KeyTakeaways:
- ZachXBT criticizes DeFi protocols for ignoring transactions linked to North Korean hackers.
- Gradual restoration of stolen funds highlights crypto ecosystem vulnerabilities.
- Bybit hack exposes critical flaws in cryptocurrency safety measures and compliance.
Blockchain investigator ZachXBT has raised issues over decentralized finance (DeFi) protocols ignoring transactions tied to North Korean hacking teams following the $1.4 billion Bybit hack. In a latest Telegram message, he criticized the trade’s failure to handle illicit actions tied to the stolen funds from the February 2025 cyberattack, which was attributed to North Korea’s Lazarus Group.
ZachXBT’s investigation into the Bybit hack revealed troubling practices amongst sure DeFi protocols. Based on his findings, a number of decentralized platforms have allegedly made practically all their month-to-month quantity or charges from transactions linked to North Korean entities.
Regardless of this, these protocols have refused to acknowledge their position in doubtlessly facilitating cash laundering, elevating questions on their dedication to compliance and safety requirements.
As ZachXBT continues to work with the LazarusBounty program to hint and get well stolen property, he has voiced frustration with the gradual response occasions from each decentralized and centralized platforms. In his Telegram post, he identified that centralized exchanges usually take hours to answer suspicious transactions, whereas illicit funds will be laundered in minutes.
His criticisms lengthen to the Know Your Transaction (KYT) methods, which he deemed “flawed and simply evaded.” Moreover, he referred to as Know Your Buyer (KYC) necessities ineffective as a consequence of frequent breaches and compromised accounts.
Progress on Freezing Stolen Funds Stays Gradual
Regardless of the continuing efforts of bounty hunters and platforms, the restoration progress stays gradual. The LazarusBounty program, which gives a reward of as much as $140 million for efficiently frozen property, has managed to freeze solely 3.22% of the stolen funds, amounting to roughly $44.37 million. Though 89.96% of the stolen property are at the moment being tracked, the remaining funds are nonetheless largely past attain.
ZachXBT’s dissatisfaction stems from the problem in changing information of stolen funds into precise freezes. Even when hackers are recognized and funds traced, the method of halting these transactions has confirmed difficult.
Bybit Hack Highlights Vulnerabilities within the Crypto Ecosystem
The Bybit hack, executed by the Lazarus Group utilizing social engineering ways, uncovered critical vulnerabilities in cryptocurrency platforms’ safety measures. The hack focused flaws within the Secure Pockets software program utilized by Bybit, manipulating the multi-signature transaction course of to redirect funds to North Korean operatives. ZachXBT’s observations underscore the technical sophistication of the hackers, who had been in a position to launder not less than $160 million throughout the first 48 hours of the assault.
This hack is a part of a broader pattern of state-sponsored cyberattacks geared toward exploiting cryptocurrency platforms to fund North Korea’s nuclear and missile applications. The Lazarus Group has been linked to a number of related operations through the years, underscoring the rising menace to the worldwide crypto ecosystem.
