Arthur Hayes Proposes Ethereum Rollback to Undo $1.4B Bybit Hack

Hayes contends that just as the Ethereum community once chose to override immutability to recover lost funds, a similar rollback could now reverse the illicit transfers and restore nearly $1.4 billion in stolen ETH.

The Bybit Hack at a Glance

The hack was uncovered when on-chain analyst ZachXBT detected unusual outflows exceeding $1.4 billion from Bybit. The attacker swiftly converted large amounts of mETH and stETH into ether via a decentralized exchange. Subsequent transactions saw the hacker splitting roughly 20,000 ETH across multiple addresses, signaling a coordinated effort to obscure the flow of stolen funds. Bybit CEO Ben Zhou confirmed that the breach occurred when a specific ETH cold wallet was compromised, though he reassured that the exchange remains solvent even if the loss isn’t recovered.

Historical Precedents and Controversy

In 2016, the Ethereum network underwent a controversial hard fork to reverse the DAO hack, which had resulted in the loss of $60 million. This decision, while successful in restoring funds, led to the birth of Ethereum Classic as a separate blockchain—a split that still resonates in debates over decentralization and immutability.

Critics of a potential rollback today argue that the ecosystem has grown far more complex. “A rollback now would break bridges, stablecoins, L2s, RWAs and so much more,” noted Gautham Santhosh, co-founder of Polynomial.fi, emphasizing that Ethereum’s interconnected nature makes a clean solution nearly impossible.

Community Reaction and Concerns

Not everyone in the market is on board with Hayes’ proposal. Some voices within the industry warn that altering the blockchain’s history could severely undermine the principle of immutability—a foundational pillar that guarantees the integrity and trustworthiness of decentralized systems. Sina 21st Capital summed up the dilemma: