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Bybit CEO Reports 88% of Stolen Funds Still Traceable Despite Obfuscation Efforts

Bybit CEO Ben Zhou recently disclosed that 88.87% of the stolen $1.4 billion worth of cryptocurrency from the exchange remains traceable, even as hackers intensify their efforts to obscure transactions using Bitcoin mixers. This update sheds light on the ongoing recovery efforts and challenges faced in tracking the stolen funds.

Current Status of Stolen Funds

According to the latest executive summary, approximately 86.29% of the stolen funds, equivalent to $1.23 billion, have been converted into 12,836 Bitcoin (BTC) and distributed across 9,117 wallets. Each wallet holds an average of 1.41 BTC. This conversion was primarily facilitated through cross-chain liquidity provider THORChain, which has faced criticism for its limited cooperation in halting the laundering activities.

The funds were originally siphoned in Ethereum (ETH) before being converted into Bitcoin. Hackers have increasingly relied on Bitcoin mixers such as Wasabi, CryptoMixer, Railgun, and TornadoCash to scramble transaction histories and make tracing more difficult.

Breakdown of Stolen Funds

The stolen funds, valued at $1.4 billion, are categorized as follows:

  • 88.87% traceable: Funds that can still be tracked.
  • 7.59% gone dark: Funds that are no longer traceable.
  • 3.54% frozen: A portion of the stolen funds successfully frozen.

Ben Zhou noted that hackers are increasingly funneling funds through peer-to-peer vendors after processing them through mixers, further complicating recovery efforts.

Efforts to Freeze and Recover Funds

As part of the recovery process, coordinated efforts have led to freezing $42.89 million worth of stolen funds within a single day. This was made possible through collaboration with various entities, including Tether, ChangeNOW, FixedFloat, Avalanche, CoinEX, Bitget, and Circle. Additionally, exchanges like Binance and Huobi have frozen accounts linked to the stolen funds based on intelligence provided by blockchain analytics firm Elliptic.

Challenges in Decoding Mixer Transactions

Despite these successes, decoding transactions processed through Bitcoin mixers remains one of the most significant challenges. Zhou emphasized that this issue is Bybit’s top priority, as it directly impacts the ability to track and recover stolen funds.

Bounty Program and Crowdsourced Efforts

To bolster recovery efforts, Bybit has launched a bounty program offering rewards to individuals who provide actionable intelligence. Those who help freeze funds in the tracked wallets will receive 5% of the frozen funds’ value as compensation. Zhou reported that out of 5,012 bounty submissions, 63 were deemed valid in the past month.

“The no.1 challenge remains decoding mixer transactions,” Zhou stated, urging the crypto community to assist in overcoming this hurdle.

Bybit has also introduced a live tracking website for the stolen funds’ wallet addresses, allowing the public to monitor progress and contribute to recovery efforts.

Final Insights

The ongoing efforts to trace and recover stolen funds underscore the complexities involved in cryptocurrency security and transaction transparency. While significant portions remain traceable, the use of mixers and other obfuscation methods highlights the evolving tactics employed by hackers in the crypto space.

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