Defending Against Cyber Crime

Community Investigation

Bybit Hack Analysis: North Korean Hackers Strike Again in One of the Largest Crypto HeistsIn February 2025, Bybit, one of the world’s leading cryptocurrency exchanges, suffered a major security breach, resulting in the loss of approximately $70 million worth of digital assets. According to cybersecurity firms and blockchain analytics companies, the attack was carried out by a North Korean state-sponsored hacking group, likely Lazarus Group, which has been responsible for several high-profile cryptocurrency heists in recent years.This incident underscores the growing sophistication of cybercriminals targeting the cryptocurrency industry and highlights the urgent need for stronger security measures across exchanges. In this report, we will break down the attack, analyze the techniques used by the hackers, and discuss how exchanges can enhance their security to prevent similar breaches in the future.------------------------------------------------------------------------------------1. Overview of the Bybit Hack and Its ImpactThe Bybit hack occurred in early February 2025, with the attackers managing to steal a substantial amount of digital assets from the platform’s hot wallets.Estimated Loss: Approximately $70 million in various cryptocurrencies.Attack Attribution: Security experts at TRM Labs and Chainalysis have linked the attack to North Korean hacking groups.Response from Bybit: The exchange suspended withdrawals, launched an internal investigation, and implemented emergency security measures.Market Reaction: The incident raised concerns among investors, leading to a temporary decline in crypto market confidence.This breach follows a pattern of state-sponsored cyberattacks targeting cryptocurrency platforms, with stolen funds often used to fund North Korea’s nuclear weapons program.------------------------------------------------------------------------------------2. How Did the Attack Happen? Analysis of Hacker TechniquesAccording to cybersecurity reports, the Bybit hack was executed using a combination of social engineering, smart contract vulnerabilities, and blockchain laundering techniques.(1) Spear Phishing & Insider ManipulationHackers likely used sophisticated phishing campaigns to trick Bybit employees or third-party service providers into revealing sensitive credentials.Fake job offers, malicious email attachments, and compromised cloud storage links may have been used to plant malware on Bybit’s internal systems.Targeting insiders is a common strategy of North Korean hackers, allowing them to bypass multi-layered security systems.(2) Exploiting Hot Wallet VulnerabilitiesMany cryptocurrency exchanges store a portion of user funds in hot wallets to facilitate instant withdrawals. However, these wallets are more vulnerable to cyberattacks.The hackers likely exploited a weakness in Bybit’s wallet security system, gaining unauthorized access to move funds out of the exchange.Smart contract exploits or API vulnerabilities may have also been leveraged to manipulate transactions.(3) Using Blockchain Mixing Services to Launder Stolen FundsOnce the funds were stolen, the attackers immediately split them into thousands of smaller transactions, making them harder to trace.Cryptocurrency mixing services such as Tornado Cash were used to obfuscate the origin of the stolen funds.Security firm Chainalysis reported that portions of the stolen assets were converted into privacy coins like Monero, further complicating law enforcement efforts.This method mirrors previous attacks executed by Lazarus Group, which has stolen over $2 billion worth of cryptocurrency since 2017.------------------------------------------------------------------------------------3. The Growing Threat of North Korean Crypto HacksThe Bybit attack is not an isolated incident. North Korean hackers have been systematically targeting crypto exchanges, DeFi platforms, and bridge networks to fund the country’s economy.Axie Infinity’s Ronin Bridge Hack (2022): $620 million stolen.Horizon Bridge Attack (2022): $100 million stolen.Atomic Wallet Breach (2023): $35 million stolen.Mixin Network Hack (2023): $200 million stolen.According to the United Nations, North Korea has ramped up its cyber operations due to increased international sanctions, using stolen crypto to finance weapons programs, military operations, and illicit trade.The Bybit hack follows the same trend, reinforcing concerns that cryptocurrency platforms remain a prime target for state-sponsored cybercrime.------------------------------------------------------------------------------------4. How Exchanges Can Strengthen Their SecurityIn the wake of the Bybit hack, cybersecurity experts have emphasized the need for more robust security protocols to protect user funds. Here are the key measures exchanges should implement:✅ Multi-Signature Wallets for Secure TransactionsLarge transactions should require multiple approvals from different authorized personnel.This prevents a single compromised account from draining funds.✅ AI-Powered Security MonitoringAI-based anomaly detection systems can flag suspicious withdrawal patterns in real time.Blockchain analytics tools should track fund movements across different addresses to identify potential hacks early.✅ Zero-Trust Security ModelExchanges should limit employee access to sensitive systems and enforce strict authentication policies.Internal audits and penetration testing should be conducted regularly to identify vulnerabilities.✅ Decentralized Cold Wallet StorageA larger percentage of user funds should be kept in cold wallets, disconnected from the internet.Multi-layer authentication should be required for any transfer of funds from cold to hot wallets.✅ Stronger Compliance & Law Enforcement CooperationExchanges should work closely with blockchain security firms and law enforcement to recover stolen assets.Regulatory bodies must introduce stricter KYC and AML (Anti-Money Laundering) measures to prevent illicit transactions.------------------------------------------------------------------------------------5. Conclusion: A Critical Moment for Crypto SecurityThe Bybit hack serves as a harsh reminder of the vulnerabilities present in cryptocurrency exchanges. With state-sponsored cyberattacks becoming more frequent and sophisticated, the industry must prioritize proactive security measures rather than reactive damage control.Bybit is expected to enhance its security infrastructure in response to the breach, but the entire crypto ecosystem must take this attack as a warning. Without stronger defense mechanisms, AI-driven threat detection, and regulatory cooperation, similar incidents will continue to plague the industry.As the crypto space evolves, so too must its security protocols. The Bybit hack is a wake-up call—one that should not be ignored.

