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.

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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.

They seized eXch coins, not Bybit's hacked funds.

That's like saying the government seized funds from a certain bank robery because the guy behind the attack used my store to buy some kebabs and the state taxed me.

Now, if I was a eXch user and used the service to swap some LTC to BTC... would they give me my pending funds? Or is the FIOD just stealing regular customers that want some on-chain privacy? cc @FIOD Netherlands - didn't you say "privacy is not the problem"?

It is actually good that the law enforcement authrorities are able to recover some of those funds as that shows that they are actively working to bring some form of sanity to the entire system. What I find very strange is why no one is question the security system of Bybit neither is anyone questioning their staff for possible insider compromise. Just like Oshosondy rightly said, there are many DEX exchanges involved in this incidence and none of them is being held accountable or being questioned about the hack apart from exch. That may show that there is more than they are telling us, perhaps they might want to use the opportunity to go after any infrastructure that represent privacy. I learnt that exch have been forced to shutdown their operation and by doing that, let's see if it will lead to more recoveries of the stolen funds.

OP, your story and news are not accurate; there are too many errors that could end up passing wrong information to those who don't pay attention to details. What was stolen from Bybit in total was about 401,000 ETH and not 400 ETH, and you don't say the stealing was made easy by eXch as if the team was among those who planned the attack.

It was just unfortunate enough that the innocent exchange was used by the criminals to clean their money, and not even a large portion of that money was laundered using eXch, but because it's an exchange that promotes privacy, they will be on the front line of news to carry the bad name (it has always been so).

Promoting privacy alone is a crime to the government. The Bybit hack was just the perfect excuse, which the authorities used to clamp down on eXch, and the money that they claim to have seized doesn't belong to Bybit, but because Bybit funds were moved through that exchange, they will make everything appear to be so.

You're making an unfair and misleading statement. EXch didn't make the stealing easy. As a matter of fact, eXch didn't have anything to do with the stealing.

The stealing and that some of the stolen funds were swapped via eXch are two different incidents. The former, the act of stealing, only involved alleged Lazarus hackers and Bybit. There were the highly trained and skilled state-sponsored hackers and the weak security of an exchange. EXch wasn't in any way part of it.

It was only after the hackers successfully took advantage of Bybit's security and stolen the funds that eXch, among others, came into the picture. EXch was simply one among a number of exchanges where the criminals moved their stolen funds.

It is what you read that you believed. Know that as good people are using the decentralized exchanges, so are hackers are also using the exchangs also. The only point you have is that exch is centralized which makes true while others is decentralized. But see what they do to tornado cash founder before Trump sent him out of prison.

Very wrong to say this. People who don't know exch will think that exch did all the job and helped them to launder the stolen funds. Exch is just another service, an instant exchange, which is a normal service that there are also other instant exchanges out there. It just so happens that they've been used for that. But if they weren't used by the hackers, they won't be thought of that. Too much damage and slander already done to them where in fact that they have already decided to close down the service.

I (want to) imagine that the million dollars seized will be given back to the people who lost them, but has the German government said something about the destination of the funds? It doesn't seem easy to track the money back to their rightful owners, although I don't think Germany will create any strategic reserve of Bitcoin anytime soon either, so what's next?

I don't know how it could impact Bybit not getting that money back, but I hope you're right and it eventually goes to it's legit owners, whoever they are, and I explain: As hd49728 said, it's not good advice to store your assets on any CEX, and I won't be sorry for Bybit either if they don't get the money back, just like NotATether, but I wouldn't like to find out that users, despite their recklessness, are affected by the incident.

Most of us have trusted one CEX or another when we started and some of us have suffered the consequences of their poor management too, but in some cases, which are the ones that worry me, it can be a lesson too expensive to learn. This doesn't seem to be the case, but credibility is a valuable asset that gets damaged little by little, if it is not taken good care of it.