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Circle allegedly profiting from Lazarus Group cyberattack

GrafaGrafa2024/09/16 00:00
By:Isaac Francis

Circle is under scrutiny following allegations from blockchain investigator ZachXBT, who claims the company delayed blacklisting funds linked to the notorious North Korean Lazarus Group, potentially profiting from transactions associated with the group. 

ZachXBT, known for his investigative work in the crypto space, took to social media to criticise Circle’s handling of funds tied to the Lazarus Group, which is infamous for its involvement in multiple cyberattacks. 

He noted, "Not once have you ever blacklisted after a DeFi exploit/hack when there was ample time, while you continue to profit off the transactions."

The controversy stems from Circle’s reported four-month delay in blacklisting funds connected to Lazarus, a response time significantly longer than other stablecoin issuers like Tether, Paxos, and Techteryx. 

These companies quickly froze addresses associated with the group, which collectively hold $4.96 million in stablecoins. 

Additionally, exchanges have frozen another $1.65 million linked to the hackers, bringing the total to $6.98 million in frozen assets. 

The Lazarus Group is alleged to have laundered approximately $200 million through stablecoins such as USDT (CRYPTO:USDT) and USDC (CRYPTO:USDC) between 2020 and 2023.

The issue has intensified as stablecoin regulations and anti-money laundering measures come under increasing scrutiny. 

Circle, which presents itself as a compliant entity focused on protecting the crypto ecosystem, is facing backlash for what some see as prioritising profits over security. 

Critics argue that despite its large team, Circle lacks an adequate incident response unit for handling DeFi hacks or exploits. 

ZachXBT’s criticism also comes in the wake of a recent Lazarus Group attack on Indonesian crypto exchange Indodax, which resulted in over $20 million in losses.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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