Concerns rise over North Korean hackers from Lazarus Group exploiting Ethereum (ETH) via Tornado Cash mixer. A user on the social media platform X (formerly Twitter), operating under the name “Icebergy,” claims the hackers are now transferring funds to BlackRock, the largest asset management firm. Icebergy shared an image suggesting a transaction tied to North Korean hackers transferring 1 ETH, worth around $3,270, to BlackRock for unknown reasons.
If true, this could create challenges for BlackRock. US regulators have increased scrutiny of Tornado Cash and the Lazarus Group due to potential illicit activities and violations of anti-money laundering (AML) regulations within the US.
In 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) took legal action against Tornado Cash. OFAC claimed the software allowed cybercriminals to launder over $7 billion in crypto assets since its 2019 launch.
OFAC sanctioned Tornado Cash’s wallets and smart contracts, alleging it “facilitated” money laundering for hackers supporting foreign terrorist groups. Many crypto thefts have been linked to terrorist groups.
In Feb 2023, Chainalysis reported North Korean hacking groups stole up to $2 billion in crypto in 2022, frequently using Tornado Cash to obscure transactions.
Moreover, on Mar 14, North Korean hackers believed to be part of Lazarus exploited Tornado Cash to launder around $12 million worth of stolen Ethereum.
North Korean Hackers Use Blockchain Mixers Amid Sanctions
According to blockchain analytics company Elliptic, a group believed to be the North Korean hacking collective Lazarus Group briefly used cross-chain bridges and the Bitcoin mixer Sinbad.io after sanctions hit Tornado Cash. However, authorities seized Sinbad.io in November 2023, eliminating another fund-mixing option. The group then appears to have returned to using Tornado Cash.
The report indicates the Lazarus Group transferred a relatively small amount of Ethereum (ETH) worth around $500,000 through Tornado Cash. Given the modest sum involved, the motive behind this transfer remains unclear.
Major asset manager BlackRock has not commented on the allegations. It operates within U.S. regulations and recently received SEC approval for a spot Bitcoin ETF under the ticker IBIT, highlighting its compliance efforts. Some of BlackRock’s public blockchain addresses had involvement. However, this does not necessarily indicate cooperation but potentially suggests that the alleged North Korean hackers unilaterally moved to create controversy around BlackRock’s reputation.
Meanwhile, Ethereum has rebounded 10% over the past day to reach $3511 after dipping to $3,069. However, it still carries over 6% losses for the week.
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