Bybit Hackers Laundered $113 Million in 24 Hours
The hackers have another 363,900 ETH (~$900 million) stored at their address.
If they continue at the same rate, the remaining assets will be withdrawn within 8-10 days.
The total amount laundered has reached 135,000 ETH (~$335 million).
Beosin researchers reported that the Bybit hacker started using Maya Protocol to transfer stolen assets.
Bybit CEO Ben Zhou announced the launch of a website to track the activities of North Korean hacker group Lazarus Group, which Arkham Intelligence experts linked to the platform hack. He called the initiative a “bounty hunt.”
The resource collects information about laundering schemes, and also offers mechanisms to combat attackers.
Users can connect their wallets and join the search for illegal funds. If assets are successfully blocked, the reward is paid automatically.
“Freezers” receive 5% of each bounty. The platform also provides ratings of bona fide participants in the crypto industry.
In the future, it is planned to add tools for regulators and balance tracking on “live” Lazarus wallets. The platform promises not to stop until the actions of hackers and their partners are not completely stopped.
What Caused The Bybit Hack - The Largest In History?
“Incorrect EVM design” was the cause of the Bybit hack. This is the conclusion reached by Blockstream co-founder and cypherpunk Adam Back.
According to the exchange's official statement, the incident occurred when transferring ETH from cold multisig storage to a hot wallet.
Attackers tampered with the transaction signing interface so that all participants in the procedure saw the correct address. At the same time, the logic of the smart contract was changed and the hackers gained control of the Ethereum wallet.
“EVM can drop to zero and nobody cares. The problem is that the Ethereum Virtual Machine hurts trust in the ecosystem, which unfairly reflects on bitcoin,” the expert pointed out.
Back called the EVM “complex, fragile and insecure.”
“They've been losing billions a year for several years in a row [...]. It's been zero days since the nine-figure loss on ETH,” he complained.
According to Back, the Bybit incident has nothing to do with the security of hardware wallets, but is due to the difficulty of EVMs in correctly verifying a transaction.
Unlike the second most capitalized cryptocurrency, bitcoin's ecosystem is devoid of such vulnerabilities, he added.
“The whole point of HWW [hardware wallets] is to verify on the device screen how much you're paying and to what address. That doesn't work with ETH because of the complexity of the EVM and the size of the state. Therein lies the problem. ETH on HWW didn't even display addresses for Bybit,” the Blockstream co-founder explained.
In an interview with Cointelegraph, Hacken CEO Dima Budorin questioned Beck's validity. In his opinion, the challenge is presented by the vulnerabilities and complexities of using multi-sig wallets, which is common in all ecosystems, including bitcoin.
“Even similar systems in digital gold, while simple, remain susceptible to risks like human error, phishing or advanced attacks focusing on signatories' devices and workflows,” he explained.
Global Ledger co-founder Lex Fisun supported Budorin.
The specialist stated that only one ETH address was hacked in the Bybit incident. He suggested that this was possible because of “operational security weaknesses around cold wallet transfers rather than a fundamental flaw in the EVM.”
“The exploit may have originated in the virtual machine, but we cannot confirm this at this time,” he pointed out.
Bybit declined to comment on whether they believe EVMs played a role in the security breach.
Recall, Arkham Intelligence experts linked the incident to the North Korean Lazarus Group.
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Legal Tech Startup Investment Is Riding High, Thanks To AI Boost
Legal services represents an enormous industry, and one that’s well-known for repetitive and tedious work. Thus, it regularly ranks among the professions most likely to incorporate more automation.
In an oft-cited Goldman Sachs report, analysts estimated that an astounding 44% of legal work could eventually be automated. AI-enabled software will be taking on much of this workload.
Startup investors are backing this notion with their checkbooks. In recent quarters, funding to companies in the legal and legal tech sectors has surged to levels comparable to what we saw during the 2021 market peak.
To illustrate, we charted annual legal-related startup investment for the past six-plus years below.
Quarterly funding has more ups and downs, but has also mostly held strong, as charted below.
It’s an AI thing
Not surprisingly, the overwhelming majority of recent funding for the legal tech sector has gone to companies that are incorporating artificial intelligence in their offerings.
Per Crunchbase data, an estimated 79% percent of all legal-related startup investment since 2024, or nearly $2.2 billion, has gone to companies that also fit in our AI categories. That includes the two biggest fundraisers: Clio and Harvey.
Vancouver-based Clio, a legal tools platform, is by far the largest recent funding recipient in the space. It locked up a $900 million Series F last summer at a $3 billion valuation, with New Enterprise Associates as lead investor.
Clio’s software lets law firms automate processes such as client intake, accounting and document management. Its generative AI offering, Clio Duo, also helps lawyers complete routine tasks more efficiently.
San Francisco-based Harvey landed its $300 million Series D just this month. Led by Sequoia Capital, the financing sets a $3 billion valuation for the 3-year-old company, which offers an AI platform for legal and professional services.
Other large, recent rounds went to:
- EvenUp, a San Francisco-based provider of cloud and AI-based legal case management tools, secured $135 million in an October Series D led by Bain Capital Ventures.
- Luminance, a U.K. company offering an AI-enabled platform for legal contracts, closed on $75 million in a Series C this month led by Point72 Ventures.
- Justpoint, a New York-based startup, raised $45 million this month for its business model of employing AI to search for drugs that cause harm and could be the basis for lawsuits.
Saving time
Probably the most commonly touted use case for AI-enabled legal tech tools is that they allow practitioners to save time.
According to an analysis from Thomson Reuters, within a year AI could free up an additional four hours of work per week for white-collar professionals in law and other fields. Within five years, that could grow to a whopping 12 hours per week.
For now, the effect of new tools on legal employment remains to be seen. On the one hand, firms and in-house legal counsel departments may find they don’t need so many people. On the other hand, lawyers could find they are able to work more productively, serve more clients and increase incomes in the process.
Given that so many innovative startups at the intersection of AI and legal tech are in the early stages of scaling, we’ll just have to wait and see how it all plays out.
Related Crunchbase Pro list:
Related reading:
- 4 Areas Where Seed Funding Is Strong, From AI Assistants To Carbon Capturers
- Legal Tech Startup Clio Raises Whopping $900M At $3B Valuation
Illustration: Dom Guzman
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