In an event that caught the attention of blockchain researcher Emmett Gallic, wallets previously identified as being connected to North Korea’s Lazarus Group have been moving funds.
According to the recent on-chain tracking, about $30 million worth of stolen funds were moved through Hyperliquid [HYPE] using HyperUnit.
What happened back in 2024?
Now these are not normal wallet addresses, as according to pseudonymous blockchain investigator ZachXBT, these wallets have been a part of various hacks.
Back in May 2024, he specifically identified seven Bitcoin [BTC] addresses holding about 891 BTC, worth approximately $61.8 million at the time, as being connected to the Lazarus Group.
His broader investigation traced more than $200 million in stolen cryptocurrency from 25+ hacks. The recent activity suggests that there were four outflows of Bitcoin, including 244 BTC, 262 BTC, 136 BTC, and 121 BTC.
Going forward, these Bitcoins were then moved into the Hyperliquid ecosystem and subsequently converted into Ethereum [ETH] and Solana [SOL].
Those assets were then bridged across different networks, including Ethereum, Solana, and Tron. This happened before portions were sent toward centralized exchanges such as KuCoin, LBank, and Kraken, as well as unidentified Tron-based services.
Why is this a regulatory concern?
This is sensitive because Lazarus has been sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC). As expected, this has raised questions about whether platforms have adequate systems to detect and restrict sanctioned wallets.
At the same time, U.S. President Donald Trump recently remarked that Hyperliquid is actively being considered for a compliant U.S. expansion, with CFTC Chairman Michael Selig reportedly helping lead that effort.
Trump said,
I understand that [Commodity Futures Trading Commission Chair] Mike [Selig] is also working to bring Hyperliquid into the United States in a fully compliant and legal fashion.
Needless to say, against that backdrop, the discovery of Lazarus-linked wallets moving millions through Hyperliquid could become a compliance concern. This is because Lazarus is under U.S. sanctions.
Did this affect HYPE’s price, though?
Here, while all this was happening, HYPE’s price remained relatively strong at around $83.12 after a hike of almost 60% in a month. This means that traders had not yet viewed the wallet activity as a major threat to Hyperliquid.
This further coincided with Binance recently announcing that it would gradually restrict transfers involving 16 crypto and payment platforms following recent U.S. sanctions targeting Iranian- and Russian-linked services.
Final Summary
- Wallets previously identified as being connected to North Korea’s Lazarus Group have recently been moving millions.
- ZachXBT traced more than $200 million in stolen cryptocurrency from 25+ hacks back in May 2024.
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