coinculture.com
Blockchain investigator ZachXBT alleges that Circle, the issuer of USDC stablecoin, took over four months longer than major stablecoin companies to blacklist addresses linked to the Lazarus Group
Lazarus is known as the North Korean hacking group that has drained millions of dollars from exchanges and crypto investors.
Specifically, the investigator criticises the delay of Circle, which allowed the company to profit from transactions associated with the notorious hacking group. The accusation came as the wake of a recent hack on Indonesian crypto exchange Indodax attributed to the Lazarus Group that resulted in over $20 million loss, forcing the exchange to temporarily suspend operations.
Investigations have uncovered a troubling pattern of stablecoins being used to launder stolen cryptocurrency. Evidence indicates that between 2020 and 2023, the Lazarus Group managed to launder around $200 million from various crypto-related hacks into stablecoins like USDT and USDC. This has sparked concerns about the role stablecoins play in facilitating illegal activities and the responsibility of their issuers to prevent such misuse.
ZachXBT’s criticism goes beyond this recent incident, accusing Circle of consistently failing to act quickly in response to DeFi hacks and exploits. Despite its large workforce, Circle allegedly lacks an incident response team to address these situations effectively. These claims come as discussions around stablecoin regulation and anti-money laundering measures in the crypto industry intensify.
All four major stablecoin issuers – Paxos, Tether, Techteryx, and Circle – have since blacklisted two addresses linked to the Lazarus Group, freezing a total of $4.96 million in stablecoins such as USDT, BUSD, TUSD, and USDC. The blacklisted addresses are 0x36f2D3871edd59d5C06DB8F0b12bE928d5922A70 and 0x12ED7f6ed0491678764c2b222A58452926E44DB6.
Circle, the last to take action, blacklisted the USDC funds on September 14, 2024, nearly five months after the other issuers acted. In total, $6.98 million has been frozen, including an additional $1.65 million held at various exchanges.
ZachXBT has gained recognition for several high-profile investigations, such as exposing Martin Shkreli as the creator of TrumpCoin and linking a GCR account hack to a Solana meme coin team.