Key Takeaways
- Bybit has released a streamlined portal for reporting suspected stolen funds.
- The portal is open to VIP customers only, but the exchange might extend to retail users.
- The portal promises to initiate an investigation and subsequent action within 2-4 hours of reporting.
In light of growing crypto scams and hacks, Bybit, a global crypto exchange, has launched a VIP portal that promises swift action on suspected stolen funds.
The first few hours after a hack or theft of funds by nefarious actors are critical, as these funds are often moved via decentralized and centralized platforms to mixing services. If identified, these funds can be frozen and returned.
Bybit’s VIP Stolen Funds Reporting Portal
Bybit has launched a new VIP-level reporting service for stolen funds to streamline filing suspected inflow reports.
This service, announced on Sept. 29, aims to provide a streamlined, secure channel for reporting suspected inflows of stolen cryptocurrency assets onto the Bybit platform.
It is managed by Bybit’s Lazarus Security Lab, a specialized 24/7 team focused on rapid response.
The “Report Stolen Funds” portal is accessible via Bybit’s official website. It allows victims to submit cases of suspected stolen assets entering the platform and promises an expedited review within 2-4 hours.
Bybit may then impose temporary account restrictions as a precautionary measure to preserve evidence and prevent further fund movement.
However, these restrictions do not constitute a legal freeze. A Bybit spokesperson emphasized that victims remain responsible for filing official complaints:
“The affected party remain responsible for filing with law enforcement and obtaining official freezing orders to pursue enforceable recovery.”
This means the portal functions primarily as a fast-track evidence-preservation tool rather than a recovery mechanism in itself.
David Zong, Head of Group Risk Control and Security at Bybit, said the exchange’s priority is ensuring that VIP clients have fast and direct access to trusted tools when they need them most.
“This service focuses on stolen fund inflows, allowing us to act quickly to secure evidence while clients prepare their law enforcement filings. It represents our responsibility to our clients and our duty to regulators and the wider ecosystem.”
The portal is currently only available to VIP clients, though there are plans to make it available to retail users eventually.
When Bybit Might Decline Action
Asked by CCN whether reports from VIPs could be declined, a spokesperson clarified:
“We won’t [decline] as long as it provides essential required information for our further evaluation.”
This highlights the importance of providing complete and verifiable information in reports so that Bybit’s security team can take discretionary action.
How Does the New Illicit Fund Reporting Work?
The stolen report submission portal directly submits stolen fund inflow cases to Bybit’s security team. It allows for expedited internal review to preserve evidence and apply precautionary measures before victims involve law enforcement.
The Lazarus Security Lab reviews the submissions within 2-4 hours. After review, Bybit may impose temporary internal restrictions on suspicious accounts as a discretionary precaution to prevent further movement of funds.
These restrictions are not temporary legal freezing orders; they serve only to secure evidence and do not guarantee fund recovery. Once official processes are initiated, Bybit cooperates with law enforcement.
Victims must file reports with law enforcement and obtain official freezing orders for enforceable recovery actions. The portal does not handle recovery directly; it is a supportive tool for initial reporting and internal action.
Lessons From the January Hack
Bybit was the victim of one of the largest hacks in crypto history earlier this year, losing an estimated $1.3 billion. In comments received by CCN, a Bybit spokesperson acknowledged that the initiative is part of an ongoing effort to expose hackers.
“The initiative is part of the on-going LazarasBounty team’s effort to reiterate that transparency protects assets and reveals illicit hackers through rapid precise security,” the spokesperson said.
The Lazarus Security Lab was developed following that breach, with a mission to enhance transparency, build regulator-ready processes, and fortify Bybit’s defenses against illicit inflows.
Looking Ahead
While fast-tracking internal reviews, the exchange stresses it cannot bypass law enforcement procedures. Cooperation with regulators remains intact, as the spokesperson noted:
“The affected party remain responsible for filing with law enforcement”
For now, the service remains VIP-only, but the exchange has indicated it may extend access to retail users in the future, further broadening protection across its global customer base.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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