- Blockchain investigator ZachXBT has accused Circle of delaying the blacklisting of hacked funds tied to the North Korean hacker group Lazarus.
- The funds in question, totaling $4.96 million, were eventually blacklisted by four stablecoin issuers, including Circle.
- Additional funds amounting to $1.65 million were frozen by various crypto exchanges, bringing the total to $6.98 million.
ZachXBT exposes Circle’s alleged procrastination in blacklisting Lazarus Group’s hacked crypto funds, fueling controversy in the crypto world.
Circle Accused of Delay in Blacklisting Hacked Funds
Noted blockchain investigator ZachXBT has publicly called out Circle and its CEO, Jeremy Allaire, for allegedly profiting from transactions related to the North Korean hacker group Lazarus. According to ZachXBT, Circle postponed blacklisting the problematic wallets for 4.5 months, significantly later than other leading stablecoin issuers.
Comparative Action by Other Stablecoin Issuers
While Circle is under fire, companies like Tether, Paxos, and Techteryx swiftly blacklisted two wallet addresses connected to the Lazarus Group. These wallets collectively hold $4.96 million in various stablecoins like USDT, USDC, BUSD, and TUSD. Crypto exchanges also froze an additional $1.65 million tied to the hackers, bringing the total frozen amount to $6.98 million.
Lazarus Group’s History of Crypto Exploits
The Lazarus Group has a notorious history, being linked to multiple high-profile crypto hacks. One recent exploit involved the Indonesian crypto exchange Indodax, from which over $20 million was stolen, leading to the temporary shutdown of the exchange. Despite reopening for transaction activities, the incident added more evidence to ZachXBT’s findings.
Proactive Measures by Other Stablecoin Issuers
In contrast to Circle’s alleged delays, other stablecoin issuers have shown proactive steps to curb illicit activities. For instance, Tether has partnered with Tron and TRM Labs to form the T3 Financial Crime Unit, dedicated to fighting fraud and other illegal activities involving stablecoins. This unit has already frozen over $12 million in USDT suspected of being tied to illegal activities.
Reactions and Regulatory Outlook
So far, Circle has not issued a direct response to the accusations from ZachXBT. However, the broader discourse on regulating stablecoins and enhancing anti-money laundering (AML) practices is gaining momentum. With the increasing use of digital assets for unlawful activities by state-backed groups like Lazarus, the need for robust regulatory measures is clearer than ever.
Conclusion
This controversy surrounding Circle and the timeliness of blacklisting hacked funds underscores the critical need for prompt and collaborative efforts in the crypto industry to combat illicit activities. As regulatory discussions evolve, the expectations for digital asset platforms to act swiftly against money laundering and other illegal uses will undoubtedly intensify.
