US Seeks To Recover $2.6 Million in Crypto Stolen by North Korea’s Lazarus Group

From Deribit to Stake.com, the FBI warns of escalating crypto heists funding North Korean WMD programs.
Crypto, Voice of Crypto, Altcoin
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Key Insights

  • North Korea’s Lazarus group has terrorized the crypto industry over the last seven years since 2017.

  • This group has stolen nearly $3 billion in crypto, directly funneling around 40% of this haul into its WMDV program.

  • In recent news, the US government has sought to reclaim millions of stolen funds from this group.

  • It is important to stay safe and remain cautious in the crypto space, especially in light of these growing hacks.

The North Korean Lazarus group terrorized the internet for years since 2009.

According to Hacken, they then moved towards the crypto space in July 2017.

Their attack on the Bithumb exchange where they stole $7 million in a single day, marked their reign of terror in the web3 industry.

This group has netted an estimated $3 billion from hacks so far, according to a report from Recorded Future.

In recent news this week, the US government has filed a legal complaint against said hackers.

This complaint is part of an effort to recover $2.6 million worth of crypto stolen by this notorious hacking group.

Here are the major details.

Crypto Scam: Targeting the Lazarus Group

The Lazarus Group is allegedly sponsored by the North Korean government itself. This group alone has been responsible for most of the large-scale attacks in the digital asset sector.

Billions of dollars have now gone down the drain as the US government fights to claw back some portion.

The filing in question was submitted to the US District Court for the District of Columbia according to Yahoo Finance.

It outlines efforts to reclaim $1.7 million in USDT from the November 2022 hack of the Derbit exchange.

The Deribit hack

The Deribit hack

Keep in mind that the Panama-based exchange lost a total of $28 million.

In addition, the government is also attempting to recover around $971,000 worth of Bitcoin that was bridged through Avalanche.

This sum was stolen during the hack on Stake.com, a digital casino in September 2023.

Also, keep in mind that the original hack drained a staggering $41 million from the platform in a private key compromise.

Blockchain analysts have blamed this notorious group for the hack of the Indian exchange, WazirX in July 2024.

This hack alone cost the exchange an estimated $235 million in what is now one of the biggest hacks of the year.

In August as well, on-chain investigator ZackXBT revealed that North Korean developers have infiltrated at least 25 different crypto projects.

They carried out this operation through fake identities, tampering with code and even stealing directly from treasuries, Zach XBT says.

Stealing Crypto to Fund Weapons of Mass Destruction

So what does this group do with all that money?

There have been several reports about the Lazarus Group funneling funds into North Korea’s military programs.

This includes its weapons of mass destruction (WMD) efforts with nuclear bombs and more.

Considering the massive amount of damage this group has done in the crypto sector between 2017 and now, the US government has stepped in to address the situation.

One of the efforts made by the United States is its sanctions on the crypto mixing service, Tornado Cash.

For context, Tornado Cash and other similar services help users obscure the origin and destination of funds.

This makes it significantly harder for law enforcement agents to track the flow of said crypto.

As it turns out, the Lazarus group and other hackers happen to favor this platform.

This has led to Tornado Cash being labeled as a “key money laundering tool”.

FBI’s Warning on Lazarus Group’s Tactics

In addition to these legal and financial measures put in place, US authorities have been working to raise awareness about the threat.

According to a recent report from the United Nations panel, up to 40% of the funds stolen by North Korean hackers are directly being used to develop these weapons of mass destruction.

In September 2023, the FBI also issued a warning about some of the tactics these hackers use.

The agency also emphasized the group’s tendency to use social engineering schemes to infiltrate platforms and then steal crypto.

North Korean social engineering schemes are complex and elaborate, often compromising victims with sophisticated technical acumen,” the FBI said.

How Does This Affect the Crypto Industry?

The attacks since 2017 are part of a larger trend of state-sponsored hacks within the industry.

Attacking the crypto market in particular, has proven to be especially lucrative for hackers looking for quick profit and a lower likelihood of being tracked down.

The rise of defi and the relative “newness” of many projects in the space, make them particularly vulnerable to these bad actors.

While the US government is a step in the right direction, they also show that the crypto industry still has a long way to go in terms of safety.

Hackers continue to exploit weak points in blockchain protocols, exchanges and wallets. As such, every member of the crypto community must remain vigilant in the face of these threats.

What will happen next in the crypto space? Will the US government succeed in reclaiming these funds?

Will there ever be a future where the crypto industry becomes just as safe (or even safer) than the traditional finance ecosystem?

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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