Shocking Revelation: Bybit CEO Unveils Two-Thirds of Lazarus-Hacked Funds Still Traceable
Hold onto your hats, crypto enthusiasts! The aftermath of the massive Bybit hack by the notorious Lazarus Group is still unfolding, and the latest update from Bybit CEO Ben Zhou is nothing short of gripping. In a recent announcement, Zhou revealed that a significant portion – almost 70% – of the staggering $1.4 billion stolen in February remains traceable. Yes, you read that right! Despite the sophisticated tactics employed by the hackers, a considerable chunk of the digital loot is still within reach, offering a glimmer of hope in the fight against crypto crime.
Unveiling the Traceable Funds: Where Does the Money Trail Lead?
According to Bybit CEO Ben Zhou’s executive summary posted on X, a whopping 68.6% of the Bybit hack funds are still traceable. This is a significant figure, especially considering the Lazarus Group’s reputation for sophisticated money laundering techniques. In contrast, 27.6% of the funds have vanished into the digital abyss, labeled as “gone dark,” while a small 3.8% has been successfully frozen. This breakdown provides a clearer picture of the battle between exchanges and cybercriminals in the high-stakes world of cryptocurrency.
But how did the hackers attempt to launder such a massive amount of crypto, and why are so many funds still traceable? Zhou shed light on the methods used, explaining that the untraceable funds primarily flowed through crypto mixers, then hopped across bridges to peer-to-peer (P2P) and over-the-counter (OTC) platforms. These mixers are designed to obfuscate the origin of crypto transactions, making it harder to follow the money trail.
The Role of Crypto Mixers: Wasabi, Tornado Cash, and Railgun
Zhou specifically pointed out Wasabi as the primary crypto mixer used by the Democratic People’s Republic of Korea (DPRK), which is associated with the Lazarus Group. After the initial mixing via Wasabi, a smaller portion of the Bitcoin (BTC) then moved through other mixers like CryptoMixer, Tornado Cash, and Railgun. This multi-layered approach highlights the complexity of tracking illicit crypto flows.
To illustrate the scale, Zhou confirmed that 944 Bitcoin, valued at around $90 million, went through the Wasabi mixer alone. This substantial amount underscores the challenge faced by exchanges and law enforcement in recovering stolen assets that are funneled through these anonymizing services.
Cross-Chain Chaos: THORChain and the Web of Exchanges
The journey of the stolen funds didn’t stop at mixers. The Lazarus Group utilized a network of cross-chain and swap services to further complicate the tracking process. Platforms like THORChain, eXch, Lombard, LI.FI, Stargate, and SunSwap played a role in these complex transactions before the loot eventually landed on P2P and OTC services.
A significant portion, 432,748 Ether (ETH) – about 84% of the total Ether stolen and worth roughly $1.21 billion – was transferred from the Ethereum blockchain to Bitcoin via THORChain. Astonishingly, around two-thirds of this, approximately $960 million worth of Ether, was converted into a massive 10,003 BTC across a staggering 35,772 wallets. This intricate web of transactions shows the lengths to which cybercriminals go to launder their ill-gotten gains.
Despite the hackers’ efforts, around $17 million worth of Ether remains on the Ethereum blockchain, spread across 12,490 wallets, according to Zhou’s report. This remaining amount, along with the traceable funds that passed through crypto mixers and exchanges, is the focus of ongoing recovery efforts.
Breakdown of Stolen Crypto Funds
| Status | Percentage |
|---|---|
| Traceable | 68.6% |
| Gone Dark | 27.6% |
| Frozen | 3.8% |
Source: Bybit Executive Summary
Bounty Hunters to the Rescue? Bybit’s $2.3 Million Reward Payout
In a bid to recover the traceable funds and crack the code of crypto mixers, Bybit launched the Lazarus Bounty program in February, offering a colossal $140 million in rewards for valuable information. Zhou revealed that Bybit has already paid out $2.3 million to 12 bounty hunters, with the majority going to the Mantle layer-2 platform. Mantle’s efforts alone led to the freezing of $42 million worth of stolen funds – a testament to the potential of collaborative efforts in combating crypto crime.
However, Zhou also highlighted the need for more skilled bounty hunters who can “decode mixers,” emphasizing that this is a crucial area where they require significant assistance. Out of 5,443 bounty reports received in the past 60 days, only 70 were deemed valid, indicating the complexity and specialized skills required to effectively track funds through sophisticated laundering techniques.
eXch Exchange Shutters Amidst Laundering Allegations
The ripple effects of the Bybit hack continue to be felt across the crypto landscape. Recently, the eXch crypto exchange announced its closure, effective May 1st, following allegations that the platform was used to launder funds from the Bybit hack. This development underscores the intense scrutiny and pressure faced by exchanges in the wake of major security breaches and the ongoing fight against illicit crypto activities.
What Does This Mean for Crypto Security?
- Traceability is Key: The fact that two-thirds of the funds are still traceable demonstrates that even sophisticated hacking groups like Lazarus Group are not entirely successful in erasing their tracks in the blockchain world. This is a win for transparency and highlights the inherent traceability of blockchain technology.
- Mixer Challenge: Crypto mixers remain a significant hurdle in tracking stolen funds. Bybit’s call for bounty hunters who can “decode mixers” underscores the urgent need for innovative solutions to penetrate these anonymity-focused services.
- Collaboration is Crucial: The success of Mantle in freezing $42 million highlights the power of collaboration between exchanges, security firms, and bounty hunters. A united front is essential to effectively combat crypto crime.
- Exchange Vigilance: The eXch exchange closure serves as a stark reminder of the responsibility exchanges bear in preventing money laundering and maintaining the integrity of the crypto ecosystem.
The Fight Continues
The Bybit hack serves as a powerful reminder of the ever-present threats in the crypto space. While the revelation that a majority of the funds remain traceable offers a sense of cautious optimism, the ongoing battle against cybercrime in the crypto world is far from over. Bybit’s proactive approach, including the bounty program and transparent communication, sets a positive example for the industry. As technology evolves, so too must the strategies for safeguarding digital assets and追蹤ing those who seek to exploit vulnerabilities. The call for skilled bounty hunters to crack crypto mixers is a clear indication that the next chapter in this saga will be defined by innovation and relentless pursuit of justice in the digital realm.
