Bybit Hack Update: $1.4 Billion Still Traceable as Investigators Pursue Lazarus Group

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The crypto industry was rocked by the largest cyber theft in history when Bybit suffered a staggering $1.4 billion hack on February 21. Despite the attackers’ efforts to launder the stolen assets, blockchain investigators report that over 88% of the funds remain traceable.

Bybit Hack: A Massive Breach

The attack resulted in the theft of liquid-staked Ether (stETH), Mantle Staked ETH (mETH), and other digital assets. Blockchain security firms, including Arkham Intelligence, have identified North Korea’s notorious Lazarus Group as the prime suspect. The hacking group has been actively swapping and funneling funds through crypto mixers like Wasabi, CryptoMixer, Railgun, and Tornado Cash in an attempt to obscure the transaction trails.

Despite these efforts, Bybit’s CEO Ben Zhou confirmed in a March 20 X post that 88.87% of the hacked funds remain trackable. The breakdown reveals that 86.29% of the stolen assets—440,091 ETH, approximately $1.23 billion—have been converted into 12,836 BTC and dispersed across 9,117 wallets. Meanwhile, 7.59% of the funds have gone completely dark, and 3.54% have been successfully frozen.

Race to Recover Stolen Funds

Investigators and blockchain security experts are working tirelessly to freeze and recover the stolen assets. The complexity of tracking funds through cryptocurrency mixers remains a major challenge. Zhou emphasized the need for more blockchain “bounty hunters” and ethical hackers to combat illicit activities.

“In the past 30 days, we received 5,012 bounty reports, of which 63 were valid. We need more bounty hunters to decode mixers, as this is a significant hurdle,” Zhou stated.

Bybit has already paid out $2.2 million in bounties to 12 ethical hackers for critical information that could lead to asset recovery. The exchange continues to offer 10% of the recovered funds as a bounty to incentivize further investigations.

A Wake-Up Call for the Crypto Industry

This record-breaking hack surpasses the $600 million Poly Network breach of 2021, underscoring the vulnerabilities even among centralized exchanges with stringent security measures. Analysts warn that sophisticated social engineering tactics played a crucial role in deceiving Bybit’s security signers into approving a fraudulent transaction.

“This incident is a stark reminder that even the strongest security protocols can be bypassed through human error,” said Lucien Bourdon, an analyst at Trezor.

Also Read: OKX Halts DEX Services After EU Probe Links Platform to $1.5B Bybit Hack

As the hunt for the stolen funds continues, the Bybit hack serves as a crucial lesson for the crypto industry: No system is impervious to cyber threats, and continuous security enhancements are essential to prevent future attacks.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.