Arthur Hayes Proposes Ethereum Rollback to Recover $1.4B From Bybit Hack, Faces Community Criticism

Arthur Hayes Suggests Ethereum Rollback After $1.4B Bybit Hack, Facing Harsh Criticism

BitMEX co-founder and prominent Ethereum (ETH) investor Arthur Hayes has sparked controversy by suggesting a rollback of the Ethereum blockchain to assist Bybit, which recently suffered a $1.4 billion hack. His remarks were met with strong opposition from the Ethereum community.

Hayes’ Controversial Proposal

Hayes took to social media platform X to directly ask Ethereum co-founder Vitalik Buterin whether he would consider advocating for a rollback to help Bybit recover its lost funds.

“@VitalikButerin will you advocate to roll back the chain to help @Bybit_Official?” Hayes posted.

He further elaborated on his stance, stating, “My own view as a mega $ETH bag holder is that $ETH stopped being money in 2016 after the DAO hack hard fork. If the community wanted to do it again, I would support it because we already voted no on immutability in 2016—why not do it again?”

As of the time of publication, Buterin has not publicly responded to Hayes’ query.

Feasibility and Community Reaction

While some observers, including journalist Laura Shin, questioned whether Hayes’ post was meant as a joke, others engaged in serious discussions about the feasibility of such a move.

“I wish we could roll back for the Bybit hack. I’m not against the idea. But the DAO hack was 15% of ETH with a clean recovery path. Today, a rollback would break bridges, stablecoins, L2s, RWAs, and so much more. The ETH ecosystem is just too interconnected now for a clean solution like 2016,” said Gautham Santhosh, co-founder of Polynomial.fi.

Understanding Blockchain Rollbacks

A blockchain rollback involves reversing transactions by reverting the chain to a state before a specific event, such as a hack. This method effectively erases malicious transactions, restoring lost funds. However, such an action requires widespread consensus among network participants.

Ethereum underwent a similar revision in 2016 when a controversial hard fork was implemented to recover $60 million in stolen ether from The DAO hack. The move resulted in a split between Ethereum (ETH) and Ethereum Classic (ETC). Notably, the term “rollback” was not used at the time; instead, it was referred to as an “irregular state transition.”

The debate over immutability resurfaced in 2019 when Binance CEO Changpeng Zhao briefly considered a rollback following a $40 million Bitcoin hack. The idea, later reframed as a “re-org,” was ultimately abandoned after backlash from the Bitcoin community.

Why an Ethereum Rollback Is Unlikely

Unlike in 2016, Ethereum’s current structure makes a rollback nearly impossible. The network’s use of “accounts” to store ether, rather than a UTXO-based model like Bitcoin, complicates any effort to reverse transactions. Additionally, today’s Ethereum ecosystem is deeply interconnected, with smart contracts, bridges, and stablecoins relying on its existing state. Any rollback could have far-reaching and destabilizing consequences.

While smaller blockchain networks have executed rollbacks in the past—such as Vericoin—Ethereum’s scale and complexity make this approach far less viable today.

Bybit Hack and Its Aftermath

The Bybit hack was first flagged on Friday when blockchain investigator ZachXBT identified suspicious outflows totaling over $1.4 billion. The stolen assets were quickly swapped from mETH and stETH to ether (ETH) via a decentralized exchange.

Further investigation by ZachXBT identified the North Korean Lazarus Group as the perpetrators. The attackers distributed the stolen ether across multiple wallets, transferring 10,000 ETH to 39 addresses and another 10,000 ETH to nine additional addresses, according to Polynomial.fi’s analysis.

Bybit CEO Ben Zhou confirmed that the attacker had gained control over a specific ETH cold wallet, transferring all assets to an unidentified address. Despite the massive loss, Zhou assured users that the exchange remains solvent even if the funds are not recovered.

Conclusion

Hayes’ rollback suggestion has reignited discussions about blockchain immutability, but Ethereum’s current structure and complexity make such a move highly impractical. While the Bybit hack has had significant repercussions on the market, it is unlikely to lead to the kind of drastic network intervention seen in 2016.

Read more: Ether Price Spikes Further on Reports of Bybit Starting to Buy ETH