Bybit takes the offensive against Lazarus in $1.4b saga

Dubai-based Bybit reinforced its stance against the Lazarus Group with a new bounty program for protocols and an upfront fee for anyone who helps recover the stolen funds.

Bybit CEO Ben Zhou announced that the cryptocurrency exchange is offering a 5% bounty to other platforms, cryptocurrency mixers, or individuals who assist in freezing assets stolen last week.

The first iteration of lazarusbounty.com allows anyone to sign in as a bounty hunter using a cryptocurrency wallet. It also features a live ranking of good and bad actors, with their response times recorded publicly. 

“You don’t want to end up on the bad actor list. It’s a record of you helping to facilitate sanctioned transactions,” Zhou said.

Bybit lost over 400,000 Ether (ETH) worth nearly $1.5 billion last Friday in what may be the largest financial exploit in history. The attack stemmed from a hijacked multi-signature transaction, and blockchain investigator ZachXBT identified North Korea’s Lazarus Group as the perpetrator.

Blockchain analytics firm Elliptic noted that Lazarus had initiated phase two of its laundering process, scattering illicit gains across multiple wallets and bridging assets to other blockchains like bitcoin.

The cybercriminal organization also uses non-KYC services like eXch to anonymize transactions. eXch denied allegations that Lazarus was laundering stolen Bybit assets through its platform. However, ZachXBT continued investigating the protocol, highlighting questionable practices by the service.

While Bybit deployed various recovery tactics, the exchange has already covered the losses through loans and strategic partnerships. Withdrawal processing times have returned to normal despite congestion following the attack.

So far, Bybit has recovered $43 million, with assistance from Mantle, mETH developers, and SEAL 911, a coalition of white-hat security professionals. Tether also helped freeze $181,000 in stolen funds in its stablecoin USDT (USDT).