- Bybit holds 446,870 ETH via loans, deposits, and direct buys, cutting losses from the hack.
- The exchange will release a report to show asset recovery, thus building user confidence.
- Interpol and prosecutors work with Bybit to track funds and prevent illegal transfers.
Bybit, one of the world’s leading cryptocurrency exchanges, has recovered over half of the Ethereum stolen during the February 21 hack. The attack saw 439,000 ETH and liquid-staked tokens stolen, with losses exceeding $1.4 billion. Bybit CEO Ben Zhou confirmed the deficit has been fully addressed, pledging to release an audited Proof of Reserves (PoR) report using Merkle Tree technology to reassure clients of a 1:1 asset ratio.
Rapid Recovery Through Strategic Inflows
According to Lookonchain, Bybit amassed approximately 446,870 ETH, valued at $1.23 billion, from various sources. These inflows included loans, large-scale whale deposits, and direct purchases, indicating a swift financial recovery.
An address linked to over-the-counter (OTC) purchases accounted for 157,680 ETH, while Bitget contributed through a 40,000 ETH loan. Contributions from unidentified whales and institutions totaled 47,000 ETH. Other exchanges, including MEXC, added 2,400 ETH and over 20,000 ETH. Consequently, Bybit significantly reduced its shortfall, ensuring liquidity stability amid market volatility.
Bybit’s rapid recovery strategy highlights its resilience despite abrupt losses. In addition to addressing the financial gap, the exchange’s forthcoming PoR report aims to strengthen user confidence and ensure operational transparency.
Industry-Wide Call for Action Against Crypto Theft
Ben Zhou urged industry-wide cooperation to combat crypto-related crimes. He requested assistance from competing exchange eXch to block stolen funds and prevent further illicit transfers. However, tensions emerged when eXch publicly disclosed Bybit’s interception request, sparking debate over cross-platform collaboration.
eXch’s disclosure cited reputational damage claims, referencing instances where its addresses were flagged as “high risk,” leading to frozen deposits. This action raised concerns about eXch’s willingness to aid in halting hacker activities, despite the implications for industry security.
On the other hand, MistTrack’s analysis revealed that some significant portions of the stolen ETH are being funneled through eXch and getting converted as Bitcoin (BTC) and Monero (XMR). This raised questions about the effectiveness of current security protocols and the defense mechanism of exchanges against evolving crypto laundering techniques.
Related: Bybit, Phemex Hacks Linked to Lazarus Group’s Cyber Crimes
Coordinated Efforts to Prevent Further Laundering
Interpol and other global regulators are collaborating with Bybit to curb the outflow of stolen assets. Efforts focus on tracing hacker wallets and identifying conversion routes used to obscure transaction trails.
Cos(Cosine), a security researcher, highlighted eXch’s history of exposing interception requests. He emphasized the need for tighter controls on funds originating from platforms implicated in money laundering. Such incidents underscore the complexities of securing decentralized financial ecosystems.
Bybit’s rapid recovery is a critical case study in crisis management within the cryptocurrency sector. The exchange’s transparency initiative, alongside global cooperation, aims to safeguard investor interests and digital financial markets’ integrity.