code2exit

2025.03.05541

Community Investigation

Bounty King: Investigation Series follows a team of skilled investigators as they navigate the dark world of cybercrime, uncovering hidden digital trails and solving complex mysteries with the power of AI and blockchain technology. Each case takes them deeper into the realm of online fraud, crypto hacks, and digital heists, where bounties fuel the relentless pursuit of truth. With every investigation, they piece together the puzzle—tracing lost assets and exposing the individuals behind the screens. It’s a journey of persistence, intelligence, and teamwork, where every clue brings them one step closer to justice in an ever-evolving digital landscape.In Ongoing Investigation 1, we identified a money laundering network on the BNB Chain by analyzing a shared wallet (0x33d057af74779925c4b2e720a820387cb89f8f65) linked to both Bybit and Phemex. We also tracked the centralized exchanges where some of the laundered funds started off.In Ongoing Investigation 2, we’ll look deeper into how these connected laundering networks move funds multiple times before making large deposits into CEXs.For on-chain analysis, the key to proving connections is accurate transaction data. The best way to do this is by tracking transactions (tx), as they clearly show how funds move between wallets.Our next step is to expand the investigation based on a key fund aggregator address found in Investigation 1: 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572.Bounty King: Bybit Security Breach – $1.4B Stolen Asset Analysis (Ongoing Investigation 1) https://community.chainbounty.io/posts/0195352f-55de-7791-aae3-9e6008c8bcb9On the BNB Chain, this address collects small amounts of BNB from different wallets and then sends them to specific target addresses. The same pattern appears on the Ethereum mainnet, so we’ll check for any unusual withdrawals from this wallet.We usually start by analyzing withdrawal addresses because the person controlling the wallet actively decides where to send the funds, which gives us clues about their intentions. In contrast, deposit addresses are more passive, making it harder to determine the owner's motives.This address has also been seen sending 0.03 ETH to multiple wallets (Figure 1) on the Ethereum network.Figure 1: Outgoing transaction patterns of the fund aggregator wallet on EthereumIf we look at the types of tokens held by the connected wallets, most of them commonly have stablecoins like DAI and USDT, along with the native coin ETH. Since stablecoins are pegged to a fixed value, they are less volatile.However, two wallets stand out because they hold different types of tokens:0x264e3ca158787b40798d1f006c0fd6558a203ded –This wallet has a history of holding tokens named Arb.0x27d680edfd1094efa01ba003113e5a6c4e202d59 – This wallet has a history of holding tokens named Polygon ecosystem.In on-chain analysis, looking at different pieces of information helps us understand the intent behind transactions. In cases like this, the presence of specific tokens in certain wallets can be an important clue. Automated wallets typically do not hold unique tokens unless they are manually operated, making these cases worth further investigation.For example, 0x264e3ca158787b40798d1f006c0fd6558a203ded received ARB through OKX and later transferred it to Gate.io.(Figure 2)Figure 2: Suspicious token transfers from CEX to CEXTransaction Details:First TransactionFrom: OKX Withdraw Wallet  (0x6cc5f688a315f3dc28a7781717a9a798a59fda7b)To: 0x264e3ca158787b40798d1f006c0fd6558a203dedDate & Time: August 6, 2024, 04:19 AM (UTC)Transaction Hash: 0xe8431526a81a2b9549acbd7ce3f377feb72467052f19ddf36968802eda76c1a3Amount: 9.168 ARBSecond TransactionFrom: 0x0ba9161b32a541bf30ac8db6842b9a6904e2d924To: Gate.io User Wallet (0x0ba9161b32a541bf30ac8db6842b9a6904e2d924)Date & Time: December 28, 2024, 12:57 PM (UTC)Transaction Hash: 0x6603d59dad51ade1feb121df40bfd8026ebc67d7147ff1490e94f33fff93650eAmount 9.168 ARBIn the previous ongoing investigation, only the withdrawal transaction from the exchange was confirmed. However, the deposit transaction has now also been identified. Therefore, it is important to work with law enforcement to verify the user details associated with these transactions.It is also confirmed that 0x27d680edfd1094efa01ba003113e5a6c4e202d59 received Polygon from Gate.io.(Figure 3)From: Gate.io Withdrawal Wallet (0x0d0707963952f2fba59dd06f2b425ace40b492fe)To: 0x27d680edfd1094efa01ba003113e5a6c4e202d59Date & Time: November 17, 2024, 07:48 AM (UTC)Transaction Hash: 0x99e537e4839c5a4285334828507ba4cdba987d2cd02a95d11094765ee31b2946Amount: 107.170 PolFigure 3: Suspicious token transfers from CEX  In this case, after passing through four steps, funds from 0x27d680edfd1094efa01ba003113e5a6c4e202d59 eventually flow into 0x33d057af74779925c4b2e720a820387cb89f8f65, which is an overlapping address(Figure 4) used by both Phemex and Bybit for ETH transactions.Within the cluster, multiple addresses are interconnected, forming links both forward and backward. Therefore, identifying relationships between wallets that follow this pattern is crucial for understanding the overall flow of funds