Chainflip Implements Emergency Upgrade to Block Bybit Hackers from Moving Stolen Funds
In response to the $1.4 billion Bybit exploit, cross-chain trading protocol Chainflip has swiftly deployed an emergency software upgrade aimed at preventing hackers from laundering stolen funds through its platform.
The upgrade, dubbed version 1.7.10, was announced on February 24 and is designed to block illicit transactions while protecting liquidity providers from exposure to compromised assets.
This move comes as part of a broader effort within the crypto industry to track and recover the stolen funds, with blockchain investigators, analytics firms, exchanges, and network protocols working together to mitigate the fallout from the February 21 breach—the largest crypto exchange hack to date.
Closing the Door on Stolen Crypto
Chainflip stated that allowing illicit funds to flow through its protocol not only presents legal and ethical concerns but also puts liquidity providers at significant risk. The company justified its decisive action, explaining, “That is why we acted quickly to cut off access to the main interface after flows from the Bybit hack were spotted on Saturday morning.”
The latest upgrade, set to go live by February 27 following internal testing and network deployment, includes enhancements to broker-level screening tools used by operators. These tools will now enable brokers to block incoming Bitcoin transactions based on risk profiling. Additionally, the feature will extend to Ethereum and all ERC-20 tokens, ensuring that any deposits linked to illicit activity are rejected and returned to the sender’s specified refund address.
Strengthening Crypto’s Defense Against Crime
Chainflip’s proactive stance aligns with the broader industry’s efforts to curb criminal activity within the crypto space. The protocol also collaborated with Chainlink and its providers to ensure that Bybit’s stolen funds cannot be laundered through decentralized cross-chain services.
Moreover, Chainflip has committed to introducing additional security measures as needed to enhance user protection. Moving forward, any crypto wallets associated with the Bybit hack or other major security breaches will be blocked from utilizing its services.
A Firm Stand Against Crypto Criminals
Reaffirming its commitment to ethical trading, Chainflip emphasized that the crypto community doesn’t need regulatory intervention to act in such situations. The company stated, “We do not need regulators to tell us what to do in this situation. There are sufficient commercial reasons for the ecosystem to take these steps, not just ethical ones.”
Ending on a firm note, Chainflip delivered a clear message to the hackers, believed to be linked to the North Korean cybercriminal group Lazarus: “Take your stolen money elsewhere—we don’t want it.”
With this upgrade, Chainflip joins a growing list of crypto platforms taking an active role in combating illicit activity, signaling a united front against cybercriminals exploiting blockchain technology.
