How Canada dodged the biggest crypto hack in history – The Logic How Canada dodged the biggest crypto hack in history – The Logic

In February, the largest hack in cryptocurrency history struck Bybit, which has blamed a North Korean group for seizing almost $1.5 billion in Ethereum from customers’ accounts. Canadian customers, however, were mostly unaffected, as the crypto exchange platform exited the country’s market in 2023 after a crackdown by its securities regulators.

The crypto industry operated in a legal gray area for several years, but Bybit had agreed by June 2022 to abide by the rules of the Ontario Securities Commission while pursuing registration. Less than a year later, the company pulled out of the registration process, telling its Canadian customers it would liquidate their positions by September of that year if they didn’t withdraw.

Osler’s Matthew Burgoyne, Chair of the Digital Assets and Blockchain practice, tells The Logic that Canadian regulators’ registration requirement for crypto exchange platforms provides users a level of protection, as they must insure user funds and maintain cybersecurity controls.

“It wouldn’t have protected the hack,” Matthew says. “But it would have ensured that there would be insurance proceeds available.”

Of course, regulators cannot guarantee against hacks like the one that hit Bybit, apparently initiated through targeted phishing attacks.

“There’s nothing that you can codify and enforce by way of a regulation or best practice that will absolutely prevent that.”

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