and verifying transactions.Figure 4: Connection to 0x33d057af74779925c4b2e720a820387cb89f8f65By following this cluster flow, we can identify addresses with significant transfer in/out activity.For example, the address 0x24c367c656c9960655936bac8cf8b738a70433dc exhibits such behavior.Looking at the flow of the wallet 0x264e3ca158787b40798d1f006c0fd6558a203ded, which has a history of transferring ARB from OKX to Gate.io, we can see that after four steps, 140 ETH(Figure 5) was transferred in and out of 0x24c367c656c9960655936bac8cf8b738a70433dc.Figure 5: Large Distribution Wallet ObservationThe overlapping addresses above are also used for fund distribution in money laundering schemes. Based on this, we can infer that relay wallets exist within approximately four steps between the aggregator and the distribution phase.Now, let's analyze 0x264e3ca158787b40798d1f006c0fd6558a203ded further to identify additional patterns.Looking at the in/out transaction history of 0x264e3ca158787b40798d1f006c0fd6558a203ded, we can see that the address 0x9ff1b430a699ee6215b315ea8f7892520e14b9cd transferred 140 ETH.(Figure 6) This address shows significant incoming transactions from multiple wallets.A key observation here is that the 140 ETH was bridged via Debridge, which utilizes OKX’s cross-chain DEX. (Figure 6)Figure 6: Distribution Wallet AnalysisBy examining 0x9ff1b430a699ee6215b315ea8f7892520e14b9cd as the source of these funds, we can clearly (Figure 7) see a connection.From 0x9ff1b430a699ee6215b315ea8f7892520e14b9cd, a total of 1,141 ETH was split and distributed across eight different addresses. These funds were then swapped cross-chain through Debridge.In fact, using Debridge for money laundering is a well-known pattern commonly used by groups like Lazarus and other laundering operations.The following visualization illustrates how large-scale fund distributions are processed.Figure 7: Large Distribution Wallet operationLet’s highlight an important point here.Looking at the source of wallet 0x9ff1b430a699ee6215b315ea8f7892520e14b9cd, which distributes funds through eight wallets via Debridge, we can see multiple records of deposits from CEXs (Figure 8). This is crucial to understand because money laundering networks do not rely solely on DEXs; they often move funds through multiple CEXs as well.Therefore, the process involves a combination of swaps, cross-chain transfers, and CEX transactions to obscure the fund trail.By following this report, we can observe how CEXs ultimately serve as the final gateway for money laundering.Figure 8: Illicit Sources from CEXsFor example, laundered funds from Huobi (HTX) are further distributed across multiple wallets before ultimately reaching the pre-Debridge distribution wallets. This process illustrates how funds are layered and moved to obscure their origins.(Figure 9)Figure 9: Complex Source from CEXsBelow is the detailed information on 1,140 ETH being sent to Debridge through nine transactions across eight addresses.This data can be analyzed further using the Debridge Explorer to track how the assets are converted into different cryptocurrencies.Transaction Summary (Debridge Identified) 1) Transaction Hash: 0x85ae303e13c17c16336cfe7f23f812f074414566d522652a4bb91d8a820077acFrom: 0xd9274cda8346d25a7e344079594d8e1a1a4d3a02To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 21:27:47Token: ETHAmount: 159.984891 2) Transaction Hash: 0x5cf2b00098898c1af5ce7ce240908102edde611906d2eae967e4ddeed75402a9From: 0x24c367c656c9960655936bac8cf8b738a70433dcTo (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 18:54:35Token: ETHAmount: 139.981718 3) Transaction Hash: 0x7930109426d980a9de4a29309103d4cde3ddc3ab28a3f259ff69a574b8524976From: 0xa7fce5ed6006626bb07749245a9854296a60e2d1To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 17:36:35Token: ETHAmount: 137.969672 4) Transaction Hash: 0x6b9434bf9faaf0b7552e002ac687a0e2e596960188a4c1d8c06d1fb980205ec1From: 0xcbc18f2c0371a03b25b1ec596b497d1f5a7b54e8To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 22:22:23Token: ETHAmount: 76.985214 5) Transaction Hash: 0x8f98c88f6b4b72c257fbc947250921fd82b94739fa422be24bee497378b03d53From: 0xbe7a5460d177ca8c89839ba3f900e3b61e4d4d89To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-10 12:23:59Token: ETHAmount: 5.902455 6) Transaction Hash: 0xe225eed10a1dc3b2b06b510c06d7bacd2f69b1043a3b9c8e98d704dc1bf5df06From: 0xbe7a5460d177ca8c89839ba3f900e3b61e4d4d89To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-10 12:23:11Token: ETHAmount: 159.905085 7) Transaction Hash: 0xf2a9fa7022e97b6178f36f0ba1d978e2aabd53154d99feef560c3113596c17d9From: 0x74851cba5b37cb085b75a16c778a1f74c6b27d3fTo (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 19:23:59Token: ETHAmount: 139.985168 8) Transaction Hash: 0x52d77d0d4a9ec43e6abf23628cd0eadb7c67687530d5030e0da91a43c06f4553From: 0x81ceaa93e6c7021276f92da90a62f1cbed802d44To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 20:48:11Token: ETHAmount: 160 9) Transaction Hash: 0x634af7279d816d98b6c57311ea7e695cea129f46bb1e92db05357087a3c0dacdFrom: 0x0bd2d8e6f19fe540cb69a6c72ee3e942218c1f86To (Debridge): 0x663dc15d3c1ac63ff12e45ab68fea3f0a883c251Transaction Time (UTC): 2025-02-06 19:56:59Token: ETHAmount: 159.985086For example, a transaction sending 159.984891 ETH in TX 0x85ae303e13c17c16336cfe7f23f812f074414566d522652a4bb91d8a820077ac goes through two conversions:159.98 ETH → 429,120 USDC (Solana) → 429,120 USDC (BSC). (Figure 10)Figure 10: Cross-chain swap from ETH to Solana and BSCSource: https://app.debridge.finance/orders?s=52ptwAmkmMsg7PaQiCexjbJmkEYtA3VZXebTjtrgBoAUAfter that, 428,772 USDC is sent from BSC back to deBridge. (Figure 11)Figure 11: Cross-chain swap from BSC by DebridgeSource: https://bscscan.com/address/0x55788125568c5b22d14c020914b86d9acf753272#tokentxnsAfter that, 428,772 USDC is sent from BSC to Solana, where it arrives at 428,520 USDC. Figure 12: Cross-chain swap from BSC to SolanaSource: https://app.debridge.finance/orders?s=0x55788125568c5B22D14C020914b86d9acf753272This transaction undergoes a total of three cross-chain swaps:ETH → Solana → BSC → SolanaThe final destination wallet is as follows:The 428K USDC was ultimately deposited into a private wallet:8rduN4bx1UuYZk1UAhQ31Wt5sKDPTKcPQQc3PJApDNwgThis wallet presents two interesting points:There is a history of deposits and withdrawals involving approximately 428K USDC from a wallet that the community refers to as Wintermute. (Figure 13)However, we cannot definitively confirm that this wallet belongs to Wintermute, a globally recognized market maker and OTC trading firm.Figure 13: Final Wallet on SolanaSource: https://intel.arkm.com/explorer/address/8rduN4bx1UuYZk1UAhQ31Wt5sKDPTKcPQQc3PJApDNwgIf multiple sources, including the community and Arkham Intelligence, label the wallet as Wintermute, this becomes particularly noteworthy.If the owner of this wallet was involved in money laundering, they likely completed KYC verification at some point.Wintermute, if indeed associated with the wallet, would have access to relevant KYC information.Next Steps for Law EnforcementTo establish the facts, law enforcement should consider reaching out to Wintermute for verification. If the wallet is indeed tied to them, they may hold crucial KYC data that could assist in further investigation. By tracing the nine initial ETH transactions sent to deBridge, we can observe that all funds eventually consolidate into a single exchange wallet.Destination Exchange WalletOKX Deposit Wallet: HK7RDBzzBfhSr8DWxgLtwKA62zAzf3iUtsVsw54tAv5fThis wallet started receiving funds on February 4, approximately three weeks ago.It has a total deposit history of 3.37M USDC.This indicates that the source funds were aggregated and transferred to OKX(Figure 14), making it a key point of interest for further investigation.Figure 14: OKX User WalletSource: https://explorer.bitquery.io/solana/address/HK7RDBzzBfhSr8DWxgLtwKA62zAzf3iUtsVsw54tAv5f?from=2024-02-01&till=2025-02-25This OKX deposit wallet has been actively receiving funds since February 4, 2025, accumulating a total deposit of 3.37M USDC. This wallet serves as the final destination for the traced transactions, consolidating funds from multiple cross-chain transfers.Based on multiple findings, we analyzed Large Distribution Wallets using fund aggregator addresses linked to money laundering clusters previously identified on Phemex and Bybit.Conclusion & Next Steps for Law Enforcement and Exchanges1. Large-Scale Money Laundering Activity ConfirmedThe investigation has identified a clear pattern of cross-chain money laundering, where stolen funds were transferred through three separate cross-chain swaps before being deposited into a specific OKX wallet. This structured movement of funds suggests the involvement of an organized laundering network designed to obscure the origins of stolen assets.2. Suspicious Transactions Involving a Wallet Labeled as "Wintermute"One of the laundering wallets has transaction records linking it to a wallet that Arkham Intelligence and the community have labeled as "Wintermute." However, we cannot confirm with certainty that this wallet actually belongs to Wintermute, which is a global market maker and OTC firm. If this wallet is indeed linked to Wintermute, this could be a key point of investigation, as companies like Wintermute are required to follow strict KYC and compliance regulations. Unlike anonymous or fake KYC accounts on exchanges, firms like Wintermute typically collect verified identity data on their clients. If law enforcement confirms this connection, Wintermute could possess important identity records related to the individuals involved in these transactions. There is a high chance this wallet has been mislabelled as open-source information identifying the wallet with Wintermute has never once cited any evidence.3. 3.37M USDC Deposited into an OKX Wallet from a Laundering NetworkA wallet on OKX has received 3.37 million USDC since February 4, 2025, with transactions that strongly match known laundering methods. Given the timing and pattern of transfers, this wallet is highly likely connected to the Phemex hack.Analyzing other wallets with similar transaction behaviors on OKX and other exchanges could reveal additional laundering accounts and transactions.We will continue to work on the investigation and will share further information.

