A notorious hacker has successfully laundered $1.04 billion worth of stolen cryptocurrency from the Bybit exchange in just ten days. Despite this rapid laundering, security firms believe some of these assets could still be traced and recovered utilizing blockchain tracking techniques.
The hack, which transpired on February 21, resulted in the theft of over $1.4 billion in cryptocurrencies, including liquid-staked Ether (STETH), Mantle Staked ETH (mETH), and other ERC-20 tokens. This event marks the largest crypto theft recorded to date.
Following the hack, the perpetrator transferred 500,000 stolen Ether, now valued at approximately $1.04 billion, primarily through the decentralized cross-chain protocol, THORChain, according to a report from blockchain security firm Lookonchain.
The Lazarus Group, linked to North Korea, has been identified as the primary actor behind this cyber theft, a claim supported by several blockchain analytics firms, including Arkham Intelligence.
This incident follows a series of sanctions by South Korean authorities against 15 North Koreans accused of raising funds for nuclear weapons development through cryptocurrency theft and cybercrime.
Yet, the possibility of recovery remains. Blockchain security experts express optimism that a fraction of these stolen assets may be traced and frozen, even as security challenges increase when laundering involves asset swaps and mixers.
Deddy Lavid, CEO of Cyvers, a blockchain security firm, emphasized the potential of combining on-chain intelligence and AI-driven models with collaboration from exchanges and regulatory bodies to trace and potentially freeze the stolen funds. He stressed the importance of rapid response, noting that once funds undergo significant obfuscation, recovery becomes increasingly difficult.
Bybit’s CEO, Ben Zhou, has confirmed that approximately 77% of the stolen funds remain traceable, although over $280 million have become untraceable and 3% of the funds have been frozen. Remarkably, Bybit managed to fully compensate for the $1.4 billion loss in Ether by February 24, enabling customer transactions to proceed uninterrupted.
In response to this unprecedented theft, crypto security firms like Cyvers are developing preemptive measures aimed at mitigating future attacks. Emerging technologies such as offchain transaction validation may prevent up to 99% of crypto hacks and scams by preemptively simulating and validating blockchain transactions in a controlled environment.
