According to blockchain analytics firm Elliptic, Binance, and Huobi, two prominent cryptocurrency exchanges, have frozen approximately $1.4 million worth of cryptocurrencies linked to North Korea. These funds were stolen in the June 2022 hack of Harmony's Horizon Bridge and were dormant until recently.
The collaboration of Binance and Huobi against the Lazarus Group
Elliptic collaborated with Binance and Huobi to freeze the Lazarus Group hack proceeds, stating that “the stolen funds came from the June 2022 hack of Harmony's Horizon Bridge.” The blockchain analytics firm explained that “the Horizon cross-chain bridge was attacked on June 24th, 2022, resulting in the loss of $99.6 million in crypto assets.” “These funds were laundered through the now-sanctioned Tornado Cash, an Ethereum mixer banned by the US Department of the Treasury's Office of Foreign Asset Control (OFAC) in August last year.”
How did the hack done by Lazarus Group according to Elliptic investigators
The Lazarus Group, a North Korea-controlled cybercrime organization, was responsible for the hack, according to Elliptic investigators. The hacker sent over 98% of the $100 million in stolen crypto assets into the Tornado Cash mixer, which Elliptic traced to its complete trail. The stolen crypto assets included ether (ETH), tether (USDT), wrapped Bitcoin (WBTC), and Binance coin (BNB). The hacker immediately used Uniswap to convert the Ethereum-based assets into 85,837 ETH.
Elliptic noted that “the stolen funds remained dormant until recently when investigators saw them funneled through complex chains of transactions to exchanges.” Simone Maini, Elliptic's CEO, commented that “the money laundering and the freezing of the stolen funds linked to North Korea were detected in real-time.” Maini emphasized that the cryptocurrency industry has the power and responsibility to prevent digital assets from becoming a haven for money launderers and sanctions evaders, ensuring that they are a force for good.
In conclusion, Binance and Huobi's decision to freeze crypto assets linked to North Korea demonstrates their commitment to preventing illicit activities from occurring on their platforms. The collaboration between the exchanges and Elliptic, a blockchain analytics firm, is an example of how technology can be used to combat financial crimes in the cryptocurrency industry. It is vital that the industry continues to take proactive measures to prevent digital assets from being used for nefarious activities.
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