Chainflip Tightens Security After Bybit Hack, Introduces Illicit Transaction Screening

Cross-chain trading protocol Chainflip implemented rapid security measures to shield its ecosystem against funds from the $1.5 Billion Bybit hack.

This security upgrade seeks to complete all Bybit exploit transactions while protecting liquidity providers from receiving stolen assets.

The February 21 hack which became the biggest in crypto history caused hackers to remove 400 thousand Ethereum (ETH) from Bybit’s reserves. The hackers used a fake email to fool executives into permitting an unethical smart contract.

The stolen funds tracing and misuse prevention process was conducted with blockchain security firms that Bybit worked with after the incident.

Chainflip detected an attempt to wash stolen funds on February 22nd. When the attackers attempted unauthorized transactions, the protocol immediately closed access to its main interface swap.chainflip.io.

A short-term operational change worked together with extended security improvements to stop illegal money transfers from harming the protocol’s system.

Upgraded Broker Screening Now Covers BTC, Ethereum, and ERC-20

The 1.7.10 software upgrade from Chainflip created stronger broker-level screening abilities to stop stolen funds from being transferred.

Brokerage institutions formerly held the authority to decline cryptographic Bitcoin (BTC) transactions that posed high risks. The current v1.7.10 system update adds Ethereum (ETH) and every ERC-20 token within its security framework.

Brokers gain new capabilities from updated detection systems which let them identify and deny suspicious deposit transactions.

The system will immediately return high-risk deposits to the user’s refund address. Safety measures at Chainflip ensure all suspicious funds stemming from hacks and fraud or illicit activities will be blocked from accessing the platform.

To protect against security bypasses through new broker setups, Chainflip developed an approval system for new entities.

Chainflip has formed trusted partnerships with SwapKit and Rango Exchange platforms to allow these platforms access to advanced fraud detection tools for their security measures.

Authorized brokers part of the whitelisted group have been permitted to detect strange financial transfers throughout the network.

Deployment and Ongoing Monitoring

The security upgrade operates in the end phase of development since most needed code segments have already been generated.

Chainflip plans to execute its complete deployment between 24 and 72 hours. The updated system will become operational which will lead to the reopening of swap.chainflip.io while encouraging liquidity providers to redeposit their funds left during the temporary withdrawal period.

The Chainflip team has officially stated that it will continue active monitoring and protection for the security of the system.

Moreover, additional protective measures will be introduced by the protocol when any suspicious activity breaks through the new screening tools.

Relating to user concerns about interface shutdown Chainflip gave its reasons for that drastic measure.

Chainflip operates as a decentralized network that consists of 150 validator nodes and multiple liquidity providers according to its updated protocol. Decentralization principles prohibit the team from permitting illegal operations at any time.