Germany seized 38 million dollars from Bybit hack.

[348Judah]

If Bybit can prove that the money that was recovered was part of the $1.4 billion that was hacked on Feb. 21, 2025, the exchange should be entitled to the funds.

I don't see any reason why they cant proof on such, because they were actually hacked, but what of the government that now seized on innocent peoples fund and fail to do the needful in making refund back to Bybit, are they helping the situation or making it get more worse, if we could remember that US has been always found doing the same, taking hold on seized coins and they don't return back to the exchange and then each affected users get refunded, can we even proof that governments are not behind some of these hacks?

[Amphenomenon]

If Bybit can prove that the money that was recovered was part of the $1.4 billion that was hacked on Feb. 21, 2025, the exchange should be entitled to the funds.

How can it be proved when the scammers have successfully made use of the exchange. Why not arrest OKX and others also? They all should be arrested because the scammers also successfully make use of their exchanges. Read what I posted above.

According to ZachXBT, I think this might be the reason:

A press release just posted from the Frankfurt prosecutors office revealed the instant exchange 'eXch' had 34M euros and infrastructure for the platform seized by law enforcement.

eXch was used to launder hundreds of millions from the Bybit hack, Multisig hack, FixedFloat exploit, $243M Genesis Creditor theft, and countless phishing drainer services over the past few years with refusal to block addresses and freeze orders.

Also, maybe they had them on their radar before after all exch has been existing for like more than a decade now.

[NotATether]

Also, maybe they had them on their radar before after all exch has been existing for like more than a decade now.

An exchange has to choose between displeasing the government by not scamming anyone, or displeasing its own customers by stealing their money, including when there is no criminal origin. <- that money may or may not end up being handed over to the government by the way, as the majority of exchanges operate in the grey zone.

Many such exchanges that do ask for KYC sometimes are also seized by European police.

[Coyster]

I don't see any reason why they cant proof on such, because they were actually hacked,

Everyone knows that they were actually hacked, which is their fault of course, but how can you prove that all the coins seized from this platform is part of the bybit stolen money, when the hackers have moved the coins in so many different ways and directions.

if we could remember that US has been always found doing the same, taking hold on seized coins and they don't return back to the exchange and then each affected users get refunded, can we even proof that governments are not behind some of these hacks?

When assets are seized from illicit individuals and institutions, more often than not, the asset is forfeited to the government after the legal process is complete. In this case though, the authorities have just taken assets from a platform they do not like because they don't comply with KYC laws, i am sure they cannot be sure that the assets belong to bybit.

[NotATether]

When assets are seized from illicit individuals and institutions, more often than not, the asset is forfeited to the government after the legal process is complete. In this case though, the authorities have just taken assets from a platform they do not like because they don't comply with KYC laws, i am sure they cannot be sure that the assets belong to bybit.

It is obvious that the $38.4m seized did not all come from Bybit.

[suzanne5223]

The stealing was made easy by the eXch platform. Am exchange platform believed to help in money laundering.

The coin was laundered on several exchanges and not just only exch. OKX DEX and ParaSwap were among and more. Why the regulators do not seize the money from the other two exchanges? Why only exch?

All of them have helped in money laundering if exch is accused. All of them do not require KYC also. Bybit also has DEX called WEB3 on the exchange which does not require KYC.

Yes, all the 3 exchange platform helped the Bybit hacker to laundery the stolen cryptocurrency but both OK Dex and ParaSwap was not shutdown because they decentralized platform, and also show some level of cooperation when they were called out. Besides, it lead to a dispute among the ParaSwap DAO's delegate, and OKX on the other hand shutdown their Dex service which I never see or hear anything about eXch doing anything related to that and from the record eXch is a privacy automatic cryptocurrency exchange, which I believe it is not decentralized.

Now that there is a suspect, will Bybits recover it's lost funds. Can we still trust Bybit with our assets?

It is not possible for them to recover 100% of the fund, but why would anyone trust CEX with his/her own asset when they are not to be use as storage in the first place.

[Amphenomenon]

Also, maybe they had them on their radar before after all exch has been existing for like more than a decade now.

