The developers at cross-chain DEX Chainflip plan to deploy a protocol upgrade and enable measures to prevent Bybit hackers from using its platform.
"The broad and overwhelming consensus amongst the Chainflip ecosystem is that illicit flows endanger the protocol by exposing [liquidity providers] to too much risk and that we all would like to see the interests of normal users protected," Chainflip Labs wrote in the announcement.
Its 1.7.10 upgrade allows Chainflip Labs to reject any deposit facilitated by broker operators on its network, including SwapKit and Rango cross-chain DEX aggregator. This version introduces improved screening tools for brokers, enabling them to reject ETH and ERC20 token deposits.
Chainflip argued that "all of its participants" have voluntarily agreed to protect the protocol from exposure to Bybit attackers. It added that safeguarding the protocol from exposure to illicit flows would help build pricing and liquidity stronger over time, eventually improving its competitiveness.
At the time of the announcement, most of the code had been written for the upgrade, and testing and deployment efforts were underway. Chainflip said in the announcement that the upgrade is expected to go live in 24 to 72 hours.
"This solution should form a robust and permanent protection to LPs on the network," Chainflip said. "Going forward, Chainflip will not be useful to anyone whose wallet can be linked to any major incident, hack, fraud, or scam."
On Feb. 22, Chainflip announced that it had detected activity from the Bybit hacker attempting to swap USDC using its protocol, which led it to put its front-end swapping platform into maintenance mode, disabling swaps.
Bybit, one of the world's largest centralized exchanges, suffered a massive hack worth around $1.4 billion on Feb. 21. The exploit, the largest one in crypto history yet, drained a significant portion of the exchange's ETH reserves.
The attackers turned a standard multi-signature approval process into the $1.4 billion heist by presenting a fake UI to mask a malicious smart contract. Following the attack, several onchain analysts investigated and revealed that North Korea's state-backed hacker group Lazarus was behind the exploit.
Around three days after the hack, Bybit CEO Ben Zhou announced that the exchange closed the gap in its ETH reserves, where Lookonchain data showed that the gap was filled with funds from short-term loans, whale deposits and ETH purchases.
Meanwhile, blockchain analytics firm EmberCN said Tuesday that Bybit hackers laundered 89,500 ETH, worth about $221.5 million, in the past two and a half days. This is around 18% of the total amount of ETH stolen.
"The hacker will be able to exchange the remaining 410,000 ETH for other assets (BTC/DAI, etc.) in half a month," EmberCN said in its X post.
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