bitcoin scam

Hackers Lose $30 Million Stolen Crypto

Stolen Ethereum Seized from Lazarus Gang

North Korean hacking group, “Lazarus” may have made off with over $620 million worth of cryptocurrency this year, but the USA law enforcers are finally catching up to them, after seizing $30 Million of the stolen loot. Now soon, crypto heists may be a thing of the past.

After the state sponsored hackers targeted the token-based “play to earn” game Axie Infinity earlier this year, the FBI, along with various blockchain analysts were able to recover a small portion of the stolen cryptocurrency.

News of the retrieval spread fast at the AxieCon conference, at which the hosts emphasized it as a community accomplishment with extensive cooperation between numerous law enforcement agencies and private organizations.

This is the first time in history, where stolen cryptocurrency has been recovered from a North Korean hacking group. According to a Chainalysjs report, ‘it won’t be the last.’

Chainalysis Spook Hackers

According to Axie Infinity, Chainalysis was one of the first cyber security companies to respond with its Crypto Incident Response team, with its analysts playing a huge role in the seizures of some of the stolen money. From employing advanced tracking technology to tracing the stolen funds, and the hackers cash-out points. Chainalysis has been credited with liaising with law enforcement and other big security industry players to quickly freeze funds, even a small portion of the stolen $620 million.

With no attempt spared, the Chainalysis security firm was able to match the patterns of the Lazarus hackers to a typical five-stage laundering process – which ultimately made the damage easier to reverse. First, they transferred the stolen Ethereum to intermediary wallets, then, Tornado Cash, a popular crypto-mixer was used to mix the Ethereum into batches. The shuffled Ether would then be swapped for Bitcoin, and the Bitcoin would then be mixed into batches.

To add to their streak of bad luck, the recent sanctions imposed on Tornado Cash by the United States Department of Treasury forced the hackers to seek out an alternative for the remaining third of the stolen money. In the end, they had no choice but to use bridges between blockchains to obscure their movements.

Crypto Rinsing Scheme

Chainalysis not only identified their five-part scheme, but they were also able to track their “chain-hopping” and trace all attempted crypto swaps, assisting law enforcement authorities in freezing and retrieving some of the funds.

However, as every cloud has its silver lining, there are some downsides to the recovery. While the seized funds will be transferred into Axie Infinity’s treasury and returned to the players’ community, the game’s publishers have stated that this will be a gradual process that may take several years.

Not only that, the approximate $620 million lost as a result of the hack means that only 5% of that value and 10% of the cryptocurrency amount has been recovered.

End of Ransomware Scams?

Still, the blow to Lazarus is no short order, they are some of the world’s most sophisticated hackers, and to bring them down has sent a resounding message ringing through the DeFi hacking community.

According to Chainalysis, most of the stolen funds are still sitting in cryptocurrency wallets unused, as the hackers can no longer risk getting caught by attempting to withdraw their loot, at the moment.

With this victory at the forefront of the cyber world, security firms now recognize the new difficulty of moving, laundering, and eventually cashing out stolen digital assets as fiat – as well as the patterns hackers use to do so. They can now begin to design software and techniques to make it impossible to do so – Hopefully in the near future.

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