An exchange has to choose between displeasing the government by not scamming anyone, or displeasing its own customers by stealing their money, including when there is no criminal origin. <- that money may or may not end up being handed over to the government by the way, as the majority of exchanges operate in the grey zone.

Many such exchanges that do ask for KYC sometimes are also seized by European police.

The fact is either they continue to stay true to their word or they opt out and they choose the best in an ironic which definitely would be disappointing to the government.

Usually both parties are actually working for their best interest rather than the customers or victims. I think this would encourage others to the same also and stick with the word even against the government.

It's a fact that once the government are on any exchange they find a way to make them the black sheep, although I'm not disrupting the fact that some where not just shady but rather entirely black.

[Mrbluntzy]

Now that there is a suspect, will Bybits recover it's lost funds. Can we still trust Bybit with our assets?

What warning signs should exchange users look out for?

Despite the hack, Bybit is still running their exchange perfectly okay and no user complained that they  lost their asset because of the hack. Do I still use bybit exchange? Yes I do and that the exchange has been serving me well but I don't keep my coins on the exchange, keeping your coins in a centralized exchange is at your own risk, it's either the exchange gets hacked or your own gets hacked.

[Fiatless]

When assets are seized from illicit individuals and institutions, more often than not, the asset is forfeited to the government after the legal process is complete. In this case though, the authorities have just taken assets from a platform they do not like because they don't comply with KYC laws, i am sure they cannot be sure that the assets belong to bybit.

If the seized proceeds came from illicit activities like drugs, terrorism, and others, the government might take ownership. But in cases where it is a business entity, they might decide to return it to the exchange, like in the case of Mt. Gox and  FTX. The funds that were hacked from Bybit are customers's deposits. They would need these recovered funds to balance their financial books.

Now that there is a suspect, will Bybits recover it's lost funds. Can we still trust Bybit with our assets?

Good to hear that there is now a suspect. At least he could help investigators unravel the mystery behind this criminal network from North Korea.

[nelson4lov]

The only problem with this is that German government will not send the recovered funds back to bybit. Instead, they will keep it and dump it on the market as they have always done. I know the right way would be to refund it back to bybit but I don't think these guys will return any of it.

[notocactus]

The only problem with this is that German government will not send the recovered funds back to bybit. Instead, they will keep it and dump it on the market as they have always done. I know the right way would be to refund it back to bybit but I don't think these guys will return any of it.

How did you know that German government will keep it and won't return the fund back ot Bybit?

I am not a lawyer and I don't know about legal process but I doubt that German government will easily do it nowadays and in future. Things changed in cryptocurrency market and there will be considerable legal changes too so I don't assume that governments exclusively German government will be able to do similarly to their past cryptocurrency seizures and actions after that.

They did it in the past with bitcoin.
https://cointelegraph.com/news/german-government-offloads-final-bitcoin-holdings

[PrivacyG]

I am starting to notice an increase in the number of topics blaming more privacy oriented services, software or what ever else it is and attacking them for apparently no real reason.  It makes me wonder if these are real topics and written by real people.  If not, then either the dead internet theory is strongly here or the society is preparing to collapse at a fast pace.

Since when is freedom helping crime?  Is this where we are heading?  Is it the right path?  Because if ancestors and generations close to us died fighting for us to be more free, it would be an under statement to say that we are stupidly heading back to what the world was before they fought.  It is unbelievable to me that I start noticing more and more people bashing freedom and cheering invasive laws, procedures and services.

eXch is not HELPING criminals by simply existing.  If anything, like NotATether said before me, the hacked exchange 'helped' them steal the funds.

In fact.  I did not check the direct transactions to see what and how, but if they came directly from a Bybit wallet to an eXch wallet, even if eXch had Know Your Customer and all the other stupidly invasive procedures, it is likely that eXch still passed the transaction as legitimate consdiering it comes from an EXCHANGE.  You know, the platform some people believe are getting shiny clean Bitcoin from!

