Elliptic: Stolen Bybit Funds May Be Laundered Through Bitcoin Mixers
Blockchain intelligence firm Elliptic has warned that North Korean actors are starting to launder stolen Bybit funds, with at least 10% of the $1.46 billion being processed through anonymous exchange services. In total, over $140 million has been detected in early transactions aimed at obscuring the cryptocurrency’s trail.
Bybit Funds Moved Through Anonymous Exchanges
Elliptic has been tracking the flow of funds and says the stolen funds are being systematically moved through anonymous exchanges. The funds are then converted into Bitcoin, a method that obscures the trail and makes it harder to track and recover the assets. In a blog post on Saturday, Elliptic said:
“The second step in the money laundering process is to ‘layer’ the stolen funds, in an attempt to hide the transaction trail. While it is possible to track these transactions, such layering tactics can complicate the tracking process, creating a significant challenge in preventing criminals from cashing out stolen assets.”
The Biggest Social Hack in Crypto History
The $1.46 billion Bybit heist, which occurred on Friday, primarily targeted Ethereum and is considered the largest heist in crypto history. The scale of the incident surpassed the 2021 Poly Network hack, in which over $611 million was stolen.
Anonymous exchange services, especially Bitcoin mixers, are becoming popular tools for criminal organizations to hide the origin of their assets. Elliptic said this process extends the time it takes attackers to withdraw funds, but also complicates the investigation process.
The Big Challenge of Preventing Money Laundering
Tracing and recovering stolen assets from cyberattacks in the cryptocurrency industry is a major challenge for law enforcement. Increasingly sophisticated money laundering tactics, such as the use of cryptocurrency mixing services, make the investigation and recovery process more difficult.
Elliptic stressed that while transactions are layered to cover their tracks, investigators can still follow the trail if they have the right tools and enough time. However, these tactics add complexity and make it take longer to recover assets before they are cashed out.
Conclusion
The largest cryptocurrency theft in history at Bybit not only caused huge financial losses, but also posed new challenges in preventing sophisticated money laundering activities. With the rise of cryptocurrency mixing services, law enforcement agencies and companies like Elliptic need to continue to develop technology to combat these sophisticated money laundering techniques, while also working to recover stolen assets.