Cryptocurrency Exchange Bybit's $1 billion cybersecurity exploit was a setback in Crypto Staking's institutional adoption.
On February 21, the Lazarus Group, a North Korea-based hacking work, accessed Bibit's wallet credentials and stole $1.4 billion worth of liquid stake ether (STETH). It was the biggest hack in the industry ever.
Opryshko said that the highly-prominent cybersecurity violations are the allocation of ether (ETH) to cryptographic stakes (ETH) including ether (ETH).
“When an auditor or potential institutional investor evaluates, for example, ETH [exchange-traded fund] And seeing the billion-dollar hack, their legal and compliance team is likely to freeze plans to allocate funds to such assets,” Opryshko told Cointelegraph.
Buybit hacks could also accelerate the ongoing departure of stakers from centralized crypto exchanges (CEXS).
According to Opryshko, over the past six months, CEXS' ETH has fallen by nearly 7% from 8.6 million ETH in September to 8 million ETH in February. The figure fell 0.5% shortly after the Buybit Hack, he added.
“Users will withdraw more and more piling assets from CEXS and move them to presumably curative staking solutions or hardware wallets, perhaps for better security,” Opryshko says.
Bibit Exploit on-chain records. sauce: Etherscan
Related: Ecena guarantees users of Solvency after Bibit Hack
Institutional staking recruitment
The US Ether Exchange-Traded Funds (ETFs) do not allow staking. However, in February, the Securities and Exchange Commission confirmed that it would begin to acquire some of its etheric ETF holdings from issuers such as 21 shares.
Staking is already permitted in European ether ETFs. Analysts hope that regulators will soon allow staking by US ETFs.
As of February 27, Ether ETFS had drawn nearly $3 billion in net inflows since its launch in July, according to data from Farside investors.
They still slowed down Bitcoin (BTC) ETFs significantly, leading the institution's adoption of cryptocurrencies with a net inflow of over $37 billion since January 2024, Farside data shows.
Staking involves locking ether as collateral with validators of the Ethereum blockchain network. Stakers earn ETH payments from network fees and other rewards, but if the verifier cheates, they risk “reducing” or losing “freshing” or ETH collateral.
Other popular cryptocurrencies, including Solana (SOL), also feature staking mechanisms.
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