The individual behind the Bybit hack, one of the most significant thefts in crypto history, has successfully laundered the entire $1.4 billion worth of assets taken. However, there is hope that blockchain security experts may still manage to recover some of the stolen funds.
On February 21, Bybit fell victim to a major hack, resulting in the theft of liquid-staked Ether (STETH), Mantle Staked ETH (mETH), and other ERC-20 tokens, totaling more than $1.4 billion. This breach became the largest crypto theft on record.
The hacker has since moved nearly all of the stolen 500,000 Ether (ETH), valued at around $1.04 billion, mainly through the decentralized cross-chain platform, THORChain, as reported by blockchain security firm Lookonchain on March 4:
“The Bybit hacker has laundered all the stolen 499,395 $ETH ($1.04B currently), mainly through #THORChain.”
Blockchain analysts have pointed to North Korea’s Lazarus Group as the primary actor behind the attack, with several firms, including Arkham Intelligence, linking the group to the theft. This news comes after South Korean authorities sanctioned 15 North Koreans for allegedly funding the country’s nuclear weapons program through similar cyberattacks and crypto heists.
Despite the complex laundering methods, blockchain security specialists remain optimistic that a small portion of the stolen funds could be recovered by Bybit.
Potential for Fund Recovery Despite the hacker’s extensive use of mixers and cross-chain swaps, some of the laundered funds may still be traceable. Deddy Lavid, co-founder and CEO of Cyvers, a blockchain security firm, noted:
“While laundering through mixers and cross-chain swaps complicates recovery, cybersecurity firms leveraging on-chain intelligence, AI-driven models, and collaborating with exchanges and regulators still have small opportunities to trace and potentially freeze assets.”
He further explained that a swift response is critical in such cases, as tracing becomes more difficult once the stolen assets are deeply obfuscated. Prevention is most effective either before or during the hack itself.
On March 4, Bybit CEO Ben Zhou confirmed that around 77% of the stolen funds are traceable. However, more than $280 million has been lost, and roughly 3% of the stolen assets have been frozen.
Bybit, meanwhile, has continued to facilitate customer withdrawals and fully replaced the stolen $1.4 billion in Ether by February 24, just three days after the attack.
Crypto security firms, including Cyvers, are focusing on preventative measures to counteract future attacks. One such solution, off-chain transaction validation, could potentially prevent up to 99% of crypto hacks and scams. Michael Pearl, Cyvers’ Vice President of GTM strategy, shared that this technique involves preemptively simulating and validating blockchain transactions in an off-chain environment.
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