Today, federal law enforcement announced that they have clamped down on a series of digital currency operations tied to the February 2025 Bybit hack. This episode is already considered one of the biggest crypto hacks in history. The investigators have been able to follow the money and successfully recovered more than $35 million in stolen Bitcoin. As of March 20, they’ve recovered almost all assets—almost 89%—thanks in part to a $2 million bounty program that Bybit launched and the efforts of blockchain trackers. It was this investigation that identified suspicious transactions that came from one anonymous wallet and eventually led law enforcement to the eXch exchange.
The Bybit hack shook the crypto community to its core. It sparked an unprecedented collaboration among the FBI and foreign cybercrime authorities, from one side of the Atlantic to the other. FBI is currently seeking to recover billions in stolen dollars. At the same time, the pressure in the crypto space is building as the Fed hints at reforming monetary policy and as the crypto giants whales are throwing down gauntlet.
Bybit Hack and Recovery Efforts
These transactions made just a few minutes apart came from the same anonymous wallet. Blockchain analysis trackers traced the dubious Bitcoin activity back to the Bybit hack. It was this breakthrough that allowed law enforcement to track a part of the pilfered money to eXch. Bybit promised its customers that it was able to cover the potential losses.
The firm’s reaction to the hack included layoffs as it shut down portions of its Web3 arm. They further shuttered their NFT marketplace in the wake. Bybit has fully bounced back from the hack, having reclaimed its pre-hack market share to retake about 7% of global crypto volume as of April 10.
The company’s $2 million bounty program was very much the focus of the recovery efforts. So far blockchain investigators have enjoyed tremendous success tracing stolen assets. As of March 20, almost 89% of those assets have been recovered.
eXch Exchange Under Scrutiny
On January 31, eXch announced that it would close down on May 1. The company blamed the decision on a hostile regulatory environment and intelligence operations aimed at its leadership. The exchange's leadership pointed to unsustainable pressures.
“We’ve withstood pressure before,” eXch’s leadership wrote, “but operating under direct SIGINT [Signals Intelligence] pressure isn’t sustainable.”
The exchange is now under investigation as authorities work to unravel the complex web of transactions and recover the remaining stolen funds.
Crypto Transparency and Policy Reform
The story around the Bybit hack, and how the investigation unfolded, showcase just how transparent the crypto space is becoming. As one blockchain investigator points out, this is a key detail. In fact, moving dirty money on-chain makes it far easier for authorities to track stolen funds and recover them.
“This shows how much more transparent crypto has become,” said one blockchain investigator. “If you move dirty money on-chain, we’ll find it.”
Once again, the Fed is opening the door to reforming policy. Jerome Powell, Fed Chairman We’ve implemented a more conservative approach, especially with regards to the recent failures and fraud. As he readily admits, they have recently begun entering a different stage.
“We’ve taken a conservative stance, especially after the wave of failures and frauds,” Powell said. “But we’re entering a new phase.”