BountyKing

2025.02.251830

Community Investigation

Bounty King: Investigation Series follows a team of skilled investigators as they navigate the dark world of cybercrime, uncovering hidden digital trails and solving complex mysteries with the power of AI and blockchain technology. Each case takes them deeper into the realm of online fraud, crypto hacks, and digital heists, where bounties fuel the relentless pursuit of truth. With every investigation, they piece together the puzzle—tracing lost assets and exposing the individuals behind the screens. It’s a journey of persistence, intelligence, and teamwork, where every clue brings them one step closer to justice in an ever-evolving digital landscape.The Bybit hacker is currently laundering funds through platforms like Exch exchange, Chainflip, and Thorchain, converting assets into BTC, ETH, and TRON USDT.Since many teams worldwide are already tracking the money laundering process and sharing similar information, we will focus on profiling rather than laundering activities.According to on-chain investigator ZachXBT, one address, 0x33d057af74779925c4b2e720a820387cb89f8f65, has been linked to transactions from a previous hacking incident involving Phemex, which was connected to the Lazarus Group.We will dig deeper into this connection.Source:https://x.com/zachxbt/status/1893211577836302365We have verified this information and found it to be credible.The reason is that while many new addresses are being used for money laundering, this particular address is not new. Its first transaction dates back to November 2024.Looking at its deposit and withdrawal patterns, it appears to be an automated address within a money laundering cluster. This suggests that some of the laundered funds have overlapped with addresses previously used for laundering.Based on this, we assume that this wallet is part of an automated money laundering cluster. We are now analyzing patterns of other wallets linked to this address.During this analysis, we discovered something unusual.We found that 0x33d057af74779925c4b2e720a820387cb89f8f65 exists on the BSC (Binance Smart Chain) and decided to trace the movement of BNB backward.By doing so, we were able to track the reverse flow(Figure 1) as follows:0x33d057af74779925c4b2e720a820387cb89f8f65 → 0x9d636e330abef7a34fbb079580e6c3d20b4dd3cc → 0x543568d6c7b41537eb0bb9ed455e77949f0892aeFigure 1: Reverse TrackingWe observed the following transactions:0x543568d6c7b41537eb0bb9ed455e77949f0892ae → 0x9d636e330abef7a34fbb079580e6c3d20b4dd3cc0.72 BNB sent on 2025-02-19 at 04:50 AM (UTC)TX: 0x60701fdd9a31edde197316df50068b002472e430d7b412e495a71f94c14016610x9d636e330abef7a34fbb079580e6c3d20b4dd3cc → 0x33d057af74779925c4b2e720a820387cb89f8f650.72 BNB sent on 2025-02-19 at 08:55 AM (UTC)TX: 0xaf1fd305f297b1b723835c1800d5cff351ee0210a0ddd16236f6ef0d0f0bc4a2Both wallets show patterns commonly associated with relay wallets used in money laundering.For example, each wallet has only five transactions in total, with small amounts being transferred, which is a typical characteristic of temporary relay wallets used for one-time fund transfers.Figure 2: Relay Wallet PatternSource: BSC Scanhttps://bscscan.com/address/0x9d636e330abef7a34fbb079580e6c3d20b4dd3ccContinuing our investigation from 0x543568d6c7b41537eb0bb9ed455e77949f0892ae, we found that some funds within this money laundering cluster were received from two centralized exchanges (Figure 3) CoinEx and Gate.io.Figure 3: CEX Connection for Fund Deposits to the ClusterThe complete transaction trail is as follows:Wallet 0x17eef0f69e0cf668ab51b75aab5b944ca09fb3e0 received a total of 1.2738 BNB from Gate.io and CoinEx.Gate.io → 0x17eef0f69e0cf668ab51b75aab5b944ca09fb3e00.46 BNB sent on 2025-02-12 at 11:39 PM (UTC)TX: 0xf1c6f53328e13ab82ec754e3292e718ae8d783c4f6c00c0c1dd396979300a178CoinEx → 0x17eef0f69e0cf668ab51b75aab5b944ca09fb3e00.81 BNB sent on 2025-02-10 at 19:26 PM (UTC)TX: 0xbf063a7f3bafeacbfc190b2739e58f822c98018b5bf732a3aef9e1004f5e1d24To gather more details, cooperation from CEXs is required to obtain IP logs, KYC data, and further transaction records. This