Bybit sparks debates as it seeks nearly $100k in refund from ParaSwap DAO tied to hacker’s swap fees

Bybit has requested a refund from ParaSwap DAO for swap fees paid by a hacker, sparking a governance debate over ethical responsibility.

Cryptocurrency exchange Bybit wants ParaSwap DAO to return over $90,000 in Ethereum ($ETH) in swap fees tied to the $1.46 billion theft, sparking debate in the decentralized finance community over a move that could set a legal precedent.

In an X post on March 4, prominent defi analyst Ignas, who’s also a Paraswap DAO delegate, said that the exchange asked to return 44.67 $ETH from the ParaSwap DAO “that Bybit hacker paid in swap fees.”

“This decision has ethical and legal responsibilities against the DAO and sets a precedent for the wider DeFi ecosystem (notably Thorswap).”

Ignas

The analyst notes that Bybit is a major player in the space, adding that returning the funds could help avoid “legal headaches.” However, there’s still a catch, as returning the funds could set a precedent.

“Code is law. The DAO earned the fees legitimately via smart contracts. And if funds are returned now, what about future cases? Sets a dangerous precedent. And at the end of the day, Bybit’s poor security (I know Safe UI was compromised, but still) led to the hack.”

Ignas

The analyst suggest a middle ground, leaning towards returning most of the fund “minus 10% Bybit official bounty.”

Bybit’s CEO Ben Zhou earlier revealed that nearly 20% of the stolen funds are now untraceable, just less than two weeks after the exchange lost over $1.4 billion in a highly sophisticated attack by North Korea-backed hackers.