How did North Korea’s Lazarus Group launder $200 million in stolen crypto?

ZachXBT, a pseudonymous on-chain investigator, has released a detailed report tracing how the North Korean hacking syndicate known as Lazarus Group allegedly laundered over $200 million in cryptocurrency.

The investigation covered more than 25 hacks across various blockchains from August 2020 to October 2023, revealing sophisticated methods to obscure the flow of stolen funds.

Use of coin mixers and cross-blockchain transfers

The report highlights that Lazarus Group extensively used coin mixers like the Ethereum-based Tornado Cash and Bitcoin’s ChipMixer to obfuscate the origins and destinations of their illicit transactions.

By mixing stolen funds with other transactions, they made it extremely challenging to trace the money back to its criminal source.

Furthermore, the hackers transferred tokens across different blockchains, adding another layer of complexity to their operations.

Peer-to-peer exchanges as a tool for laundering

In addition to using coin mixers, Lazarus Group also utilized peer-to-peer (P2P) exchanges, which allow direct transactions between individuals without the need for a centralized authority.

The report specifically mentions the Bitcoin P2P exchanges Noones and Paxful as platforms that facilitated some of these transfers, helping the hackers convert stolen digital assets into fiat currency.

Background on Lazarus Group’s criminal activities

Lazarus Group has been implicated in several high-profile cyberattacks, including a $41 million theft from gaming firm Stake.com and a massive $622 million exploit of the Ronin bridge.

These incidents are part of a broader pattern of cybercrimes that have cumulatively netted the group over $2 billion in stolen assets, according to FBI reports.

Industry collaboration in tracking down stolen funds

The investigation by ZachXBT was supported by insights from major industry players like the cryptocurrency exchange Binance and the popular Ethereum wallet MetaMask.

Their cooperation helped identify multiple accounts that are believed to be connected to the Lazarus Group.

These accounts reportedly received $44 million from the proceeds of the group’s various heists, a portion of which was successfully converted into fiat currency.

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