Key takeaways
- Circle accused of profiting from transactions linked to North Korean group Lazarus.
- Lazarus Group allegedly laundered $200 million in stablecoins between 2020 and 2023.
Share this article
Circle, the company behind the USDC stablecoin, is facing criticism from blockchain investigator ZachXBT for its delayed response to the blacklisting of funds associated with North Korean hacking group Lazarus.
ZachXBT claims that Circle took four months longer than other major stablecoin issuers to blacklist addresses linked to the Lazarus Group. The investigator claims that this delay allowed Circle to profit from transactions associated with the notorious hacking group, which has been involved in numerous high-profile cryptocurrency thefts.
The charges follow a recent hack on Indonesian cryptocurrency exchange Indodax, attributed to the Lazarus Group. The September 11 attack resulted in the theft of more than $20 million, forcing the platform to temporarily suspend operations.
Investigations reveal a worrying trend of stablecoins being used to launder stolen funds. Evidence suggests that the Lazarus group successfully laundered approximately $200 million from various crypto exploits into stablecoins, including USDT and USDC, between 2020 and 2023. This has raised concerns about the role of stablecoins in facilitating illicit activity and the responsibilities of issuers in preventing this use.
ZachXBT’s criticism goes beyond the recent incident, alleging a systemic failure by Circle to act quickly on DeFi exploits and hacks. The investigator claims that despite having a large staff, Circle does not have an incident response team to handle issues arising from DeFi hacks or exploits. These accusations come amid heightened discussions about stablecoin regulation and anti-money laundering efforts in the crypto space.
Major stablecoin issuers blacklist linked addresses
Recent updates from ZachXBT indicate that the four major stablecoin issuers – Paxos, Tether, Techteryx, and Circle – have now blacklisted two specific addresses associated with the Lazarus Group, freezing a total of $4.96 million. The addresses, 0x36f2D3871edd59d5C06DB8F0b12bE928d5922A70 and 0x12ED7f6ed0491678764c2b222A58452926E44DB6, held various stablecoins, including USDT, BUSD, TUSD, and USDC.
According to the data provided, Circle was the last to act, blacklisting USDC funds on September 14, 2024, nearly five months after other issuers took similar actions. An additional $1.65 million was frozen across various exchanges, bringing the total amount frozen as a result of the investigation to $6.98 million.
The on-chain detective has led a series of high-profile investigations, including the exposure of Martin Shkreli as the creator of TrumpCoin, and the connection between a GCR account hack and a Solana meme coin team, among others.
Share this article
