On the challenges of growing rapidly at scale

    Tariq: Lack of tech talent. The challenge is that there is rapid growth in tier two and three cities, with improved internet penetration and the exploitation of smartphones. Everyone has access to the internet and social media. They are also getting onto short-form video platforms, which means scale and tremendous growth. Engineering maturity for a tech organisation like ours to have engineering muscle to build products and services to support that kind of growth is very important. Globally, there is a shortage of web3 talent in short-form content.

    For a company like ours, it becomes twice as challenging. We have to attract the right talent. That is where we have to innovate. More education, awareness, and upskilling are all important as we solve some interesting problems in the web3 space. 

    On Chingari’s USP

    Tariq: We have a strong business model that is very unique. Other short-video businesses do not have that. We are a crypto web3 organisation. Web3 is the birth of a new Internet. The Internet that you know of today is a product of the exploitation that has happened over the past two decades. Google, Facebook, Instagram, and Amazon, or “big tech,” created these social media products and amassed massive amounts of user data. That data was exploited by these companies. Users get nothing. On the other hand, web3 is creating a new Internet which is de-centralised, transparent, and borderless.

    Chingari creates products and services around a community. We are about a community, not about a user. The users become the community. Other short video apps are about users and exploiting their data. They run that old rat race. We are not doing that. We build everything for the community, and the community has a say in what we build.

    There is a process of governance. We have 3,00,000 active community members on one of our channels. Then there are another few hundred thousand members on Twitter. We have an open source roadmap. There is a clear visibility of what we are building and why. We have a token system wherein users can buy a token, which shows that they believe in the project. They invest in that token, which has utility. That token acts as a currency on our platform and is called Gari.

    On the business model

    Tariq: Creators make money from creating content. The videos get shared on the network. It gets likes, shares, downloads, and so on and so forth. You make money out of it. The more time users spend on the platform watching and engaging with the content, the more money they make. Our programme is called Gari Mining. It is about engaging with content. You kind of mine the content. The network of users spends time on a daily basis and the pool of tokens is allocated on a daily basis. Both creators and users make money.

    There are other things. We have an NFT marketplace coming up. We have a management and processing fee for the transactions done on the blockchain. Our monetisation opportunities are around NFTs, the token utility use cases. There are also a small number of crypto-led advertisements and partnerships.

    On Chingari app’s usage and targets that have been set for the year

    Tariq: We have nearly one million crypto users on the platform. We have 45 million users on the short video side. We have a significant number of users converting to the crypto wallet. The Gari miners spend a significant amount of time on the platform. Their engagement is unparalleled compared to any other short video app in the world. Some spend hours watching content as they get paid for it.

    We are definitely on-boarding a lot more crypto users this year. The aim is to take on board as many as possible. We are scaling short video, which is our core product, to transition it to be a pure-play web3 product. There will be a social media component to it. We have audio rooms. We are building a live video which will also have rich crypto integration in it.

    On trends being seen in terms of the kind of short form content being consumed

    Tariq: There is a wide range of content available, including dance, music, motivational, DIY, fitness, and sports. There is a higher tendency for people to consume more dance and entertainment content.

    On the app’s tech features that help users create more innovative content

    Tariq: We have significantly invested in the cameras. That is a USP for us. We have made that experience seamless for creators to create beautiful, high-quality videos. We have given them the right set of tools to create those videos and service them on the platform. Then there are features like boosting one’s profile or boosting one’s post with tokens. You can ensure that your post gets viral and has a wider reach. The success of our platform lies in A.I. ML.

    Everything is intelligently processed. The content gets uploaded and it is then moderated, classified, and categorised to determine its premiumness. Content is run through the recommendation pipeline. So ultimately, there is a multi-stage AI/ML recommendation and content management system that gives the right kind of content to the user at any given point of time.

    On regional languages

    Tariq: We work in 13 languages. We are going international. We have Indonesia, Turkey, and the US. We will enter Europe. There is good interest both in the token and in the product. Tamil and Telugu are doing really well in India. Regional is the future, though the majority of content consumption in India is still in Hindi and English.

    On the role of NFTs and crypto for the Chingari app

    Tariq: We are building an NFT video marketplace. To some extent, web3 NFTs have been associated with art and music. But nothing is there around video, especially with UGC. We are the first ones to really build it. The goal isn’t just to be the first to do it. We are solving a very unique problem. The creator economy has massive potential globally. We are solving this with crypto through web3, transparent incentivisation and engagement. Now we are taking things to the next level with a creator-led NFT marketplace where anybody can basically create, buy, sell, mint, and auction UGC videos. We reckon it will fare well.

    On the confusion regarding crypto regulation

    Tariq: I think that with any innovation that has the potential to disrupt incumbent industries, those industries view it as a threat. Crypto can disrupt the banking, finance, and insurance industries. The government and the industry realise this. Policymakers recognise it. So there is going to be some amount of resistance. India has 100 million users in the crypto space, and a lot of good people realise the potential that crypto and web3 have. It shows that India is leading from the front in web 3. Polygon and Chingari are examples. India has the largest web developer talent in the world. We have to capitalise on that.

    There is massive potential for other verticals as well, like tech, healthcare etc. Regulatory pressure will be there. There will be resistance, but it will sort of become conducive at some point, one way or another. Crypto projects are such that one keeps building and solving things, innovating. That is the philosophy. The process of creating a new Internet is not going to be easy. You are going to be disrupting things. There will be challenges and hurdles, but we have to marry them.

    On the importance of e-commerce in terms of building a creator economy

    Tariq: I don’t think we have cracked that nut really well. There is potential in the short video space for e-commerce, but our focus is a lot on the user experience. We do not want to introduce anything intrusive that hampers the user experience.

    On the boost that Jio, 5G have given the short video industry

    Tariq: The quality of experience and services needs to improve for the video industry. Our backbone systems have to improve a lot. If 5G is the answer, then it has to scale and fly, but I do not think that it has made a big difference as yet for the commercial or consumer Internet. There is still network congestion in many cases in a city like Bengaluru, but it is a very important problem that needs to be solved by telcos and the government. We do have the benefit that data here is far cheaper than in other countries, but the download and bandwidth improvement that we are promised with 4G or 5G needs to happen.

    On data privacy

    Tariq: It is very important. It is a significant part of everything that we do. It is about security being layered into how and what we build.

    On fund raising plans and an M&A possibility

    Tariq: Yes, we are in discussions to raise funds. The sentiment towards funding should be positive because, as I said, we are building in the web3 and crypto space. Engineering muscle and capital are needed to solve interesting problems. We are positive about our future due to the problems that we are solving and the roadmap and community that we have. We are not looking to acquire anyone.

    On the factors that determine valuation

    Tariq: “Valuation” in our case is about what we are doing, the roadmap. Of course, it is about users, engagement, growth, and expansion. It is also about the vertical that you are in. I think that on that checklist we are really green. We scored really well on those points. We are the first short video platform of this scale on the blockchain. It is not just that we are on blockchain. We are doing something really unique and interesting in a way that nobody else is doing. Instagram, Youtube, and Tiktok cannot do it. But we are doing it.