Bybit’s $140M Bounty Hunt: Can Onchain Sleuths Track Down the Biggest Crypto Heist?

The crypto world is reeling from the largest hack in industry history, with $1.4 billion worth of Ether and staked Ether tokens drained from Bybit’s wallets. Now, the exchange is offering a massive $140 million bounty to blockchain investigators who can help recover the stolen funds. But can this approach really work—especially when North Korea is suspected to be behind the attack?

Bybit’s Bold Bounty Move

Crypto exchange Bybit is putting up a 10% bounty for any portion of the funds that can be tracked and recovered. This means that blockchain security experts stand to earn millions by tracing, locating, and freezing stolen assets.

“We want to officially reward our community who lent us their expertise, experience, and support,” said Bybit’s co-founder and CEO Ben Zhou in a statement.

Bounty programs like this are not new; post-hack negotiations with attackers often offer a share of “clean” funds in exchange for returning the stolen assets. However, when nation-state actors are involved—particularly North Korea, which has a history of funding its operations through crypto hacks—the chances of voluntary fund recovery are slim. This makes Bybit’s bounty an intriguing test of whether blockchain forensics can outmaneuver some of the most sophisticated cybercriminals in the world.

Early Wins in the Fund Recovery Effort

Despite the grim outlook, some funds have already been clawed back. On Saturday, Mudit Gupta, Polygon’s chief security officer, revealed that Security Alliance, a coalition of crypto security experts, had recovered 15,000 cmETH—Mantle’s Ether liquid staking token—valued at approximately $43 million.

Meanwhile, Tether CEO Paolo Ardoino announced that his firm had frozen $181,000 worth of USDT linked to the Bybit hack. These efforts highlight how centralized stablecoin issuers and decentralized investigators can work together to mitigate damages.

BitGalactic’s Take: The Future of Onchain Investigations

At BitGalactic, we see Bybit’s bounty as part of a growing trend where crypto security firms and independent blockchain analysts play a crucial role in cybercrime prevention. The transparency of blockchain transactions makes it possible to track stolen assets, but the real challenge lies in enforcement—getting law enforcement agencies or centralized platforms to act on the data.

For bounty hunters, this presents a lucrative opportunity, but it also raises questions: Will Bybit pay out in full? How will they verify successful recoveries? And, perhaps most importantly, does this shift crypto security from a matter of prevention to post-breach forensics? The industry is watching closely.

Kaito AI Airdrop: A Pump or Sustainable Growth?

While Bybit’s drama unfolds, crypto traders on X (formerly Twitter) are celebrating Kaito AI’s token airdrop. The crypto intelligence platform, which analyzes social media sentiment, distributed 10% of its governance tokens to over 85,000 wallets on Thursday. Some lucky users received over $100,000 in tokens, according to blockchain analytics firm Nansen.

Despite an initial 28% price surge, history suggests that airdropped tokens tend to decline rapidly. A report from Keyrock in September 2024 found that 88% of airdropped tokens lost value within 15 days. Will Kaito AI defy the odds? With only five days on the market, the verdict is still out.

Ethena’s $100M Raise: Betting Big on DeFi’s Future

In another major development, Ethena, the DeFi protocol behind the USDe stablecoin, has secured $100 million in funding from top venture capital firms, including Franklin Templeton and Polychain Capital. This investment comes as Ethena’s USDe gains traction as an alternative to traditional stablecoins.

Unlike Circle’s USDC or Tether’s USDT, which are backed by fiat reserves, USDe maintains its peg through a complex hedging strategy involving short positions on Bitcoin, Ethereum, and Solana futures. While this model has helped the protocol amass nearly $6 billion in circulation, the risk of sudden liquidations and volatility remains a concern.

From BitGalactic’s perspective, Ethena’s funding round underscores the growing interest in algorithmic stablecoins and DeFi-native financial products. However, the crypto industry has seen multiple algorithmic stablecoin failures, from Terra’s UST to lesser-known projects. Whether Ethena can navigate these risks will determine its long-term viability.

Final Thoughts: What’s Next for Crypto Security and Investment?

Bybit’s bounty, Kaito AI’s airdrop, and Ethena’s funding all point to a rapidly evolving crypto landscape. While hacks remain a persistent threat, the emergence of large-scale bounty programs signals a shift in how the industry tackles security breaches. At the same time, the market’s response to new projects highlights the ongoing tension between speculation and sustainable innovation.

At BitGalactic, we’ll be keeping a close watch on how these developments unfold. Will Bybit’s bounty be enough to recover the stolen billions? Can Kaito AI maintain its token value? And will Ethena’s model prove resilient in the face of market pressures? The crypto space never sleeps—and neither do we.