Why Reversing the $1.4B Bybit Hack on Ethereum Is Impossible

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🚨🏃‍♂️ Can Ethereum Really “Rollback” a $1.4 Billion Hack? 🤔

As the cryptocurrency world continues to reel from the Bybit hack, a most intriguing question has arisen: can Ethereum’s developers somehow magically “roll back” the transaction to recover the stolen $1.4 billion? 🤑

Enter Tim Beiko, a wise and witty Ethereum developer, who has taken it upon himself to enlighten us on the technical barriers to such a feat. And, dear reader, it’s a tale of complexity, interconnectedness, and the futility of attempting to turn back the clock. ⏰

Beiko began by drawing parallels with two historical cases where blockchain reversals were feasible. In 2010, Bitcoin successfully rolled back transactions when a bug created 184 billion BTC. Ah, but that was a different era, my friends! The network was small, and the protocol violation was clear as day. 🌞

Similarly, Ethereum’s 2016 The DAO hack recovery succeeded because the stolen funds were frozen for 30 days, allowing time for community coordination. But, alas, those were simpler times, and the stakes were lower. 🌈

ELI5 why we cannot “rollback” Ethereum?

After yesterday’s Bybit hack, crypto commentators are again asking why Ethereum cannot “rollback” the chain to reverse the hack.

While experienced ecosystem actors near-unanimously agree that this is infeasible, it’s worth breaking down…

— timbeiko.eth (@TimBeiko) February 22, 2025

Beiko pointed out that the Bybit hack has fundamentally different challenges. The theft happened through a compromised multisig interface that made malicious transactions appear legitimate to signers. It’s like trying to spot a counterfeit bill in a stack of genuine cash! 🤑

From Ethereum’s perspective, these transactions followed all protocol rules, leaving no technical basis for intervention. It’s a bit like trying to stop a runaway train – it’s too late, and the damage is done! 🚂

Attempt to reverse Bybit hack could cause disruption

Beiko also warned that modern cryptocurrency infrastructure has grown more complex, like a spider’s web. The stolen funds were immediately mobile and could be routed through decentralized exchanges, lending protocols, and cross-chain bridges. Any attempt to reverse transactions would create a ripple effect, affecting legitimate trades and settlements. 🌊

While Ethereum can still theoretically implement “irregular state changes” when funds are frozen and isolated, the last such proposal in 2018 faced strong opposition. That attempt aimed to recover 500,000 frozen ETH from a Parity wallet bug but was rejected due to concerns about centralization and precedent. It’s a bit like trying to turn a ship around in mid-ocean – it’s just not feasible! 🚣‍♀️

The technical limitations have been further highlighted by recent developments. Crypto mixer platform eXch has rejected Bybit’s request for cooperation in tracking the stolen funds. And, oh dear reader, the hackers have already begun laundering the ETH through eXch, converting it to Bitcoin (BTC), Monero (XMR), and other cryptocurrencies! 🚫

eXch, the coin mixer platform used by North Korean hackers, rejected Bybit’s request for cooperation. SlowMist pointed out that eXch was involved in multiple security incidents, exposing the personal information of industry security personnel, and all platforms should improve…

— Wu Blockchain (@WuBlockchain) February 23, 2025

SlowMist’s founder warned that eXch has a history of hostile behavior toward security researchers and recommended exchanges increase risk controls for funds originating from the platform. It’s a bit like trying to tame a wild beast – it’s just not worth the risk! 🐺

The quick movement of assets through mixing services shows why technical solutions like rollbacks are no longer viable for major thefts in today’s crypto ecosystem. It’s a bit like trying to hold back a tsunami – it’s just not possible! 🌊

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2025-02-23 17:11