tl;dr
Renowned crypto sleuth ZachXBT has uncovered extensive North Korean involvement in decentralized protocols, with concerns that this could lead to anti-crypto regulations. He identified the North Korean Lazarus Group as responsible for the recent Bybit hack and criticized THORChain and OKX for facili...
Renowned crypto sleuth ZachXBT has uncovered extensive North Korean involvement in decentralized protocols, with concerns that this could lead to anti-crypto regulations. He identified the North Korean Lazarus Group as responsible for the recent Bybit hack and criticized THORChain and OKX for facilitating the laundering of stolen funds. Data from Arkham Intelligence supports his claims, showing North Korea as the third-largest national crypto holder.
Although on-chain analysis can prove that North Korea has these assets, it’s practically impossible to speculate what exactly the country is doing with them. The nation has been growing closer to Russia, which openly advocates for using crypto to evade sanctions. However, experts have only been able to speculate what North Korea is buying.
It’s clear that North Korea is deeply embedded in the crypto space. Given the country’s reputation, it’s likely that these large proceeds from the crypto industry directly fund its military.
ZachXBT worries that North Korea has exposed how broken the crypto space is. He called KYT “completely flawed and easily evadable,” and said KYC is “just a honeypot for regular users” due to breaches and “useless in the majority of cases.”
ZachXBT fears that the vulnerabilities in the crypto industry could lead to harmful government regulations. He claims that several decentralized protocols owe nearly all their trade volume to the DPRK. ZachXBT worries that the industry may not be capable of solving the problem, inviting anti-crypto regulations.
ZachXBT has pursued North Korean hacker activities on many occasions and previously criticized Circle for its slow response in preventing money laundering. The Bybit hack, the largest heist in crypto history, has highlighted the epidemic nature of the problem. THORChain and OKX were both criticized for facilitating Lazarus’ Bybit laundering.
Overall, it’s clear that North Korea is deeply embedded in the crypto space. Given the country’s reputation, it’s likely that these large proceeds from the crypto industry directly fund its military.