North Korea jails $625m as developer jailed
Less than two days after a well-known crypto developer was sentenced to more than five years in prison for teaching North Korean crypto conference attendees how to avoid sanctions, the US government has revealed that the rogue nation is behind a $625 million hack on a popular decentralized finance (DeFi) project.
Ronin Network was a cross-chain payments bridge protocol that allowed users of the best NFT game based on the Axie Infinity blockchain to exchange their crypto for the one needed for the game – and get it back later. This allowed them to avoid exchange transaction fees by locking collateral in the bridge.
Projects like the Ronin Network have been hit hard this year, with nearly all of the $1.3 billion stolen by hackers in the first quarter of 2022 alone coming from DeFi, according to blockchain intelligence firm Chainalysis.
On Thursday, April 14, the Treasury’s Office of Foreign Assets Control (OFAC) added the address of the Ethereum wallet that Ronin network thieves used to store their stolen crypto to a list of those belonging to the infamous North Korean Lazarus group. , a leader in blockchain analytics. Elliptic company said in a blog post. His flights are believed to be funding North Korea’s nuclear weapons program.
Earlier, the Lazarus Group seized 173,600 of the No. 2 cryptocurrency on March 23 – a theft that wasn’t even discovered until six days later. As of Thursday afternoon, the account still held nearly 148,000 ETH, worth $443 million. An additional $25.5 million in USDC stablecoins were also looted.
North Korean Obsession
The vast majority of funds stolen from thousands and thousands of Ronin users in the latest hack were Ethereum ether – the token Virgil Griffith spent years helping to develop before breaking the Credentials Act international emergency economies by traveling to North Korea and flouting sanctions against the thug. State.
During his April 12 sentencing hearing in New York, the former Ethereum Foundation developer told the judge, “I have been cured of my stubborn arrogance and obsession with North Korea.”
That didn’t carry much weight with the judge, especially in light of the new focus on sanctions following Russia’s invasion of Ukraine.
Noting that Griffith wrote “No penalties yay” and a smiley face on a whiteboard during his speech at the Pyongyang conference, Federal Judge P. Kevin Castel of the Southern District of New York called Griffith’s actions a “violation intentional sanctions, which aim to avoid military conflicts.
Judge Castel then sentenced Griffith to 63 months in prison.
It’s hard to imagine that knowing that the $218 million the Lazarus Group has so far managed to put up for sale has gone to fund nuclear weapons research would have helped Griffith’s case.
A personnel problem
There have been a series of scandals over the years related to crypto’s rather minimal HR standards. While Ethereum founder Vitalik Buterin wrote a letter of support during the pitch process, he noted on Twitter that while the Ethereum Foundation wasn’t on Griffith’s journey, it was a ” much inadvisable”.
The Foundation “first surrendered” to Griffith, according to prosecutors in filings. And he didn’t quit his job until his legal issues became clear.
It’s a larger problem, The New York Times said on March 2, noting that the industry has what amounts to an anonymity problem in which “investors give money to pseudonymous developers.” Venture capitalists support founders without knowing their real names.
Among others, he cited the case of the Wonderland DeFi project, which raised hundreds of millions of dollars and crashed when the treasury manager of the developing project – known only as 0xSifu – crashed. turned out to be Michael Patryn, who had been jailed for fraud in the past, the Times reported.
Really, the problem is that the willingness to work with anonymous or at least pseudonymous developers and founders is a problem rooted in the bones of crypto: after all, no one knows the true identity of Satoshi Nakamoto, who created crypto. and blockchain with his Bitcoin white paper.
Read also : PYMNTS Crypto Basics Series: Is Bitcoin Really Anonymous and How Can Law Enforcement Track It?