Lazarus Group Loses $5M in USDC as Circle and Other Issuers Freeze Funds

• North Korea’s notorious Lazarus Group has recently lost control of nearly $5 million in stablecoins stored across two specific wallets, following an effective fund freeze initiated by stablecoin issuers.
• Blockchain investigator ZachXBT led the efforts, revealing that Lazarus Group laundered over $200 million in cryptocurrency into fiat within a span of three years, exploiting 25 different blockchain platforms.
• “As of today, all four stablecoin issuers (Paxos, Tether, Techteryx, Circle) have blacklisted the two addresses with nearly $5 million from Lazarus Group, alongside $1.65 million frozen at various exchanges, totaling $6.98 million,” stated ZachXBT.

North Korea’s Lazarus Group seized by stablecoin issuers in a coordinated freeze of nearly $5 million worth of assets, adding a major blow in the ongoing battle against crypto laundering.

Lazarus Group Loses Access to $5 Million in Stablecoins

A coordinated effort spearheaded by blockchain detective ZachXBT has led to a freezing of close to $5 million worth of stablecoins stored in two wallets allegedly tied to North Korea’s state-supported Lazarus Group. This group is infamous for its involvement in large-scale cryptocurrency thefts, amounting to over $200 million in fiat conversion over the last three years. The stolen money was traced and identified through the meticulous work of employees from Metamask, Binance, TRM Labs, and Five I’s LLC.

ZachXBT’s Investigation: Uncovering a Mountain of Laundered Funds

In a detailed investigation, ZachXBT revealed that Lazarus Group managed to steal substantial amounts over numerous exploits within various blockchain ecosystems. These illicit activities involved cashing out the stolen funds through multiple accounts on peer-to-peer marketplaces. The diligent research by ZachXBT and the support systems in place led Tether (USDT), Circle (USDC), Techteryx (TUSD), and Paxos (BUSD) to promptly freeze the assets in an effort to curb the nefarious operations of the hackers. Notably, the freeze did not extend to additional assets worth approximately $1.03 million, still retained across the two wallets.

Circle’s Delayed Freeze Raises Questions

While the swift action by most stablecoin issuers was commendable, ZachXBT pointed out that Circle, the issuer of USDC, lagged significantly in freezing the funds. This lag was highlighted in a post criticizing Circle for taking 4.5 months longer than its counterparts to act. The post also questioned the operational efficiencies within Circle, citing the absence of an incident response team capable of immediate intervention during such hacking or exploit incidents. As of writing, Circle has not provided any comments to address these concerns, leaving a gap in the response to ZachXBT’s findings.

Conclusion

The decisive actions taken by stablecoin issuers to freeze the assets tied to Lazarus Group mark a significant step in disrupting the group’s illicit activities. ZachXBT’s investigation showcases the critical role of blockchain sleuthing in tracing and immobilizing stolen crypto assets. Additionally, the disparity in response times among various issuers underscores the need for streamlined, prompt incident response mechanisms across all platforms. This case not only highlights the vulnerabilities within the crypto ecosystem but also emphasizes the importance of collaborative efforts in safeguarding the financial landscape from state-sponsored cybercriminal activities.