Can Trust Be Restored? – CryptoNinjas
Key Takeaways:
- Hackers exploiting Bybit have laundered more than $335 million in stolen ETH.
- Blockchain data links it to North Korea’s Lazarus Group.
- Bybit’s response is closely observed as a key test of trust in CEXs.
Meanwhile, the crypto world holds its breath as the ripples of the colossal Bybit hack play out. If you follow the news, you would be aware of the initial exploit, which is considered one of the largest of its kind in the history of crypto, and the hackers have been aggressively laundering the stolen funds since then, leading to concerns about market stability and the overall security of centralized exchanges (CEXs). The speed and scale of the operation are alarming and are leading to increased scrutiny and concern over preventative measures.
The $335 Million Laundering Spree
On-chain data shows that in the past 24 hours alone, the perpetrators managed to move an unbelievable amount of 45,900 ETH worth around $113 million. This marks the 135,000 ETH laundered in total, worth over $335 million at the time of writing, according to pseudonymous blockchain analyst EmberCN. “At the current rate,” EmberCN said, “it will only take another 8 to 10 days to clean it all up.” This fast transfer of money also increases the incentive for law enforcement and security companies to track and potentially recover the money.
Bybit 黑客在过去 24 小时洗走了 4.59 万枚 ETH ($1.13 亿)。目前他们一共已经洗走了 13.5 万枚 ETH ($3.35 亿)，接近三分之一了。
现在 Bybit 黑客地址里还有 36.39 万枚 ETH ($9 亿)。以目前的频率只需要再有 8~10 天就洗完了。
本文由 #Bitget｜@Bitget_zh 赞助 https://t.co/nNwpWP0uEE pic.twitter.com/tpIi3LD7FU
— 余烬 (@EmberCN) February 26, 2025
Bybit hacker. Source: EmberCN
The first hack, on February 21, 2025, resulted in the theft of liquid-staked Ether (stETH), Mantle Staked ETH (mETH) and other digital assets, shaking investor confidence and driving concerns of a wider market collapse. It’s a sobering reminder of the vulnerabilities that exist even within established crypto platforms.
More News: Bybit Suffers Massive $1.4 Billion Hack: What You Need to Know
Who’s Behind the Attack? Lazarus Group Suspected
Blockchain security firms such as Arkham Intelligence have blamed North Korea’s infamous Lazarus Group as the probable culprits behind the Bybit exploit. This attribution comes down to analyzing the hacking techniques, as well as the flow of funds and other circumstantial evidence that ties the attack to Lazarus Group’s prior operations.
More News: ZachXBT Identifies Lazarus Group as Bybit $1.4B Hackers, Wins Arkham Bounty
On October 4, just days after the incident, Ben Zhou, Bybit’s co-founder and CEO, came out of his corner and declared “war” on the Lazarus Group. This statement is a fairly strong — though fairly symbolic — but it does mark how seriously Bybit is treating the breach, and its intent to track and pursue the hackers.
Just days after losing over $1.4 billion to theft, Bybit has launched a dashboard for its bounty program, with CEO Ben Zhou declaring “war” on North Korean hackers linked to the attack. https://t.co/1WWoVVRX2R
— Decrypt (@DecryptMedia) February 26, 2025
The Impact on Ethereum Prices
The hack’s immediate impact was felt throughout the Ethereum market. The news of the exploit sparked a sharp price drop, with Ethereum plunging from nearly $2,460 to $2,380 in just one hour on February 26, 2025. The market responded sharply to the news. Ethereum experienced a sell-off, but it has since recovered — trading at around $2,488 (at the time of the article’s publication).
The trading volume surged, reaching 1.2 million ETH on the ETH/USDT pair on Binance in the last 24 hours, doubling from the previous day’s 800,000 ETH. This uptick indicates increased panic selling, highlighting the market’s vulnerability to sudden shocks.
Bybit Hack Is the Largest Crypto Hack in History. Source: Elliptic
Can Bybit Regain Confidence in Centralized Exchanges?
Despite the massive financial loss, Bybit’s swift response has drawn attention as a possible watershed moment for CEX trust. The exchange acted quickly, replacing the $1.4 billion worth of Ether taken, with its reserves fully reinstated within three days of the attack. This move was essential in reassuring users that withdrawals would be paid out.
Dan Hughes, founder of the decentralized finance platform Radix, told Cointelegraph that Bybit’s management of the situation might restore some trust in CEXs moving forward. If Bybit truly is able to absorb the loss as it claims, and will still be able to honor withdrawals, centralised exchanges will prove they can be “trustworthy” and responsible custodians of assets, he said.
Chainflip Takes Action to Prevent Laundering Attempts
In light of the threat posed by the laundered funds, cross-chain decentralized exchange (DEX) Chainflip is implementing a protocol upgrade designed to block the hackers from using its platform. Upgrading to 1.7.10 provides more powerful screening tools, as well as the ability for broker operators such as SwapKit or the Rango DEX aggregator to block unwanted ETH and ERC-20 token deposits. As a precautionary action, this approach intends to protect both liquidity providers (LPs) and typical users while lowering the risk imposed by bad actors laundering their financially obtained money.
This initiative also demonstrates the crypto community’s commitment to combating illicit activities and making the ecosystem safer as a whole. Collaboratively, decentralized and centralized platforms can help establish a stronger and more reliable environment.
The Bigger Picture: Crypto Hacks 2024
This Bybit hack is an unfortunate black eye for the crypto space. It makes up over half of the estimated $2.3 billion stolen in crypto-related hacks thus far in 2024. While such breaches cause huge financial losses for the investors, they make it difficult to restore public confidence in all the digital assets.
This situation underlines the criticality of strong security protocols, frequent audits, and ongoing threat intelligence as keys to securing user funds and protecting the integrity of the crypto ecosystem.
More News: 2024: A Bumper Year for Crypto Hackers
$900 Million Still at Large
Ironically, a total of 363,900 ETH worth almost $900 million still lies in the Bybit hacker’s address. In the following days, a race against time will be played out as investigators scramble to trace the rest of the cash trail that may lead them to the perpetrators, as the crypto community holds its breath in anticipation of a breakthrough that could reclaim the ill-gotten assets and send a strong message to future cyber criminals. Disrupting the financial networks of groups like Lazarus is crucial for the industry’s long-term security strategy against future attacks.
A Case of Past Lazarus Group Operations in Cryptosphere
In 2022, the $625 million Ronin Network hack was attributed to the Lazarus Group, indicating their potential to pull off high-value heists in the crypto space. The group was implicated by the FBI in the hack of Axie Infinity’s Ronin bridge, and the US Treasury Department in April 2022 sanctioned an ETH address thought to belong to the group. A silver lining for defenders is that US authorities tracked the group, providing valuable insights into their operations.