should be coordinated with law enforcement for verification and further investigation.Here is the continued transaction trail(Figure 4) from 0x17eef0f69e0cf668ab51b75aab5b944ca09fb3e0:Figure 4: Full Trail for Reverse TrackingHere's a structured breakdown of the transaction history: 1) 0x17eef0f69e0cf668ab51b75aab5b944ca09fb3e0 → 0x8fa78148eabcda855f84e98d6568ce9f93c5c8ceAmount: 0.10 BNBDate: 2025-02-11 at 06:02 AM (UTC)TX: 0xaba91fc1a940dc1cfe3ef3a88f0a0b11aaf0451dc914680c13d10a2eb3f0ec6c 2) 0x8fa78148eabcda855f84e98d6568ce9f93c5c8ce → 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572Amount: 0.09 BNBDate: 2025-02-13 04:40 AM (UTC)TX: 0xc37c888605d24a16ca083e0ed13e47eba3946ca1840f80c5e5ca2f37d1346db5 3) 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572 → 0xd9cbf4290651ef7f8b4571a55167a414619bd15bAmount: 0.05 BNBDate: 2025-02-13 at 05:24 AM (UTC)TX: 0x29cb21f7bc3bd4686bd6d055a216663eb893c7bccfc362506d9be7c2d9e0f437 4) 0xd9cbf4290651ef7f8b4571a55167a414619bd15b → 0x543568d6c7b41537eb0bb9ed455e77949f0892aeAmount: 0.05 BNBDate: 2025-02-17 at 02:15 AM (UTC) TX: 0xbf380e69478f585694cd80ed257e11a7be692511a0da03cf90abbb7e7fcafb7e 5) 0x543568d6c7b41537eb0bb9ed455e77949f0892ae → 0x9d636e330abef7a34fbb079580e6c3d20b4dd3ccAmount: 0.05 BNBDate: 2025-02-19 at 04:50 AM (UTC)TX: 0x60701fdd9a31edde197316df50068b002472e430d7b412e495a71f94c1401661SummaryThe original transaction of 0.10 BNB was sent from 0x17eef0f6 to 0x8fa78148.The same amount was immediately transferred to 0x672ee9a8.Then, 0.05 BNB was split off and sent to 0xd9cbf429 on Feb 13.That 0.05 BNB was further transferred to 0x543568d6 on Feb 17.Finally, it was moved to 0x9d636e33 on Feb 19.This means the initial 0.10 BNB transaction was divided into two 0.05 BNB transfers, and one of those portions moved through multiple addresses.This pattern indicates layering in the money laundering process, where small amounts are moved between multiple addresses to obscure the original source of funds.The wallets linked to 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572 show some distinct characteristics compared to typical relay wallets.As seen in the transaction patterns, many small incoming transactions of 0.016 BNB are received from various addresses. These funds are then consolidated into larger amounts such as 0.3 BNB, 0.6 BNB, and 2.354 BNB before being sent out.This pattern suggests that the wallet might be used for fund aggregation, (Figure 5) where small amounts from multiple sources are collected and then distributed in larger transactions. Such behavior is often observed in cases related to money laundering, transaction obfuscation, or automated fund processing. However, further analysis would be needed to determine the exact intent behind these transactions.Figure 5: Fund Aggregation PatternExpanding on this pattern, the transaction flow can be visualized as follows:On the left side, numerous addresses send small amounts of BNB (e.g., 0.016 BNB) into the wallet. These small transactions are then collected and consolidated before being sent out in larger amounts on the right side (e.g., 0.3 BNB, 0.6 BNB, 2.354 BNB).This structure suggests a fund aggregation mechanism, where multiple small inputs are gathered and then processed into larger outgoing transactions. This pattern is commonly seen in:Mixing services attempting to obscure the origin of fundsMoney laundering activities using structured deposits and withdrawalsAutomated fund distribution for services or payoutsFurther investigation into the sources of these small deposits and the destinations of the larger transactions would be necessary to understand the true purpose of this activity.