North Korean Hacker Group Lazarus Were Responsible for Axie Infinity Theft
Alejandro Arrieche Last updated: A total of $ 615 million were stolen from one of the most popular play-to-earn platforms in the cryptocurrency ecosystem, Axie Infinity, with hackers from North Korea apparently being responsible for one of the greatest heists in the space in the last few years.
Officials from the United States recently confirmed that a group of hackers known as the Lazarus Group in collaboration with APT38 were behind the incident that resulted in the loss of this eye-popping amount.
Hackers reportedly got their hands on the private keys of thousands of users whose digital assets were stored within a crypto wallet service known as the Ronin Network. The developing team behind Ronin stated that funds were stolen on 23 March but the transactions were not detected until at least a week after the incident took place.
According to some blockchain data providers, more than 10% of the funds withdrawn from Ronin have already been laundered and up to $ 10 million may already be standing by to be cleansed.
Authorities from the Federal Bureau of Investigation (FBI) managed to identify the Ethereum wallet to which the funds were initially moved and the Office of Foreign Assets Control (OFAC) imposed sanctions on this wallet specifically.
Third-party blockchain analytics firms confirmed that this sanctioned wallet was the one used by Lazarus to deposit the funds it withdrew from Ronin.
AXS/USD price chart – 1-day candles with multiple indicators – Source: TradingView
North Korea – A Growing School of Hackers
A report from the blockchain data analytics firm Chainalysis stated that North Korean hackers managed to steal around $ 400 million in crypto assets last year. According to the firm, these criminals primarily targeted investment firms and cryptocurrency exchanges.
According to officials from the US, the country’s government has been actively sponsoring a cybercrime unit since the late 1900s with reports indicating that the task force could be comprised of over 6,000 individuals whose objective is to breach private and public systems to steal money, intellectual property, and sensitive data. The program is known as “Bureau 121”.
In the case of cryptocurrencies, the group uses multiple schemes such as phishing and malware planting to obtain the private keys of “hot” wallets. Once they get access, funds are immediately transferred to wallets that are known to be operated by the North Korean government.
The report from Chainalysis also stated that North Korean hackers were trained to launder the funds they siphoned through these attacks in a systematic way. However, they don’t necessarily do it in a rush as many of the wallets involved in old-dated attacks have been inactive for years.
Axie Infinity to Keep Building After Incident
The 31-year-old co-founder of Axie Infinity, Jeff Zirlin, was scheduled to give a speech on the day that the firm officially announced the incident.
“We realized the Ronin network has been exploited for 173,000 [Ethereum] and around 25 million dollars in USDC”, the company stated in a blog post released on that day.
In an interview with CNN, Zirlin stated that users will not be able to convert AXS to ETH until the situation is appropriately addressed.
Even though users have demonstrated confidence in the developing team’s ability to sort things out and recover at least a portion of the stolen funds, it remains unclear if Axie Infinity will fully recover from this reputational and financial hit.
For now, is business as usual for Axie Infinity and its community as indicated by the many events held within the platform on the days that have followed the cyber attack.
Crypto assets are highly volatile unregulated assets. Your capital is at risk.
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