Bybit Collaborates with HKU on Anti-Money Laundering Research

Bybit, the world's second-largest cryptocurrency exchange by trading volume, recently concluded an anti-money laundering research collaboration with student teams from The University of Hong Kong (HKU), giving participants practical experience in cryptocurrency investigations, machine learning, and anti-money laundering analysis through a real-world demixing challenge [1]. The collaboration centered on the February 2025 Bybit security breach, with students exploring how blockchain analytics and machine learning can be applied to identify laundering pathways associated with cryptocurrency mixer activity and transactions linked to the Lazarus Group.

What drove the move

The project was proposed and supervised by Prof. Doyeon Kim, assistant professor in Accounting and Law at The University of Hong Kong, with Bybit providing the real-world investigative context and industry guidance throughout the research process [1]. As part of the collaboration, students were tasked with tracing Lazarus-linked funds on the Bitcoin blockchain, understanding the role of wallet addresses used during laundering operations, and developing machine learning approaches capable of identifying mixer-related transaction patterns and potential output addresses connected to illicit activity. Given the privacy-preserving design of cryptocurrency mixers, tracing exact transaction flows is mathematically infeasible, meaning there is no absolute or deterministic method for attribution [1].

The competitive picture

Bybit's collaboration with HKU students reflects growing interest among universities and digital asset companies in applying machine learning and blockchain analytics to real-world cybersecurity, compliance, and financial crime challenges [1]. Meanwhile, Bybit has been dominating the market share for BILL trading, with a 77.24% share of all centralized exchange trading, solidifying its position as the leading exchange for traders of emerging opportunities [2]. The BILLUSDT trading pair recorded a 24-hour trading volume of $1.69 billion as of May 15, with Bybit offering exclusive airdrop events and bonus programs for traders [2].

What to watch

• The recall rate of machine learning models against confirmed DPRK linked addresses
• The development of more effective blockchain analytics and machine learning approaches to identify laundering pathways
• The impact of Bybit's collaboration with HKU students on the company's anti-money laundering efforts and industry reputation

The collaboration between Bybit and HKU students has significant implications for the development of more effective anti-money laundering strategies in the cryptocurrency industry. With the increasing demand for talent in blockchain security and compliance-related fields, such collaborations can provide valuable insights and practical experience for students and industry professionals alike [1]. As the cryptocurrency market continues to evolve, the ability to identify and prevent illicit activities will become increasingly important, and collaborations like this one can play a crucial role in shaping the future of the industry.