Bybit Demands DAO Return Hacker's Fees, Sparking DeFi Debate

Cryptocurrency exchange Bybit has sparked a contentious debate within the decentralized finance (DeFi) community after formally requesting that ParaSwap DAO return fees earned from swaps conducted by the Lazarus hacker. The exchange is seeking the return of 44.67 ETH, approximately $114,000, in transaction fees collected during the February hack.

Bybit's proposal has raised ethical and legal concerns, with some arguing that the DAO earned the fees legitimately through smart contracts. Prominent DeFi analyst Ignas, who is also a ParaSwap DAO delegate, expressed reservations about returning the funds, noting that it could set a dangerous precedent for the wider DeFi ecosystem. However, Ignas suggested a middle ground, leaning towards returning most of the funds minus a 10% official bounty.

Bybit CEO Ben Zhou has confirmed 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. The Lazarus Group has already laundered all the unfrozen funds it stole from the recent Bybit hack, using THORChain's DEX to convert ETH tokens.

The non-KYC exchange eXch is facing scrutiny over allegations of laundering funds stolen in the $1.4 billion Bybit hack, reportedly linked to North Korea's Lazarus Group. Meanwhile, Ethereum's price has been testing the critical $2000 support level amid deteriorating technical indicators, with a Genesis Trading whale selling 40,000 ETH worth nearly $90 million.