(Figure 6)Figure 6: Full Visual of Fund Aggregation PatternWhen dealing with such a high volume of transactions, it becomes difficult to manually analyze and track all the movement patterns. This is where an AI investigator can be extremely useful.Figure 7: AI Investigator SupportThe AI Investigator's full analysis of wallet 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572 suggests potential money laundering activity based on the following transaction patterns:AI Investigator responseUpon analyzing the transaction data for the origin address 0x672ee9a8db4ce9787752f7ca34b85a1d30f69572, several patterns emerge that could be considered suspicious or indicative of potentially fraudulent or unusual activity:High Frequency of Small Incoming Transactions: There is a noticeable pattern of numerous small incoming transactions (negative depths) from various addresses. These could be indicative of a dusting attack, where small amounts of cryptocurrency are sent to a wallet by an attacker in an attempt to deanonymize the wallet by linking it to other accounts or to engage in a phishing attack.Repeated Transactions Between the Same Addresses: There are several instances where the same addresses appear multiple times in the transaction list, both sending to and receiving from the origin address. For example, address 0x1d3146598721f9380fd3860e960602b782288b7a appears multiple times in both incoming and outgoing transactions with similar amounts. This could suggest a pattern of cycling funds, which might be an attempt to obfuscate the movement of funds (a technique often used in money laundering).Timing of Transactions: If the transactions are occurring at regular intervals or at specific times that coincide with certain events, this could indicate automated behavior or timing the transactions to avoid detection during low-traffic periods.Similar Transaction Amounts: Transactions that are consistently for similar amounts, especially if they are just below reporting thresholds, could be indicative of structuring, a technique used to avoid triggering legal reporting requirements and scrutiny.Rounded Transaction Amounts: Many transactions are for rounded amounts of BNB (e.g., 0.1 BNB, 0.5 BNB), which is unusual for regular transactions but common in artificial transaction patterns.Direct Reversal of Transactions: Some transactions appear to be directly reversed shortly after they occur. For instance, address 0x1d3146598721f9380fd3860e960602b782288b7a sends 0.1 BNB to the origin and then receives a similar amount back. This could be indicative of wash trading, where an entity trades with itself to create misleading market activity.Use of Multiple Addresses: The use of a large number of receiving and sending addresses in relation to the origin address could indicate an attempt to disguise the true source or destination of the funds through address hopping.It is important to note that while these patterns can be indicative of suspicious activity, they do not provide conclusive evidence of wrongdoing. Each pattern would need to be investigated more thoroughly in the context of additional information outside of this dataset. Identifying suspicious patterns is the first step, and each observation would require further analysis and context to determine if there is indeed fraudulent or illegal activity occurring.ConclusionTo summarize, automated mixing clusters consist of multiple types of wallets, each serving different roles. Some of the identified funds have been deposited from Gate.io and CoinEx, indicating potential exchange interaction.With this information, Bybit should collaborate with law enforcement agencies for further investigation.Within these clusters, different wallets serve specific functions:Relay Wallets: Used to transfer funds without holding them for long.Storage Wallets: Hold a portion of the funds temporarily.Distribution Wallets: Collect and redistribute funds.If overlapping patterns emerge among these wallets, there is a high probability that they are linked to the same group, similar to what ZachXBT described in the Phemex hacking case.However, based on our extensive investigations, while on-chain data may suggest these wallets belong to the same group, hacking groups and money laundering networks often operate separately. Multiple organizations frequently collaborate to facilitate illicit transactions, making it essential to conduct deeper profiling to determine which individuals or entities are involved.We will continue to investigate this case and update the community as we gather more insights.

