Bybit Begins Awarding Bounties for Tracing and Freezing Stolen Crypto

Cryptocurrency exchange Bybit has taken a bold step in its pursuit of justice against those responsible for a devastating hack that saw $1.4 billion stolen from the platform. In a move that promises to bring transparency and accountability to the industry, Bybit has awarded a collective bounty of $4.2 million to five bounty hunters who have helped trace and freeze funds taken by the hackers.

The total bounty, which amounts to 10% of the stolen funds, is part of Bybit's larger initiative to track down and bring to justice those involved in the hack, known as "Lazarus." The company's website, Lazarusbounty, provides a detailed account of the hack, including the sanctioned activities of Lazarus, who has been linked to multiple cryptocurrency exchanges.

"Join us on war against Lazarus," Bybit Co-Founder and CEO Ben Zhou said in a Wednesday post on X, announcing the site and referring to the hacker. "Industry first bounty site that shows aggregated full transparency on the sanctioned Lazarus money laundering activities."

According to the website, bounties will be awarded immediately when funds are confirmed as frozen, with 5% going to the entity that froze the funds and another 5% to contributors who helped trace the funds. The platform also ranks involved parties like exchangers, mixers, or bridges, dubbing them "good actors" or "bad actors" based on their response time and cooperation in either freezing the funds or providing updates on the funds' movement.

"We have assigned a team to dedicate to maintain and update this website," Zhou wrote. "We will not stop until Lazarus or bad actors in the industry is eliminated." Bybit plans to open the platform up to other victims of Lazarus as well, ensuring that those affected by the hack can also play a role in bringing the perpetrators to justice.

Bybit first revealed the hack on February 21, stating that a cyberattacker had stolen some of its holdings. The attacker was able to transfer these holdings to an unidentified address after gaining control of one of Bybit's ethereum (ETH) cold wallets during a transfer to one of its warm wallets.

However, the exchange quickly regained ground by replenishing its reserve and conducting a fresh audit. Within 72 hours of the incident, Bybit had restored its reserve to a 1:1 ratio, ensuring that it was back in a secure position.

The attack highlights the growing complexity of security challenges in the blockchain ecosystem as it continues to grow in size and scope. As PYMNTS noted, the attack is described as being likely the "largest incident ever, not just crypto."