Ethereum developer details technical barriers to reversing $1.4b Bybit hack

Ethereum developer details technical barriers to reversing $1.4b Bybit hack

Ethereum Developer Explains Why Bybit’s $1.4 Billion Hack Cannot Be Reversed

An Ethereum developer has outlined why the network cannot "rollback" transactions to recover the $1.4 billion stolen from Bybit.

The developer compared the situation to two historical cases where blockchain reversals were possible. In 2010, Bitcoin successfully rolled back transactions after a bug created 184 billion BTC. According to Tim Beiko, this rollback was feasible because the Bitcoin network was still small, and the issue was a clear protocol violation. Similarly, in 2016, Ethereum managed to recover funds from The DAO hack because the stolen assets were frozen for 30 days, allowing time for a coordinated response.

However, Beiko explained that the Bybit hack presents unique challenges. The attackers exploited a compromised multisig interface, making malicious transactions appear legitimate. From Ethereum’s perspective, these transactions followed all protocol rules, making intervention technically impossible.

Additionally, Beiko highlighted how the complexity of modern blockchain infrastructure makes transaction rollbacks unfeasible. Stolen funds can now be quickly moved across decentralized exchanges, lending platforms, and cross-chain bridges. Attempting to reverse such transactions could cause widespread disruption across the crypto ecosystem, affecting legitimate trades and settlements.

Although Ethereum can theoretically implement "irregular state changes" to freeze stolen assets, the last attempt to do so in 2018—aimed at recovering 500,000 ETH from a Parity wallet bug—was rejected due to concerns over centralization and setting a dangerous precedent.

Recent developments further underscore the challenges. Crypto mixer platform eXch has refused Bybit’s request for assistance in tracking the stolen funds. Meanwhile, blockchain security firm SlowMist has reported that hackers have already begun laundering the stolen ETH through eXch, converting it into Bitcoin, Monero, and other cryptocurrencies.

With no viable technical solution, the recovery of Bybit’s stolen funds now depends on tracking and enforcement efforts rather than blockchain intervention.