Bybit Hack: Crypto Exchnage eXch Under Fire for Allegedly Processing Stolen Funds
The post Bybit Hack: Crypto Exchnage eXch Under Fire for Allegedly Processing Stolen Funds appeared first on Coinpedia Fintech News
The crypto world is buzzing with controversy after hackers stole a staggering $1.4 billion from Bybit on February 21, making it the biggest crypto hack in history. The attack, which saw cybercriminals gain control of Bybit’s Ether multisig cold wallet, has been linked to North Korea’s Lazarus Group. In trailing news, North Korean hackers have started laundering funds stolen from Bybit, with blockchain intelligence firm Elliptic tracking over $140 million in suspicious transactions. Interestingly as per the report, the attackers are mostly using decentralized exchanges and anonymous crypto services to cover their tracks before converting the stolen assets into Bitcoin. The entire process is so complex that it is harder for the authorities to trace the stolen funds.
The Bybit hack, which took place on Friday, has now been confirmed as the largest crypto theft in history, with $1.46 billion stolen, primarily in Ethereum. This surpasses the 2021 Poly Network hack, which saw $611 million stolen. The attackers, linked to North Korea’s Lazarus Group, swiftly spread the stolen ETH across 50 wallets, each containing around 10,000 ETH. Since then, the funds have been moved, swapped for Ethereum-based assets, and are now being converted into Bitcoin, making tracking and recovery efforts more challenging.
Elliptic suggests that if the hackers follow their usual tricks, they might soon try to hide the stolen money using Bitcoin mixers, which make it harder to trace transactions. But moving such a huge amount of stolen crypto won’t be easy. Blockchain experts and law enforcement are keeping a close watch, making it difficult for the hackers to cash out without getting caught.
Bybit Faces Massive Withdrawals
Following the breach, Bybit users have rushed to withdraw their funds, fearing further security risks. According to Arkham Intelligence data, approximately 23,000 BTC ($1.7 billion) has been withdrawn from Bybit’s hot wallets, reducing its Bitcoin reserves from 70,000 BTC to just over 52,000 BTC. In total, Bybit has seen over $6 billion in crypto outflows since the hack, raising concerns about the platform’s liquidity.
Despite the panic, Bybit CEO Ben Zhou reassured users that the exchange remains solvent and that no customer funds were lost. More than 350,000 withdrawal requests were processed in the aftermath of the attack, demonstrating the platform’s ability to handle large outflows.
Exchange on Trouble?
Elliptic and blockchain investigator ZachXBT have accused the crypto exchange eXch of processing “tens of millions of dollars” in stolen funds despite direct requests from Bybit to block the transactions. eXch, however, denied any wrongdoing, claiming the allegations were false and based on a bias against privacy-focused exchanges. They also stated that some of the processed funds would be donated to open-source privacy initiatives.
With blockchain security teams and law enforcement closely monitoring the stolen funds, the hackers may face difficulties cashing out their loot. However, North Korea’s Lazarus Group has a history of successfully laundering billions in crypto, fueling concerns about their ability to evade detection once again.
The investigations on this matter are still going on, and whether more funds will be recovered remains to be seen.
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