Bybit Hack Exposes Ethereum’s Vulnerabilities Amid RWA Tokenization Debate

Ethereum's potential for real-world asset (RWA) tokenization is under scrutiny as recent security breaches and infrastructure limitations raise concerns. The Bybit hack, which led to a staggering $1.5 billion ethereum theft, has highlighted critical vulnerabilities in the network. Pro-crypto lawyer John Deaton and NYU Stern adjunct professor Austin Campbell have pointed out issues with Ethereum's validator system and the risks associated with stablecoins. These developments cast doubt on Ethereum's readiness for large-scale RWA tokenization, a key area of growth in the crypto finance sector. As of August 2025, the industry is grappling with these challenges while maintaining a bullish outlook on digital assets.

Is Ethereum Ready for RWA Tokenization? Industry Experts Share Big Take

Ethereum's suitability for real-world asset tokenization faces scrutiny as security vulnerabilities and infrastructure limitations come to light. Pro-crypto lawyer John Deaton highlighted concerns raised by Austin Campbell, an NYU Stern adjunct professor, regarding Ethereum's validator system and stablecoin risks.

The Bybit hack, which resulted in a $1.5 billion Ethereum theft, exposed critical weaknesses in the network's security framework. Campbell argues these flaws could hinder Ethereum's ability to manage large-scale tokenized asset issuance, particularly given the central role of stablecoins like USDC and USDT on the platform.

Private key vulnerabilities pose additional threats, with potential attackers gaining control over smart contracts. These challenges emerge as the tokenization market experiences rapid growth, placing Ethereum's readiness under intense examination.

ByBit Launches 10x Spot Margin Trading for European Users Under MiCA Compliance

Bybit, the world's second-largest cryptocurrency exchange by trading volume, has rolled out spot margin trading with up to 10x leverage for its European users. The service, compliant with the EU's Markets in Crypto Assets (MiCA) regulations, allows traders to amplify positions using existing crypto holdings as collateral.

The move follows Bitpanda's similar product launch last month, signaling a broader trend of regulated crypto firms expanding Leveraged offerings in Europe. Bybit EU incorporates risk controls including real-time interest rates and liquidation mechanisms to mitigate downside exposure.

"Spot Margin Trading is a powerful tool — but only when paired with transparency, risk education, and user control," said Mazurka Zeng, CEO of Bybit EU. The development highlights how MiCA's regulatory clarity is enabling product innovation while maintaining consumer protections.