Key Takeaways
- The upgrade, version 1.7.10, is designed to block illicit transactions within the protocol
- The decision comes after Chainflip identified flows from the Bybit hack entering its network on February 22
Leading Cross-chain trading protocol Chainflip is rolling out an emergency software upgrade to prevent the movement of funds linked to the $1.4 billion Bybit exploit. The upgrade, version 1.7.10, is designed to block illicit transactions within the protocol, aiming to protect liquidity providers (LPs) and users from exposure to high-risk funds.
The decision comes after Chainflip identified flows from the Bybit hack entering its network on February 22. In response, the protocol immediately restricted access to its main interface to prevent further transactions involving the stolen funds. According to Chainflip, the upgrade is now in the final testing phase and is expected to be deployed within the next 24 to 72 hours.
The 1.7.10 update enhances Chainflip’s broker-level screening tools, allowing brokers to identify and reject incoming Bitcoin deposits deemed high-risk. Any rejected deposits will be returned to the user’s specified refund address. Chainflip stated that this functionality will also be extended to Ethereum and ERC-20 tokens to improve detection across multiple blockchain networks.
Chainflip acknowledged that while screening tools provide an additional layer of security, there are limitations. Since anyone can set up a new broker, bad actors may attempt to bypass restrictions. To address this, Chainflip has partnered with SwapKitPowered and Rango Exchange, allowing them to reject deposits flagged as high-risk.
The protocol has also been working with blockchain security firms, including Elliptic and Chainalysis, as well as Bybit’s API, to track and prevent the movement of stolen funds. Chainflip has stated that it will not support transactions linked to wallets associated with major hacks, fraud, or scams. The company emphasized that these measures are aimed at maintaining security and protecting its users.
In addition to its software update, Chainflip temporarily placed one of its primary interfaces into maintenance mode to prevent further exposure to the Bybit hack. The move which created some uproar was defended by Chainflip. It stated “We do not need regulators to tell us what to do in this situation.”
Once the upgrade is fully implemented, Chainflip plans to reopen access to its swap interface, allowing normal trading activity to resume. The firm further expressed confidence that these security improvements will encourage LPs who had withdrawn liquidity to return.
The protocol expects the update to be live by or before February 27, following final testing and deployment.
