The computer pirates who managed to run with $ 1.4 billion in Ethereum stolen from the Bybit Exchange have already converted most funds into Bitcoin. That is according to experts in several blockchain monitoring companies that have been tracking the funds.
The February 21 attack to Bybit, considered one of the greatest robberies in history, has been attributed to the Lázaro Group of North Korea, which has made cryptocurrency theft one of its specialties in recent years while the isolated nation seeks money to finance its nuclear program.
It is believed that Lázaro presented a smart contract to Bybit for a transfer of routine funds, but hidden within the contract was a malicious code that took control of the cold wallet of the exchange, which allowed him to divert the funds. None of the employees who act as the final defense line managed to avoid the attack, and all the necessary parts signed the transaction. It is possible that there is a certain amount of social engineering involved or carelessness by employees, but demonstrates how humans in the circuit have great vulnerability.
Bybit, meanwhile, managed to raise money from external investors to connect the hole, and says that you can comply with all withdrawals. However, after FTX collapse, that promise should not be too reassuring. The funds housed in encryption exchanges, of course, are not insured by the government, so if a client loses his money due to robbery, there is no guarantee that he can recover.
According to elliptical blockchain monitoring companies and TRM laboratories, approximately 400,000 stolen Ethereum tokens were divided between dozens of wallets, and most coins have now become Bitcoin.
Many cryptocurrency exchanges implement some levels of controls of their clients with knowledge that would presumably catch Lázaro trying to wash stolen funds (although not always, Binance settled with the United States government for turning a blind eye to the bad actors). But, unfortunately, computer pirates took advantage of a service called Thorswap that allows users to exchange assets in different blockchains without an intermediary, allowing Ethereum conversion to Bitcoin. Then they used mixers to hide the destination of Bitcoin. Encryption mixers are services designed to obscure the origin and fate of the cryptocurrency of a person by mixing it with the funds of other users before returning it. To really convert the bitcoin into hard cash, it is believed that North Korea was based on illicit exchanges in China willing to look the other way.
Techcrunch It has a history About how the process was reduced. Here is a comment they received from Ari Redbord, head of policy of the Blockchain TRM Labs monitoring firm:
“This rapid washing suggests that North Korea has expanded its money laundering infrastructure or that underground financial networks, particularly in China, have improved their ability to absorb and process illicit funds,” said Redbord. “The scale and speed of this operation have new challenges for researchers, since traditional money laundering mechanisms (AML) struggle to maintain the rhythm of the high volume of illicit transactions.”
Cryptographic mixers and their developers have been the subject of governments for some time, for obvious reasons. As privacy is a central cryptography, many defenders argue that cryptographic mixers should be legal because they are only a tool that helps people maintain their privacy as they perform online transactions. But as Blockchain’s analysis has matured and has become central to criminal investigations, it was a matter of time before mixers came out under scrutiny by making it difficult to track illicit funds.
North Korea has directed the cryptocurrency because the traditional banking system makes it almost impossible to divert such large money, since any large transaction would face the government’s requirements to identify customers and make sure everything is on the rise. Crypto remains largely not regulated, favored in scam operations worldwide, as romantic operations of “pork butcher shop” in Myanmar. The traditional banking system is slow and outdated, but it has its benefits.
According to the Trump administration, it seems that cryptography is about to become even more a savage west, since dozens of current demands against companies in the industry have been withdrawn in rapid succession.
President Trump also announced plans to create a “strategic reserve” of coketers, including Cardano and Solana, despite the fact that many in the industry think it is a bad idea because it would essentially see that the government has a significant influence and a financial participation in the industry. Crypto has not yet fulfilled any of his promises or is economically productive in a significant way (although Stablingins show some promise as a true digital currency). Wealthy interests possibly promoted President Trump to the Oval office so that at least they could pump their bags, at least. And the American people will pay it in the form of tariffs.