But, the irony!  Mixers are bad, Tornado is bad.  Do not send them money to get a piece of Bitcoin unrelated to you in exchange.  That is Money Laundering.  Send your Bitcoin to an invasive exchange instead, they will send you a piece of Bitcoin that is clean of any crime!  That is legitimate and the only right way to do it!

[Justbillywitt]

Now that there is a suspect, will Bybits recover it's lost funds.

If the suspects pleads guilty to the charges, there is a chance that the money can be recovered, even if not hundred percent of the money, at least a good amount can still be recovered. But at the moment they are just mare suspects, we can't tell for now if the money will be recovered or not.

Can we still trust Bybit with our assets?

As always you are not supposed to trust any centralised exchange with your assets. This is why we have non custodial wallets. You should not trust any exchanges be it Bybit or any other exchanges. Go there conduct your transactions and take your assets off exchanges. Bybit is still a good exchange in carrying out transactions, but don't store your assets there or any other cex.

[NotATether]

In fact.  I did not check the direct transactions to see what and how, but if they came directly from a Bybit wallet to an eXch wallet, even if eXch had Know Your Customer and all the other stupidly invasive procedures, it is likely that eXch still passed the transaction as legitimate consdiering it comes from an EXCHANGE.  You know, the platform some people believe are getting shiny clean Bitcoin from!

A handful (<10) of companies most likely control almost the entire market share for blockchain analysis, so it wouldn't surprise me if all it takes for arbitrary transactions to be flagged as high-risk is a few phone calls between their directors.

There is no transparency into this process at all.

Normal people, and small businesses, are not allowed by these companies to get a detailed report on their addresses to check if they are compliant. Large enterprises only.

Even the exchanges who freeze funds and require KYC aren't safe. Because the only way to know for sure that they haven't processed a high-risk transaction by accident is to subscribe to these expensive products that give access to the database of risky addresses.

Since we already know that state governments essentially rely on these products to create their sanctions list (how else do you think Royse777's escrow address for the Sinbad campaign got added?), that means a handful of people control the global AML database, and provide the only access to it.

So if you don't have millions of dollars of (clean, probably VC funded) cash/crypto to pay, you cannot compete. You cannot launch an exchange legally. Even BestChange's exchangers, which try to operate within the law and ask for KYC, get seized regularly.

And all this does is centralize the exchange market share to 3-5 giant companies that everyone is then forced to use. Unless you choose to use no-KYC mixers, which will continue to be created and ignore AML laws - and rightfully so because without paying for these products, how do they pass on the frozen transactions to the government?

[Coyster]

Now that there is a suspect, will Bybits recover it's lost funds. Can we still trust Bybit with our assets?

Good to hear that there is now a suspect. At least he could help investigators unravel the mystery behind this criminal network from North Korea.

There is no suspect, and i think the OP is referring to eXch as the suspect here, which is utter bullshit. Bybit were obviously not hacked by eXch, and the authorities are famous for blaming and going after the no-KYC service, rather than closely looking into the platform that holds billions of their customers money, but did not invest sufficiently in their security to prevent falling victim to hackers.

[nelson4lov]

~Snipped.

How did you know that German government will keep it and won't return the fund back ot Bybit?

I am not a lawyer and I don't know about legal process but I doubt that German government will easily do it nowadays and in future. Things changed in cryptocurrency market and there will be considerable legal changes too so I don't assume that governments exclusively German government will be able to do similarly to their past cryptocurrency seizures and actions after that.

They did it in the past with bitcoin.
https://cointelegraph.com/news/german-government-offloads-final-bitcoin-holdings

How did I know? I don't.

Like you, I'm not a lawyer and I'm also not conversant with legal matters but I do know governments and how shady they can be. Can we honestly agree that German government will make contact with Bybit and ask for their addresses too return all the recovered assets?

Regulations only changed much in the US—I'm not sure if we can say thee same for Germany.

[Glowy]

Now that there is a suspect, will Bybits recover its lost funds. Can we still trust Bybit with our assets?

What warning signs should exchange users look out for?

