Bybit CEO Reveals 20% of Stolen $1.4B Funds Have Disappeared

In a shocking revelation, Bybit CEO Ben Zhou announced that approximately 20% of the $1.4 billion stolen from the cryptocurrency exchange has become untraceable. This update comes in the wake of a significant hack attributed to the North Korean hacking group Lazarus, which exploited vulnerabilities in Bybit's security systems.

Ben Zhou

Key Takeaways

• 20% of the stolen funds, amounting to $280 million, are now untraceable.

• 77% of the stolen funds remain trackable, with ongoing efforts to recover them.

• The hackers utilized THORChain to convert a significant portion of the stolen Ethereum (ETH) into Bitcoin (BTC).

Overview Of The Hack

The hack, which occurred in February, resulted in the theft of around 500,000 ETH from Bybit's reserves. Zhou's update highlights the challenges faced by investigators as they attempt to trace the stolen assets before the hackers can fully liquidate them.

The attack was executed by compromising a developer's device, allowing the hackers to inject malicious code into SafeWallet, a third-party wallet platform used by Bybit. This breach enabled the hackers to siphon off nearly $1.5 billion in ETH during a routine transfer.

Movement Of Stolen Funds

According to Zhou, the stolen funds have been fragmented and moved across various platforms, complicating recovery efforts. Here’s a breakdown of the current status of the stolen assets:

1. Total Stolen Funds: $1.4 billion (approximately 500,000 ETH)

2. Traceable Funds: 77% (around $1.07 billion)

3. Gone Dark: 20% (approximately $280 million)

4. Frozen Funds: 3% (around $42 million)

The hackers have converted about 417,348 ETH (valued at roughly $1 billion) into BTC, distributing it across 6,954 wallets, each holding an average of 1.71 BTC. This fragmentation makes tracking the funds increasingly difficult for forensic teams.

Ben Zhou

The Role Of THORChain

A significant portion of the stolen ETH was funneled through THORChain, a decentralized exchange known for its privacy features. Zhou noted that 72% of the total stolen funds were processed through THORChain, which has seen a surge in activity due to the laundering of these stolen assets. In the week ending March 2, THORChain processed a record $4.66 billion in swaps, generating over $5.5 million in fees from these transactions.

Recovery Efforts

In response to the hack, Bybit has engaged bounty hunters and security firms to assist in freezing the stolen funds. Zhou reported that 11 parties have helped freeze $42 million of the stolen assets, with Bybit paying out $2.178 million in rewards for these efforts. The exchange has also partnered with a Web3 security firm to enhance its blockchain forensics and maximize asset recovery.

Zhou emphasized that the next one to two weeks are critical for freezing additional funds before the hackers attempt to cash out through exchanges, over-the-counter (OTC) trading desks, and peer-to-peer (P2P) networks. The urgency of the situation is underscored by the fact that the hackers have already begun laundering operations through various platforms, making it imperative for investigators to act swiftly.

As the situation develops, the cryptocurrency community remains vigilant, closely monitoring the actions of the hackers and the ongoing recovery efforts by Bybit and its partners.

Sources

• Bybit CEO confirms that $280M of the stolen $1.4B is no longer traceable - CoinJournal, CoinJournal.

• 20% Funds from Bybit Hack Went Dark: Ben Zhou, The Crypto Times.

• Bybit CEO: 20% of $1.4B stolen funds ‘gone dark’ - PANews, PANews.

• Bybit CEO: 20% of $1.4B stolen funds ‘gone dark’, Cointelegraph.

• Bybit CEO: 20% of the Stolen Funds Moved to Black Market, NameCoinNews.