Bybit has called on the ParaSwap DAO to return 44.67 wETH (~$100,000) earned in transaction fees from the Lazarus Group, which stole these funds from the platform.

Verification of Proposal Authenticity 🤝 @paraswap

We hear the DAO community’s concerns and want to reassure you — this proposal is legitimate and comes directly from Bybit.

Check the proposal in detail here: https://t.co/JUvPdXBkSZ
— Bybit (@Bybit_Official) March 5, 2025

The request was posted on the forum on March 4. The proposal to freeze and return the assets to the specified wallet sparked debates within the community. Some users pointed out that the publication needed verification. On March 5, Bybit confirmed it had initiated the request.

Udi Werthheimer, co-founder of Taproot Wizards, noted that refusing to return the funds could be seen as profit from a hacker attack, which would harm the platform’s reputation and attract heightened regulatory attention.

Bybit 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).

I'm a Paraswap DAO delegate but still split on… pic.twitter.com/gz83dk6whR
— Ignas | DeFi (@DefiIgnas) March 4, 2025

However, he also warned that returning the assets could set a risky precedent for DAOs, violating a key principle of decentralized protocols: “Code is law.”

According to Werthheimer, the fees were legitimately earned through smart contracts. If the DAO makes an exception, it could undermine the entire DeFi ecosystem. In the future, new demands for refunds, including controversial ones, may arise, the expert explained.

Some users supported a partial return option. They suggested transferring the majority of the funds but keeping 10% as a bounty for the DAO, aligning with Bybit’s own vulnerability policy. Other participants opposed the initiative, fearing reputational and legal consequences.

It should be noted that from February 24 to March 2, the THORChain protocol processed a record $4.66 billion in swaps. Analysts claim hackers used Bybit’s platform to exchange and launder the stolen funds.

On February 27, THORChain’s lead developer Pluto announced he would leave the project after a vote on blocking the malicious transactions was canceled.