Chainflip Network Upgrades to Prevent Bybit Hacker Laundering via Protocol

Chainflip Takes Immediate Action Against Bybit Hacker Funds

Chainflip, a decentralised cross-chain protocol, has moved swiftly to protect its platform from illicit funds linked to the recent Bybit hack.

The company introduced a new 1.7.10 upgrade, which aims to reject any deposits that could potentially be connected to the notorious attack, protecting its liquidity providers (LPs) from exposure to significant risks.

Chainflip Responds to Bybit Hack Attempts

Following the $1.4 billion hack of Bybit, the largest in crypto history, Chainflip detected attempts to funnel stolen funds through its protocol on 22 February.

The Bybit hacker has swapped ETH to BTC using its protocol.

Subsequently, there was also an inflow of USDC funds swapped from Uniswap.

This prompted the platform to enter maintenance mode and halt swaps temporarily.

The firm emphasised that protecting the network from exposure to the stolen funds was the primary reason for the suspension.

Protocol Upgrade to Block Hacker Deposits

In response, the team deployed a robust protocol upgrade, expected to be live within 24 to 72 hours.

The 1.7.10 upgrade introduces advanced screening tools that allow brokers within the Chainflip ecosystem to automatically block any high-risk deposits.

In their official announcement, the company exclaims,

"This solution should form a robust and permanent protection to LPs on the network."

As part of the upgrade, brokers now have the ability to block BTC deposits, with additional protections for Ethereum (ETH) and ERC20 token transfers.

The aim is to safeguard the protocol from exposure to illicit flows by ensuring any risky transactions are rejected and sent back to the user’s specified refund address.

Chainflip Ensures Better Protection for Liquidity Providers

Chainflip made it clear that the safety of liquidity providers is a priority.

The protocol’s enhanced screening tools have been designed to prevent hackers from using its platform to launder stolen funds.

The company stated,

"The broad and overwhelming consensus amongst the Chainflip ecosystem is that illicit flows endanger the protocol by exposing LPs to too much risk."

Chainflip has also partnered with other leading firms, such as SwapKitPowered and Rango Exchange, to help monitor and reject potentially risky transactions before they reach the network.

The company has assured that the upgrade will make the network more secure, reinforcing LPs' trust in the protocol.

Decentralised Networks Standing Together

The coordinated effort by Chainflip, along with partners like THORChain and Elliptic, aims to prevent the hackers linked to Bybit from moving their stolen funds through decentralised networks.

According to Chainflip, most of its ecosystem—including validators, liquidity providers, and key partners—agreed that steps must be taken to ensure the security and integrity of the protocol.

Reinforcing its commitment to maintaining a secure space for LPs, Chainflip assures,

"None of our network participants have any interest in supporting criminal activity."

Collaborating with Investigators to Prevent Crime in DeFi

Chainflip’s proactive stance includes collaboration with on-chain analysts and blockchain forensics firms such as Elliptic and Chainalysis to track and monitor suspicious transactions.

The company also stated it will no longer allow its protocol to be used by anyone whose wallet is linked to major incidents like hacks, fraud, or scams.

This bold step aligns with Chainflip’s mission to create a safer and more reliable environment for decentralised finance (DeFi) users.

Chainflip Takes Strong Stance Against Hackers

In an unambiguous message to the hackers, Chainflip delivered a strong statement:

"Take your stolen money elsewhere—we don’t want it."

With this clear stance, the company aims to show its commitment to cutting off criminal activity and securing the funds of legitimate users and liquidity providers.

As the Chainflip works to restore its services and user interface, it remains committed to safeguarding the platform and ensuring a secure environment for legitimate users and liquidity providers in the DeFi space.