Bybit hack raises fear of criminal prosecution for negligent crypto leaders
In the aftermath of Bybit’s $1.4 billion loss — the world’s largest crypto exchange hack — many once-celebrated services are struggling to control the laundering of criminal proceeds. Memecoin generator Pump.fun, permissionless token exchange ThorChain, and many others are trying to comply with Countering the Financing of Terrorism (CFT) and Anti-Money Laundering (AML) rules. Bybit, which once claimed to be the world’s second most popular crypto exchange by trading volume, suffered a $1.4 billion hack on February 21. Its executives signed a malicious transaction that allowed hackers to sweep ether (ETH) from its multi-signature wallets. As panic set in, customers rushed to withdraw over $4 billion in deposits. Nevertheless, Bybit was able to secure some loans, and as of approximately 12 hours ago, claimed to have replenished liquidity to back customer deposits on a 1:1 basis . Over the past three days, hackers have swapped and liquidated some of the pr...