FBI Urges Crypto Industry: Block $1.5B Bybit Hack Transactions Now

The FBI has issued an urgent warning to the cryptocurrency industry, calling for immediate action to block transactions linked to the recent $1.5 billion Bybit hack. The hack, attributed to the Lazarus Group, also known as TraderTraitor, has raised significant concerns about the security of digital assets and the potential for money laundering.

The FBI's public service announcement highlights the need for coordination among cryptocurrency node operators, exchanges, and private sector partners to recover the stolen funds. The hacker group, TraderTraitor, is quickly converting the stolen assets into Bitcoin and other virtual currencies, spreading them across multiple addresses on various blockchains. The FBI is concerned that these assets will be laundered and ultimately converted into fiat currency, making their recovery more complex.

According to cryptocurrency analyst EmberCN, since February 21, Bybit hackers have laundered more than 135,000 Ether (ETH), with the bulk of these being liquid-staked Ether tokens. Notably, an astonishing 363,900 Ether worth about $825 million at current prices has not moved since the hack. The hackers have already exchanged parts of the stolen Ether into Bitcoin (BTC), Dai (DAI) stablecoin, and other cryptocurrencies using decentralized exchanges (DEX), cross-chain bridges, and instant swap services that do not require KYC identification.

The FBI urges entities in the cryptocurrency industry to take decisive action to stop this laundering operation. They recommend blocking transactions pertaining to TraderTraitor, sharing relevant information with the FBI's Internet Crime Complaint Center (IC3), and employing blockchain analytics tools to track and flag wallet addresses implicated in the Bybit hack. The FBI has published a list of 51 Ethereum addresses controlled by TraderTraitor or closely associated with the group, which the industry must refrain from processing transactions involving these addresses.

The Bybit hack and subsequent money laundering attempts expose significant vulnerabilities in the crypto ecosystem. The incident reinforces the importance of strong security measures and the need for collaboration between organizations to deter and fight off crypto-related crimes. The FBI's preemptive action in seeking the cooperation of those involved in crypto is important in protecting the digital asset ecosystem and the safety of its users. However, much will depend on how well all parties cooperate in the implementation of these measures and are committed to them going forward.