Lazarus Group Driving Increased Activity as Crypto Laundering Sets New Record at $7 Billion

by | Oct 13, 2023

A new report on crypto laundering finds the total amount being washed via cross-chain transactions has made another massive jump of nearly $3 billion over the last year, now at $7 billion. While it is far from the only contributor, North Korea’s Lazarus hacking group is the biggest single driver with nearly a billion dollars of movement of stolen crypto to its name during this time.

Crypto theft is substantially up in general, but the amount of investment scams and Ponzi schemes has nearly tripled despite a general post-pandemic cooldown in the markets. Elliptic anticipates that crypto laundering will continue to grow into 2025, hitting $10.5 billion by then.

Lazarus group at the center of the crypto theft world

The Lazarus group is worth looking at first, as the state-backed hacking squad remains the biggest individual player in the worlds of crypto laundering and theft from decentralized finance platforms. The group is more slippery than ever, having diversified to over 80 assets that it moves across 26 different blockchains.

The group has regularly stolen hundreds of millions in crypto each year since at least 2016, but has been hitting new heights as of late. It will likely not top the banner year it had in 2022, with about $1.7 billion in theft from defi exchanges, but it is likely to take about half a billion dollars in 2023.

One of the Lazarus group hallmarks during this spree has been to target developers as the initial point of compromise, looking to obtain their privileged access to defi platforms. This has involved some very elaborate social engineering, in at least two cases stringing a target along with a fake job offer that involved remote interviews.

The group’s sophisticated crypto laundering practices then quickly make the funds available for use by the North Korean regime. This has left Lazarus group in the odd position of robbing defi while also relying on defi to cash its money out, as the group essentially abandoned centralized exchanges about two years ago when law enforcement heat was turned up.

Spikes in crypto laundering expected to continue

Crypto laundering is currently outpacing Elliptic’s growth predictions, which last year put 2023’s total at just $6.5 billion. The $7 billion number comes with nearly three months left to go in the year.

Many cyber criminals are following the Lazarus group example, focusing on broadly diversifying their crypto laundering practices and jumping between decentralized cross-chain exchanges and asset types as much as possible to throw off pursuit. They are also moving away from Bitcoin, taking up Monero and other privacy coins that inherently offer more resistance to scrutiny. Continued growth is anticipated because blockchain analytics techniques are simply not keeping pace with the new moves that criminals are making.

And though Tornado Cash continues to make the news periodically, since mid-2022 cyber criminals have shown an increasing preference for cross-chain bridges and coin swap services as a first stop for crypto laundering, rather than mixing services (which are broadly being sanctioned).

Recent Posts

How can we help?

8 + 14 =

× How can I help you?