Key points
- Circle accused of benefiting from transactions linked to North Korea’s Lazarus Group.
- Lazarus Group allegedly laundered $200 million in stablecoins between 2020 and 2023.
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Circle, the company behind the USDC stablecoin, is facing criticism from blockchain researcher ZachXBT for its late response to the blacklisting of funds associated with North Korean hacking group Lazarus.
ZachXBT alleges Circle took four months longer than other major stablecoin issuers to blacklist addresses linked to the Lazarus Group. The researcher claims that this delay allowed Circle to profit from transactions associated with the notorious hacking group, which has been implicated in numerous high-profile cryptocurrency thefts.
The allegations come in the wake of a recent hack on Indonesian cryptocurrency exchange Indodax, attributed to the Lazarus Group. The September 11 attack resulted in the theft of over $20 million, forcing the platform to temporarily suspend operations.
Investigations reveal a disturbing trend in the use of stablecoins to launder stolen funds. Evidence suggests that the Lazarus Group managed to launder approximately $200 million from various cryptocurrency vulnerabilities in stablecoins, including USDT and USDC, between 2020 and 2023. This has raised concerns about the role of stablecoins in facilitating illicit activities and the responsibilities of issuers in preventing such use.
ZachXBT’s criticism extends beyond the recent incident, alleging a systemic failure by Circle to act quickly in cases of DeFi attacks and exploits. The researcher claims that despite having a large staff, Circle lacks an incident response team to handle issues arising from DeFi attacks or exploits. These accusations come amid intensifying discussions about stablecoin regulation and anti-money laundering efforts in the crypto space.
Major stablecoin issuers have blacklisted addresses linked to
Recent ZachXBT Updates They indicate that the four major stablecoin issuers (Paxos, Tether, Techteryx, and Circle) have blacklisted two specific addresses associated with the Lazarus Group, freezing a total of $4.96 million. The addresses, 0x36f2D3871edd59d5C06DB8F0b12bE928d5922A70 and 0x12ED7f6ed0491678764c2b222A58452926E44DB6, held several stablecoins including USDT, BUSD, TUSD, and USDC.
According to the data provided, Circle was the latest to act, blacklisting USDC funds on September 14, 2024, nearly five months after other issuers took similar action. An additional $1.65 million was frozen across multiple exchanges, bringing the total amount frozen as a result of the investigation to $6.98 million.
The chain detective has had a number of high-profile investigations, including the exposure of Martin Shkreli as the creator of TrumpCoinand Binding a hacked GCR account a Solana meme coin team, among others.
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