Bybit Requests Refund from ParaSwap DAO Over Swap Fees Paid by Hacker

Cryptocurrency exchange Bybit has sparked a governance debate in the decentralized finance community by requesting a refund of over $90,000 in Ethereum swap fees paid by a hacker. The fees are tied to the recent $1.46 billion theft from the exchange.

According to a post by Ignas, a prominent DeFi analyst and ParaSwap DAO delegate, Bybit asked for the return of 44.67 ETH from the ParaSwap DAO that the hacker paid in swap fees. This decision raises questions about the DAO’s ethical and legal responsibilities, and whether it sets a precedent for the wider DeFi ecosystem.

This decision has ethical and legal responsibilities against the DAO and sets a precedent for the wider DeFi ecosystem (notably Thorswap).

Setting a Precedent in DeFi

Ignas notes that Bybit is a major player in the space, and returning the funds could help avoid “legal headaches.” However, he also raises concerns that returning the funds could set a precedent, citing the principle “code is law.” The DAO earned the fees legitimately via smart contracts, and returning them could create uncertainty for future cases.

Ignas suggests a middle ground, where the DAO returns most of the fund “minus 10% Bybit official bounty.” This approach acknowledges the DAO’s legitimate earnings while also addressing Bybit’s concerns.

Background on the Bybit Hack

Bybit’s CEO, Ben Zhou, recently revealed that nearly 20% of the stolen funds are now untraceable, just less than two weeks after the exchange lost over $1.4 billion in a highly sophisticated attack by North Korea-backed hackers.

Tips for DeFi users:

• Understand the risks of DeFi transactions and the importance of smart contract security.
• Stay informed about DeFi governance and regulatory developments.
• Diversify your portfolio to minimize exposure to potential losses.

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