BountyKing

2025.02.232010

Community Investigation

The Bybit Hack: A Wake-Up Call for Crypto SecurityThe crypto world was shaken in February 2025 when Bybit, a major centralized exchange (CEX), suffered the largest hack in history. Attackers exploited vulnerabilities in Bybit’s security system, stealing approximately $1.4 billion worth of Ethereum (ETH) from its cold wallet. This incident surpasses previous record-breaking hacks, including the Ronin Network breach in 2022 and the WazirX attack in 2024.Inside the Attack: How Hackers Stole $1.4 BillionThe Bybit hack was executed using an advanced social engineering attack. Hackers tricked the exchange’s team into approving a fraudulent transaction that granted them control over the cold wallet. Here’s how it unfolded:Malicious Transaction Masking – The hackers embedded a hidden smart contract modification inside a seemingly harmless transaction. This transaction appeared to transfer assets from the cold wallet to a legitimate hot wallet.Signer Deception – The project’s team members, responsible for approving transactions, unknowingly authorized the malicious transaction, believing it to be a routine fund transfer.Cold Wallet Takeover – Once the transaction was signed and approved, control of the cold wallet was transferred to the attacker, who then moved the stolen assets into their own wallets.Immediate Fallout – Panic spread across the market as news of the breach emerged, leading to a decline in Bitcoin and other cryptocurrencies. Traders quickly adjusted their positions amid the uncertainty.Bybit’s CEO, Ben Zhou, swiftly addressed the situation, reassuring users that the compromised cold wallet was an isolated case and that customer funds would be restored through Bybit’s reserves.Breaking Down the Tech: Cold Wallets, Hot Wallets, and Multi-Signature SecurityTo understand how this attack was possible, it’s crucial to differentiate between key crypto storage methods:Cold Wallets: Offline storage solutions offering higher security by keeping assets disconnected from the internet.Hot Wallets: Online wallets providing convenient access but exposing funds to hacking risks.Multi-Signature (Multi-Sig) Wallets: Require multiple approvals to execute a transaction, adding an extra layer of security.Despite Bybit’s use of a multi-signature cold wallet, the attackers manipulated the approval process, effectively bypassing its security measures.Lessons from the Bybit Hack: How to Stay SafeThe Bybit breach highlights the growing sophistication of crypto hacks and reinforces the need for enhanced security practices. Here’s what we can learn:Beware of Social Engineering Attacks – Hackers often manipulate trusted individuals into granting unauthorized access. Always verify transaction details carefully.Strengthen Security Protocols – Even multi-signature wallets are vulnerable if signers can be tricked. Additional verification steps, like hardware authentication, should be implemented.Routine Security Audits – Continuous monitoring of smart contracts and transaction approvals can help identify vulnerabilities before they are exploited.Use Hardware Wallets for Maximum Security – Users concerned about exchange security should consider moving funds to hardware wallets for enhanced protection.Community Vigilance Matters – Crypto investigators, like ZachXBT, play a key role in tracking stolen funds and raising awareness of security risks.The Future of Crypto Security: What’s Next?This attack serves as a wake-up call for the entire crypto industry. Moving forward, exchanges must adopt:Multi-Party Computation (MPC) Technology – A more advanced security mechanism that reduces the risks associated with multi-signature wallets.Stronger Authentication Measures – Two-factor authentication, biometric verification, and AI-powered fraud detection should become standard.Regulatory Compliance – Defined security guidelines can help exchanges maintain higher protection standards for users.Education & Awareness – Users must remain informed about security threats and best practices to safeguard their assets.Final Thoughts: Strengthening Crypto’s Security FutureThe Bybit hack is a stark reminder of the risks associated with digital currencies. As crypto adoption grows, so do the threats. The industry must prioritize security enhancements, and users should stay vigilant to protect their investments. By working together—exchanges, developers, and the community—we can build a safer and more resilient crypto ecosystem.

code2exit

2025.02.232360