TL;DR
- Chainflip upgrade to block hackers: The 1.7.10 upgrade introduces broker-level screening tools to prevent laundering stolen funds.
- Community consensus: Broad support for the upgrade to protect liquidity providers from high-risk deposits.
- Immediate actions & future plans: Maintenance mode to prevent hackers from swapping stolen ETH, with ongoing development to enhance user protection.
Chainflip, a cross-chain automated market maker (AMM), has announced an upcoming upgrade aimed at preventing hackers from using its platform to launder stolen funds. This move comes in response to the recent $1.4 billion hack on Bybit, which saw the North Korea-backed Lazarus Group looting over 400,000 ETH from the exchange’s cold wallet.
— CHAINFLIP LABS (@Chainflip) February 24, 2025
The Upgrade
The 1.7.10 upgrade, set to be ready for testing and deployment within 24-72 hours, will introduce enhanced broker-level screening tools. These tools will allow broker operators to reject high-risk deposits of Bitcoin (BTC), Ethereum (ETH), and all ERC-20 tokens.
The upgrade aims to block illicit transactions and protect liquidity providers (LPs) from exposure to stolen funds. Chainflip’s decision to deploy this upgrade stems from the overall desire to protect the interests of ordinary users and ensure a more secure environment for DeFi participants.
Community Consensus
According to Chainflip, there has been a broad and overwhelming consensus across its community for the upgrade. The community sees illicit flows as a significant risk that endangers the protocol by exposing LPs to too much risk.
The decision to move forward with the upgrade was made after discussions among the team, community members, liquidity providers, and major interfaces using Chainflip.
Immediate Actions
On February 22, Chainflip put its main interface swaps platform into maintenance mode to prevent the Bybit hackers from swapping stolen ETH for USDC. This proactive measure was taken to cut off access to the main interface after flows from the Bybit hack were detected.
Chainflip has also collaborated with ecosystem partners and other providers to prevent these funds and other illicit flows from touching the protocol.
Future Plans
Chainflip plans to continue developing features aimed at bolstering user protection and making it increasingly difficult for bad actors to exploit vulnerabilities in the crypto space.
The protocol’s commitment to self-regulation and proactive measures highlights its dedication to maintaining a secure and reliable environment for its users. The upcoming 1.7.10 upgrade by Chainflip represents a significant step towards enhancing security and protecting users from illicit activities.
