Bybit sparks debates as it seeks nearly $100k in refund from ParaSwap DAO tied to hacker’s swap fees

Bybit has requested a refund from ParaSwap DAO for swap fees paid by a hacker, sparking a governance debate over ethical responsibility.

Cryptocurrency exchange Bybit wants ParaSwap DAO to return over $90,000 in Ethereum (ETH) in swap fees tied to the $1.46 billion theft, sparking debate in the decentralized finance community over a move that could set a legal precedent.

In an X post on March 4, prominent defi analyst Ignas, who’s also a Paraswap DAO delegate, said that the exchange asked to return 44.67 ETH from the ParaSwap DAO “that Bybit hacker paid in swap fees.”

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

Ignas

The analyst notes that Bybit is a major player in the space, adding that returning the funds could help avoid “legal headaches.” However, there’s still a catch, as returning the funds could set a precedent.

“Code is law. The DAO earned the fees legitimately via smart contracts. And if funds are returned now, what about future cases? Sets a dangerous precedent. And at the end of the day, Bybit’s poor security (I know Safe UI was compromised, but still) led to the hack.”

Ignas

The analyst suggest a middle ground, leaning towards returning most of the fund “minus 10% Bybit official bounty.”

Bybit’s CEO Ben Zhou earlier 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.