Chainflip, a cross-chain decentralized exchange (DEX), is preparing a protocol upgrade aimed at preventing hackers responsible for the recent $1.4 billion Bybit hack from using its platform to launder stolen assets. In an announcement , Chainflip Labs emphasized the importance of protecting liquidity providers (LPs) and regular users from illicit activities. “The broad and overwhelming consensus amongst the Chainflip ecosystem is that illicit flows endanger the protocol by exposing LPs to too much risk,” the team stated, underscoring its commitment to safeguarding the network. Chainflip’s 1.7.10 Upgrade to Enable Brokers to Block Suspicious ETH and ERC-20 Deposits The upcoming 1.7.10 upgrade introduces enhanced screening tools that allow broker operators—including platforms like SwapKit and the Rango DEX aggregator—to reject suspicious deposits of ETH and ERC-20 tokens. With these improvements, brokers can more effectively prevent transactions linked to illicit sources. Chainflip noted that all participants in its ecosystem have voluntarily agreed to enforce these measures, aiming to enhance the platform’s liquidity and pricing competitiveness over time. Most of the code for the upgrade is already complete, with testing and deployment underway. The network expects the update to go live within 24 to 72 hours. “This solution should form a robust and permanent protection to LPs on the network,” Chainflip stated. “Going forward, Chainflip will not be useful to anyone whose wallet can be linked to any major incident, hack, fraud, or scam.” https://t.co/Z6nx0146qN — CHAINFLIP LABS (@Chainflip) February 24, 2025 The urgency behind the upgrade stems from Chainflip’s detection of the Bybit hackers attempting to swap USDC through its platform on February 22. In response, Chainflip temporarily placed its front-end swapping service into maintenance mode to block further attempts. Bybit Hack Becomes Largest Crypto Heist in History The Bybit hack, which occurred on February 21 , is now considered the largest crypto heist in history. Hackers exploited the exchange’s multi-signature approval process by using a fake user interface to conceal a malicious smart contract, ultimately draining a large portion of Bybit’s Ethereum (ETH) reserves. Investigations later linked the attack to the Lazarus Group, North Korea’s state-backed cybercrime organization. In the aftermath, Bybit CEO Ben Zhou announced that the exchange had replenished its ETH reserves through a combination of short-term loans, whale deposits, and ETH purchases. Meanwhile, blockchain analytics firm EmberCN reported that the attackers laundered approximately 89,500 ETH (valued at $221.5 million) within just two and a half days after the hack—representing 18% of the total stolen ETH. EmberCN warned that the remaining 410,000 ETH could be exchanged for other assets, like BTC or DAI, within the next two weeks. However, as reported, non-KYC exchange eXch has shown resistance to Bybit’s requests to block stolen assets passed through its platform. In a shared email with the Bybit risk team, eXch expressed frustration over what it claims are previous incidents where Bybit allegedly froze funds belonging to its users without adequate explanation. “Why should we assist an organization that has previously undermined our reputation?” the eXch team questioned in the email. The post Chainflip Plans Upgrade to Block Bybit Hackers from Using Its Platform appeared first on Cryptonews .
