Coinspeaker
Circle Under Fire: Accused by ZachXBT of Cashing In on Lazarus Group Hacks
Circle, the issuer behind the USDC USDC $1.00 24h volatility: -0.1% Market cap: $35.58 B Vol. 24h: $5.77 B stablecoin, is currently being criticized by ZachXBT, a popular blockchain investigator. This follows after ZachXBT laid some damning allegations against the firm, some hours ago, in a rant on the X platform.
Circle Took Forever to Blacklist Lazarus Group Addresses, Blockchain Investigator Reveals
According to the investigator, Circle took all the time in the world to blacklist funds that have already been linked to the notorious group of hackers from North Korea, the Lazarus Group. ZachXBT claimed that, while other major stablecoin issuers had done the needful as early as possible, Circle took another four months plus to blacklist addresses linked to this group.
ZachXBT’s allegations went a little further. The investigator accused Circle of intentionally delaying the decision so as to profit from transactions carried out by the group. That is, despite the fact that the Lazarus group has been implicated as being responsible for several crypto hacks and thefts in the past.
One of the most recent hacks that is linked to the group took place less than a week ago. On September 11, Indonesian crypto exchange Indodax fell victim to exploitation that saw it initially lose over $15 million within a few hours. This made the exchange immediately suspend its operations as it sought to analyze the extent of the damage and prevent further losses.
Meanwhile, it’s worth noting that ZachXBT’s criticism goes well beyond any recent incident. The investigator alleges that Circle does not have a system established that allows it to take swift actions in cases of DeFi exploits and hacks. That is, despite boasting a large number of staff. Circle lacks an incident response team to handle such issues, ZachXBT suggests.
Bad Actors Increasingly Use Stablecoins
These accusations come at a time when recent investigations have revealed a growing trend of stablecoins being used to launder stolen funds. At least, between 2020 and 2023, evidence points to the Lazarus Group laundering $200 million or thereabout from various crypto exploits. That is, using stablecoins such as USDT and USDC.
This has raised concerns about the role of stablecoins in facilitating illicit activities. It also questions the integrity of issuers and how they respond appropriately to prevent such use.
For what it’s worth, discussions around stablecoin regulation have been heating up lately. That is not to mention the ongoing efforts as regards anti-money laundering as well.
Recent updates from ZachXBT show that all four major stablecoin issuers have now blacklisted two specific addresses associated with the Lazarus Group. Although Paxos, Tether, and Techteryx were more proactive, it wasn’t until September 14 that Circle took the necessary step. That is, nearly five months later than other issuers.
With this step, all four issuers have now succeeded in freezing a total of $4.96 million. Meanwhile, there is an additional $1.65 million being held up at various exchanges. This brings the total amount frozen as a result of the investigation to $6.98 million.
Circle Under Fire: Accused by ZachXBT of Cashing In on Lazarus Group Hacks
