Understanding the ByBit Hack for Crypto Noobs Crypto exchanges utilize Hot, Warm, and Cold wallets to keep their funds safe. Hot wallets are wallets the exchange that send and receive transactions every second from the exchanges users. Cold wallets are used to store large amounts of crypto for a longer period of time. Cold wallets are used to top up the balance of the Hot wallets when they get to a determined level. ByBit was doing a routine transfer of ETH from one of their cold wallets to a warm wallet. They utilize Multi-sig which is where multiple signatures need to be given in order for a transaction to be sent. This is a common security measure used by cold wallets. ByBit works along side @safe to help manage their multi-sig cold wallets. Safe is a smart contract cold wallet that uses multi-sig. During their routine cold wallet transfers CEO Ben Zhou said in his live stream "I checked the destination address on the Safe UI to make sure it is our warm wallet address and everything checked out". The original transfer was for 30,000 ETH ($80M). He confirmed the transaction with his ledger and the transfer was made. 30 minutes after the first 30,000 ETH transfer CEO of ByBit Ben Zhou gets an emergency call that their cold wallet has been drained for around 400,000 ETH (1.06B). This is all we know for now, a lot of blockchain analysis people are tracking the hackers wallets so I will update you guys once we know more.