Hint? Links below 👇🏼
https://cointelegraph.com/news/what-happened-in-crypto-today

https://cryptotvplus.com/2025/05/germany-seizes-38m-in-crypto-from-exchange-tied-to-bybit-hack/

If Bybit can prove that the money that was recovered was part of the $1.4 billion that was hacked on Feb. 21, 2025, the exchange should be entitled to the funds.

Trusting a centralized with your funds is risky. Exchanges are not safe to keep your funds because they are prone to hacks and other human errors.

Since the exchange is still functioning without any restrictions, I think they have enough funds to cover up the losses. But nothing is certain since we cannot ascertain the actual state of the exchange.
The article didn't state how the fund was recovered. I thought it was reported that the North Korean Lazarus group was behind the hacks.

Yes Lazarus group was mentioned in another article .
This is one of the articles that had Lazarus group captured, although when researching for this post this was the exact article that had the group involved.

[The Hidebehinder]

German authorities today, 9th May 2025 announced the seizure of $103,220 worth of BTC, $2,000 worth of LTC $99.48, Dash $23.85.

That doesn't add to 38 millions I don't see how the government could have seized LTC from the hack when Ethereum was stolen from bybit!

The stealing was made easy by the eXch platform.

You are accusing exch of helping with the stealing or what?
For an article making it over here on Bitcointalk I've never seen something this biased in a while, even a police or law enforcement statement would be less than this.

The only problem with this is that German government will not send the recovered funds back to bybit.

They will return coins or the value of those if there is a criminal case against, if the coins are owned by a guilty party they will proceeded to confiscate the coins like it happened with Movie2k, the same happened with Bitfinex funds that have been returned and funds seized from SR that have sold.

[Publictalk792]

The Bybit hack is famous and the German government does know about it. With this hack, the victim is Bybit and Safe multisig wallet, and if there are receivers of those seized coins as victims, it will not be any user on Bybit exchange.

Remaining part of story is how German government will use seized coins but Bybit exchange will have good advantage if they are considered as a legit company in legal terms in Germany. I am not sure about it but gooling shows me that German people can use Bybit and I see good chance for Bybit exchange to claim those coins from German government.

It is true that Bybit hack especially one with Safe digital wallet got much attention. That is right Bybit and Safe were ones directly affected by stealing. If German government took some of the stolen coins people who might get those coins back probably are not just regular Bybit users who had money on exchange.
Most important part of this story like you said is what German government plans to do with coins they took. This will likely depend on Germany laws about taking stolen things and giving them back.
Even though German users can use Bybit which might show some connection to Germany legal system Bybit would still need to make strong legal argument to get coins back. They need to prove that stolen money was theirs and show that they meet Germany legal requirements for getting such money returned.
It is complicated legal situation and just because Germans can use Bybit does not mean they will definitely get coins back.

[armanda90]

Despite the hack, Bybit is still running their exchange perfectly okay and no user complained that they  lost their asset because of the hack. Do I still use bybit exchange? Yes I do and that the exchange has been serving me well but I don't keep my coins on the exchange, keeping your coins in a centralized exchange is at your own risk, it's either the exchange gets hacked or your own gets hacked.

Its fully fund from exchange hack not user fund because Bybit keep running well without have withdrawing problem for all user, if exchange keep running well maybe they have bigger back up fund than fund have been stolen and Bybit keep operation such as usually until right now. However keep 100% of cryptocurrency assets in exchange wallet not guarantee secure learning from FTX exchange bankrupt last two years ago without refund to their user.

I don't see any reason why they cant proof on such, because they were actually hacked, but what of the government that now seized on innocent peoples fund and fail to do the needful in making refund back to Bybit, are they helping the situation or making it get more worse, if we could remember that US has been always found doing the same, taking hold on seized coins and they don't return back to the exchange and then each affected users get refunded, can we even proof that governments are not behind some of these hacks?

Lets see few weeks later what happen with 38 million dollar seized by German government will refund to Bybit exchange or become Germany's government assets although its not all Bybit fund. In this cases, usually US and Germany government never return back the seized cryptocurrency assets and taking hold the seized assets before selling such as last year ago Germany government sold 50k bitcoin.