Bybit Hack: 89% of Stolen $1.4 Billion in Crypto Remains Traceable

Bybit continues its efforts to recover funds lost in the largest crypto exchange hack to date, with blockchain investigators tracking nearly 89% of the stolen assets. The exchange has also paid out $2.2 million to bounty hunters providing crucial intelligence on the transactions linked to North Korea’s Lazarus Group.

The Largest Crypto Hack in History

On February 21, Bybit suffered a devastating security breach, losing over $1.4 billion in various digital assets, including liquid-staked Ether (stETH) and Mantle Staked ETH (mETH). This attack, attributed to the notorious North Korean hacking collective Lazarus Group, sent shockwaves through the cryptocurrency industry.

Blockchain security firms, including Arkham Intelligence, identified Lazarus as the primary suspect as the stolen funds were rapidly shuffled through various transactions to obscure their origins. Despite these laundering efforts, the majority of the stolen assets remain traceable, according to Bybit’s co-founder and CEO, Ben Zhou.

The Ongoing Chase for Stolen Funds

In a March 20 update on X, Zhou revealed that approximately 88.87% of the stolen $1.4 billion is still traceable. He further detailed that:

• 7.59% of the funds have become untraceable.
• 3.54% have already been frozen.
• 86.29% (440,091 ETH worth approximately $1.23 billion) has been converted into 12,836 BTC, dispersed across 9,117 wallets.

Most of these funds have been routed through Bitcoin mixers such as Wasabi, CryptoMixer, Railgun, and Tornado Cash to obfuscate their trail. Despite these obfuscation attempts, blockchain analysts remain confident that a portion of the assets can still be frozen and recovered.

A Race Against Time

The Lazarus Group reportedly took just 10 days to launder all the stolen funds through THORChain, a decentralized cross-chain protocol. However, blockchain security experts stress that more bounty hunters and ethical hackers are needed to counteract these illicit activities.

Bybit has actively encouraged the crypto community to assist in tracking down these assets. According to Zhou, the platform has received over 5,012 bounty reports in the past 30 days, with 63 deemed valid. The exchange is offering a 10% reward on any successfully recovered funds.

Bybit’s Bounty Initiative and Security Concerns

To incentivize further investigations, Bybit has already paid $2.2 million to 12 bounty hunters for valuable insights into Lazarus Group’s transaction patterns. The exchange remains committed to identifying and freezing as much of the stolen funds as possible.

Security experts warn that even exchanges with stringent security protocols remain vulnerable to highly sophisticated cyberattacks. Analysts point out that the Bybit breach was facilitated through advanced social engineering tactics, tricking signers into approving a malicious transaction that drained funds from a cold wallet.

With the Bybit hack surpassing the infamous $600 million Poly Network breach in 2021, it stands as the largest exchange security breach in crypto history. As blockchain security teams intensify their tracing efforts, the crypto community watches closely to see whether Bybit can recover a significant portion of the stolen funds.