Chainflip Implements Measures to Block Illicit Transactions Following Bybit Hack
Chainflip, a leading decentralized cross-chain protocol, has announced enhanced security measures to block illicit transactions on its network. The decision follows the detection of suspicious flows linked to the recent Bybit hack. The new safeguards, aimed at protecting liquidity providers (LPs) and maintaining network integrity, are set to be implemented within the next 24 to 72 hours. The protocol’s team collaborated with the community, liquidity providers, interface operators, and a majority of validator providers to formulate the plan. The initiative seeks to prevent exposure to high-risk transactions, ensuring a safer environment for LPs. In response to the Bybit incident, Chainflip temporarily disabled access to its primary interface and has since coordinated with partners to prevent any illicit flows from impacting the protocol. Enhanced Broker-Level Screening Introduced The upgraded security measures are primarily centered on broker-level screening. In version 1.7.10, brokers—an intermediary role enabling interfaces to interact with the network—can now reject high-risk deposits not only in Bitcoin but also in Ethereum and all ERC-20 tokens. These rejected deposits are automatically refunded to users. To counter potential evasion, Chainflip is collaborating with key partners, including SwapKit and RangoExchange, who possess advanced screening tools. These partners will be whitelisted on the network, allowing them to reject any suspicious deposits facilitated by any broker. This approach is designed to provide a more comprehensive safeguard against illicit flows. Safeguarding LPs and Ensuring Network Integrity Chainflip’s enhanced monitoring system involves close cooperation with blockchain analytics firms such as Elliptic and Chainalysis, as well as ongoing communication with the Bybit team. The protocol aims to prevent its platform from being used by wallets linked to criminal activities, thereby minimizing risks for liquidity providers. The upgrade is intended to bolster confidence among LPs, encouraging them to contribute more capital while reducing exposure to security threats. As a result, Chainflip expects improved liquidity and competitiveness within the decentralized finance (DeFi) sector. While some critics have labeled the temporary shutdown of swap.chainflip.io as centralization, Chainflip maintains that its decision was driven by commercial and ethical considerations rather than regulatory pressure. The protocol emphasizes its commitment to safeguarding its ecosystem from criminal activity while preserving its decentralized nature. Following deployment and testing, Chainflip plans to restore access to its main interface and resume normal operations. The team has pledged to monitor network activity closely and enhance protective measures if needed, reaffirming its dedication to maintaining a secure and reliable DeFi environment.
