The Lazarus Group: Responsible for Over $300 Million in Crypto Hacking Losses
A hacker organization known as the Lazarus Group, believed to be linked to North Korea, has caused crypto hacking incidents resulting in losses of over $300 million in 2023. This accounts for approximately 17.6% of the total losses incurred throughout the year. Despite a decline in major crypto hacking incidents globally, North Korea has maintained its position as a significant actor in cybercrime.
Crypto Heists By Lazarus Group Exceed $1.9 Billion
The Lazarus Group gained notoriety for its involvement in some of the largest cyberattacks, particularly in the cryptocurrency industry. They have been active since 2014 when they launched a cyberattack against Sony Pictures. Since then, they have targeted crypto protocols and successfully stolen billions of dollars. One notable attack occurred in March 2022 when they stole $600 million from the Ronin Network, a bridge used by the popular Web3 game Axie Infinity.
In 2023, it was revealed that North Korean hackers had amassed over $3 billion from digital heists, with about 50% of these funds allegedly being used to finance the country’s ballistic missile program. From 2021 to 2023, approximately $1.9 billion has been stolen from various crypto projects, with the Ronin Network hack being the largest exploit. In 2023 alone, Lazarus executed five successful attacks, including a $70 million theft from the Hong Kong-based crypto exchange CoinEx in September. Some of the stolen funds were laundered through a crypto wallet address previously associated with Lazarus.
Digital Assets Hacks Plummet By Over 50%
Despite these alarming figures, there has been a decline in the overall amount of money stolen in digital asset hacks in 2023 compared to previous years. According to TRM Labs, the total stolen funds decreased by over 50%, while the number of attacks remained relatively stable. This decline can be attributed to increased cybersecurity measures implemented within the industry, the heightened focus of law enforcement agencies, and reduced profitability due to declining prices.
However, the Lazarus Group remains a serious threat. In 2023, they shifted their strategy towards targeting centralized finance (CeFi) platforms like CoinEx, as well as users of noncustodial crypto wallet Atomic and the online casino and betting platform Stake.com.
US Treasury Takes Aim At Crypto Exploits
Law enforcement agencies have taken steps to combat these activities by tracing stolen funds and disrupting services known as crypto mixers, which make tracking more challenging. The US Treasury Department sanctioned Tornado Cash, a popular mixing service, in August 2022 and indicted two of its founders for money laundering in September 2023. In November, Sinbad.io, another mixer frequently used by Lazarus Group, was also sanctioned.
To address digital exploits further, the Treasury Department aims to expand its supervisory powers over the sector. Deputy Secretary Wally Adeyemo proposed stricter know your customer (KYC) standards for decentralized platforms such as mixers and wallet providers during a crypto industry policy summit in late November.
Hot Take: Continued Vigilance Needed to Combat Crypto Cybercrime
The persistence and evolving tactics of groups like Lazarus highlight the need for continued vigilance and proactive measures to safeguard the crypto ecosystem. Strengthening cybersecurity practices, enhancing regulatory oversight, and fostering international cooperation will play crucial roles in combating cryptocurrency-related cybercrime.
Featured image from Shutterstock, chart from TradingView.com
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