The recent hack on the crypto exchange Bybit has sent shockwaves through the digital currency community, with CEO Ben Zhou revealing that over 77% of the stolen funds remain traceable. In a detailed update shared on X, Zhou emphasized the critical nature of the coming weeks, stating, “This and the coming week is critical for fund freezing as the funds will start to clear at exchanges, OTC, and P2P.” This warning follows the hackers’ attempts to launder and convert stolen funds into cash.
A staggering 417,348 ether (ETH), valued at approximately $1 billion, can still be tracked on the blockchain after the hackers utilized privacy-focused THORChain for movement. However, around 20% of the stolen assets, which accounts for roughly 79,655 ETH or $200 million, have seemingly “gone dark” through ExCH, leading to concerns about the future recovery of these assets.
In addition, a smaller yet significant portion of the funds, approximately 40,233 ETH or $100 million, crossed through OKX’s web3 proxy, although 23,553 ETH, valued at $65 million, remains untraceable. Zhou disclosed a remarkable detail: the hackers have converted 83% of the stolen ETH—361,255 ETH or $900 million—into Bitcoin (BTC) and distributed it across 6,954 wallets, achieving an average of 1.71 BTC per wallet via THORChain.
This surge in illicit activity has not gone unnoticed within the larger decentralized finance ecosystem. THORChain recorded a staggering processing volume of $4.66 billion in swaps for the week ending March 2, marking the highest tally on record and generating over $5.5 million in fees from these questionable transactions.
The scale of the attack raises alarms about the security mechanisms surrounding crypto exchanges. The Bybit breach, allegedly executed by the North Korean hacking group Lazarus, involved injecting malicious code into SafeWallet—a third-party wallet platform utilized by the exchange. This cyber intrusion compromised a developer’s device, allowing the attackers to manipulate a routine wallet transfer and extract nearly $1.5 billion in ETH.
In the wake of the incident, Bybit took swift action to ensure customer confidence, returning to a 1:1 backing of client assets just days after the attack. Reports indicate that more than $400 million were procured through over-the-counter trading, along with an additional $300 million sourced directly from exchanges.
As the situation evolves, stakeholders and investors alike remain vigilant, watching for developments in both the recoverability of the stolen assets and the effectiveness of the measures being implemented to secure exchanges against future threats.
