TechFlow reported on March 5 that, according to Cointelegraph, cryptocurrency exchange Bybit confirmed it had submitted a proposal requesting the decentralized finance (DeFi) protocol ParaSwap to return transaction fees generated when the Lazarus hacking group used digital assets stolen from the exchange. On March 4, a proposal was posted on ParaSwap's decentralized autonomous organization (DAO) forum calling for the freezing and return of nearly $100,000 worth of 44.67 wETH. The proposal initially raised skepticism, with multiple DAO members demanding verification of its origin. Bybit confirmed its sponsorship of the proposal on March 5 via a verification post on its official X account.
The fund-return proposal has sparked intense debate among DAO members. DeFi researcher and ParaSwap DAO representative Ignas pointed out that profiting from a hack presents a "bad image," and returning the funds would demonstrate support for industry peers. He added that retaining the funds could attract regulatory scrutiny and legal complications. However, he also warned that a refund would set a dangerous precedent for DeFi: "Code is law. The DAO legitimately earned these fees through smart contracts. If we return them now, what should we do in similar future cases? This sets a dangerous precedent."
Opinions among ParaSwap DAO members remain divided, with some supporting conditional return of the fees while others voted against reimbursement. DAO member SEED Gov proposed three possible courses of action: full repayment, rejecting the request, or negotiating a structured repayment—such as retaining 10% as a bounty, consistent with Bybit's existing bug bounty program.
