Chainalysis aids in seizing $30 million worth of cryptocurrency stolen by North Korean-linked hackers

A troubling trend in crypto crime right now is the stunning rise in funds stolen from?DeFi protocols, and in particular?cross-chain bridges. It is estimated that so far in?2022, North Korea-linked groups (especially elite hacking units like Lazarus Group)?have stolen approximately USD 1 billion of cryptocurrency from DeFi protocols.?

It was in this way that cybercriminal group, Lazarus, stole more than USD 60 million worth of?cryptocurrency from the token-based play-to-earn game, Axie Infinity, earlier in the year – 30 million of which has now been seized.?

The stolen funds were retrieved through a joint effort between the federal government, Copenhagen Fintech member Chainalysis, and blockchain researchers, marking the first time ever that cryptocurrency stolen by a North Korean hacking group has been seized. ?

The Chainalysis Crypto Incident Response team played an important role in these seizures, utilising advanced tracing techniques to follow stolen funds to cash out points and liaising with law enforcement and industry players to quickly freeze funds.?

The seizures represent approximately 10% of the total funds stolen from Axie Infinity (accounting for price differences between time stolen and seized) and demonstrates that it is becoming more difficult for bad actors to successfully cash out their ill-gotten crypto gains.

Chainalysis has proven that with the right blockchain analysis tools, world-class investigators and compliance professionals can collaborate to stop even the most sophisticated hackers and launderers. ?

Investigating hacks such as these is made significantly easier through the transparency of cryptocurrency. With the right tools, investigators can follow the money to understand and intercept laundering activities – something which is impossible in traditional financial channels, where money laundering usually involves networks of shell companies and financial institutions in jurisdictions that may not cooperate.???

The seized money will gradually be deposited into Axie Infinity's treasury and returned to the players' community. However, the process could take years to complete.?

Even so, these seizures would not have been possible without collaboration across the public and private sectors. Much of the funds stolen from Axie Infinity remain unspent in cryptocurrency wallets under the hackers’ control. Work with the cryptocurrency ecosystem will continue, to prevent them and other illicit actors from cashing out their funds.?

Read more about exactly how the funds were seized here.