TL;DR
- Bybit replenishes the $1.4 billion Ethereum loss through OTC purchases and loans from major platforms like Binance and Bitget, ensuring reserves are once again backed 1:1 for its customers.
- The platform launches a $140 million bounty program, offering up to 10% of the recovered funds to ethical hackers and cybersecurity experts who help track down the stolen assets.
- Attackers use sophisticated money laundering techniques, similar to those employed by the Lazarus Group, including decentralized exchanges and ETH-to-Bitcoin conversions to obscure their trail.
Following a cyberattack that resulted in the theft of $1.4 billion in Ethereum, Bybit has successfully replenished its reserves through strategic cryptocurrency purchases in OTC markets and loans from major platforms such as Binance, Bitget, and HTX. CEO Ben Zhou announced that the company will soon release an updated proof-of-reserves (PoR) report to demonstrate that customer assets are once again backed 1:1.
Blockchain analytics firm Lookonchain confirmed that Bybit acquired 157,660 ETH worth $437.8 million from investment firms such as FalconX and Wintermute, while an additional $304 million in ETH was sourced from both centralized and decentralized exchanges. This decisive action underscores Bybit’s commitment to security and transparency, reinforcing its credibility in the crypto market.
Bybit Launches an Unprecedented Bounty Program
Beyond replenishing the lost funds, Bybit has intensified its recovery efforts by launching a bounty program worth up to $140 million. This initiative aims to attract ethical hackers and cybersecurity specialists to help trace the stolen assets and prevent attackers from cashing them out. So far, Bybit has successfully frozen approximately $43 million through collaborations with platforms like Tether, ThorChain, Bitget, Circle, and CoinEx.
Bybit’s proactive approach not only strengthens its reputation but also sets a precedent in the crypto industry, highlighting the importance of collaboration between companies and the community to maintain a secure ecosystem.
Sophisticated Attacks and the Battle Against Money Laundering
Despite these recovery efforts, the hackers have employed advanced money laundering tactics, similar to those used by the infamous Lazarus Group. According to blockchain forensics firm Elliptic, the attackers quickly converted the stolen assets into ETH via decentralized exchanges to circumvent restrictions. The funds were then distributed across more than 50 wallets and systematically moved using trading services and mixers like Tornado Cash.
On-chain investigator ZachXBT also discovered that the attackers attempted to launder funds using memecoins on the Solana blockchain. They created a fraudulent token on Pump.Fun, generating over $26 million in trading volume before the platform intervened and blocked it.
Despite the complexity of the attack, Bybit’s swift response and cooperation with other platforms have mitigated further losses. This event underscores the importance of security in the crypto industry and showcases how blockchain technology continues to evolve to combat fraud.
