Bybit CEO Provides Executive Summary on Hacked Funds, Emphasizes Need for Help with Mixer Transactions

The CEO of Bybit recently delivered a detailed executive summary about tracking down the hacked funds.

The amount stolen is around $1.4 billion—not much for a country but for a hacker, it’s a significant enough amount to make him keep trying to steal. The major part of the stolen asset is still visible and traceable. Somewhere around $1.4 billion or 500,000 ETH was stolen and is now recoverable in an ideal situation. But as the stolen funds are being tried to use in sophisticated methods, including cryptocurrency mixers, the staff of Bybit feels an urgent need for help.

Bounty hunters help recover stolen funds from hackers. Department A, which is in charge of recovery work, has a chief. The chief asks the questions: 1. How much was stolen? 2. From where was it stolen? And 3. Where is it now, or where is it being tried to use again?

The report outlines that the sum total of the hacked funds comes to $1.4 billion, with 88.87% of the purloined assets remaining traceable. Noted also is the fact that 7.59% of the funds have gone dark—meaning they have been moved or concealed in such a way that they cannot be traced— while 3.54% of the stolen funds have been frozen. These numbers highlight the twin victories of investigators: first, that they are able to follow the money, and second, that they have managed to reclaim some of it.

A detailed and clear breakdown of the incident reveals that a shocking 86.29% of the total hacked amount (in this case, approximately 1.23 billion USD) is now in the firm’s possession—in the form of virtual currency. And while that’s heartening news, the firm still has quite a mountain to climb. Altogether, 12,836 BTC (the most popular kind of virtual currency) have made their way to a stunning 9,117 different Bitcoin wallets. And on average, for each of those wallets, 1.41 BTC (which, again, is worth about 385 million USD) is hanging out there.

One of the most disturbing developments is the hacker’s increasing use of BTC mixers. These services obfuscate the source of the funds by mixing them with other transactions, thereby enhancing the privacy of the users. It is now virtually impossible to determine which transaction originated from which BTC address after the funds have been mixed. Wasabi, one of the most well-known privacy tools in the crypto space, was used to mix a substantial amount of BTC that had been stolen from Bitfinex.

The trend looks set to carry on, with the hacker probably using mixers even more often to hide their trail. Bybit’s executive summary says that unraveling these mixer transactions has become the main task in the investigation. The transactions’ complexity and the anonymity provided by the mixers have made it quite a lot harder for Bybit’s team and the cops to get the money back.

Bybit’s CEO stressed the urgent need for more help in tracking the transactions of the mixer, given these challenges. In the 30 days prior to November 1, 2022, Bybit logged 5,012 reports to the bounty program about the stolen funds. Of these reports, only 63 were considered valid and useful for the ongoing investigation. Though the response has been impressive, the company is still asking for more bounty hunters—experts who can assist in piecing together the complex transaction puzzle involving cryptocurrency mixers.

A key person in the probe, Ben, insisted that the team needs more sharp and able professionals who are good at analyzing and deciphering mixer transactions. He pointed out that with the increased use of mixers by the hacker, the probe is now at a critical juncture. Without more support, it could become significantly harder to track and recover the stolen assets.

The call for additional bounty hunters is a piece of a larger push to speed up the work of untangling mixer transactions and, in the end, reclaim the stolen funds. As mixers and similar privacy tools become more widespread in the world of cryptocurrency, tracing the conversations that illicit actors have with these privacy tools—and the very secretive kind of business they’re up to—becomes an even trickier task. If you’re a cryptocurrency exchange like Bybit, which has apparently started down the road of recovering stolen funds, and you really want to achieve that goal, you’re going to need more help—and very likely the kind of help that only specialized bounty hunters can provide.

The investigation into the $1.4 billion hack continues, and from it, there have been some clear takeaways about the nature of the theft and who did it. In my previous articles addressing the situation, I laid out exactly what the nature of the hack was and who was responsible for it. In this article, I am going to take a different approach and tackle this situation from a very science-based investigative angle, addressing some of the core issues associated with the theft and the obvious challenges for tracking stolen crypto once it enters the world of crypto mixers and other privacy-enhancing tools.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Follow us on Twitter @themerklehash to stay updated with the latest Crypto, NFT, AI, Cybersecurity, and Metaverse news!

The post Bybit CEO Provides Executive Summary on Hacked Funds, Emphasizes Need for Help with Mixer Transactions appeared first on The Merkle News.