Bybit Hack: Traces of the Lazarus Group and Efforts to Recover the Stolen Funds

On February 21, Bybit experienced one of the largest hacks in history, losing over $1.4 billion worth of digital assets. Blockchain intelligence firm Arkham Intelligence identified the Lazarus Group, a North Korean hacker group, as the likely perpetrators. The attackers used mixers to try and make the stolen funds untraceable. However, over 88% of the stolen funds remain traceable. Bybit CEO Ben Zhou stated that 440,091 ETH was converted into 12,836 BTC and funneled through Bitcoin mixers.

The CEO’s update came nearly a month after the attack. Lazarus Group managed to launder the stolen funds through the decentralized cross-chain protocol THORChain within 10 days. Blockchain security experts remain hopeful that some of the funds can still be frozen and recovered.

Bybit’s CEO emphasized that tracking transaction patterns is the biggest challenge due to crypto mixers, and there is a need for more “bug bounty hunters.”

“In the past 30 days, 5,012 reward reports were received, with 63 being valid. We expect more reports and need more hunters to unravel mixers, as there is still a long way to go.”

Lazarus Group Behind the Bybit Attack: $2.2 Million in Rewards Paid

Bybit has paid a total of $2.2 million in rewards to 12 “bug bounty hunters” who provided valuable information to freeze the stolen funds, via the LazarusBounty platform.

The exchange is offering 10% of the recovered funds as a reward to white-hat hackers and researchers.

Despite strong security measures, the attack on Bybit illustrates that even decentralized exchanges are vulnerable to sophisticated cyberattacks, according to analysts.

“Once again, it has been clearly reminded that all security measures can be compromised due to human error,” said Trezor analyst Lucien Bourdon.

Bourdon explained that the attackers used a sophisticated social engineering technique to approve a malicious transaction that drained funds from Bybit’s cold wallets.

The Bybit hack surpasses the August 2021 Poly Network hack, which saw $600 million stolen, making it the largest cryptocurrency exchange breach to date.

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