Shibarium Bridge Hacker Rejects Bounty, Sparking Investigation and Backlash Over Delayed Reporting

In a recent development, the hacker responsible for the September Shibarium bridge exploit, which resulted in the theft of an estimated $2.4 million to $4 million in tokens, has rejected a bounty offer from K9 Finance. This decision has triggered a detailed investigation and ignited criticism over the Shiba Inu team's handling of the security breach.

According to Shibarium Network, the official X account for the Shibarium blockchain, contributor Shima conducted an undercover investigation that revealed a critical error by the hacker. The hacker accidentally sent 0.0874 ETH to a "secret" withdrawal wallet, compromising their privacy and allowing investigators to trace the laundered funds through Tornado Cash to deposit addresses on the KuCoin exchange.

The Shiba Inu team initially responded by offering an amnesty payment to the hacker without immediately involving law enforcement, a move that has drawn sharp backlash from the crypto community. Critics argue that this failure to report the hack to authorities like the FBI undermines transparency and security, potentially setting a troubling precedent for decentralized projects.

Shiba Inu developer Kaal Dhairya has commended the investigation efforts, indicating plans to share the report with the FBI and KuCoin for further action. Meanwhile, the unclaimed ETH from the K9 bounty contract has been returned to contributors, including the Shiba Inu team's 20 ETH, closing that aspect of the incident.