North Korea's crypto influence grows

North Korea's involvement in the cryptocurrency and DeFi sectors has been highlighted by blockchain investigator ZachXBT, who claims that several decentralised protocols are heavily reliant on transactions from the Democratic People's Republic of Korea (DPRK).

This revelation comes as part of ZachXBT's efforts to track and freeze funds from the recent Bybit hack, attributed to North Korea's Lazarus Group.

The Bybit hack, one of the largest in crypto history, involved the theft of approximately $1.46 billion, with a significant portion laundered through decentralised exchanges and other platforms.

ZachXBT noted that some decentralised protocols derive nearly 100% of their monthly volume from North Korean entities, raising concerns about the industry's ability to prevent money laundering.

ZachXBT expressed frustration with the current state of anti-money laundering (AML) measures.

"Several ‘decentralised’ protocols have recently had nearly 100% of their monthly volume/fees from the DPRK," he stated.

He also criticised centralised exchanges for their slow response times, allowing illicit funds to be laundered quickly.

The Lazarus Group, a hacking entity linked to North Korea, has been involved in numerous high-profile cyber attacks, including the "WannaCry" ransomware incident and the hacking of international banks.

Recent data from Arkham Intelligence indicates that North Korea is now the third-largest national holder of cryptocurrencies, behind the U.S. and U.K.

ZachXBT worries that the crypto industry's inability to address these issues may lead to stringent government regulations.

"This industry is unbelievably cooked when it comes to exploits/hacks. Sadly, I don’t know if the industry is going to fix this itself unless the government forcibly passes regulations that hurt our entire industry," he stated.

Experts speculate that North Korea's crypto activities are likely funding its military programs, given the country's history of using cybercrime to evade sanctions and generate revenue.

The growing relationship between North Korea and Russia, which advocates for using crypto to bypass sanctions, further complicates the situation.