According to the FBI, it is clear who is behind the hack of Ronin: North Korea. The hack, which took place last month, involved over $600 million: one of the largest hacks in crypto history.
Ronin is a sidechain of Ethereum, which powers the play-to-earn game Axie Infinity. The bridge to the Ronin network will reopen once the security breach is plugged, Ronin announced. Also, Ronin has announced that all those harmed by the hack will get their money back. This is normal practice: the creators or the backers of a project do this to be able to give the project a second chance.
What is less common is that there appears to be a government behind a hack. If so, it is the first time a hackon this scale has been perpetrated by a country. Authorities have attributed many cyber attacks between 2010 and now to the hacker group nicknamed the Lazarus Group. There are strong links to the North Korean government. The FBI even goes so far as to say that Lazarus is financed by North Korea. The U.S. government disclosed the ETH address to which the money had been funneled. That will now be blacklisted on crypto exchanges.
North Korean hacks for years
According to analysis company Chainalysis, North Korea's activity has been increasing again since 2021. It used to mostly focus on hacks of crypto exchanges – these days it is mostly DeFi. The looted ETH (more than half of all loot is ETH) is then put through so-called mixers, then swapped on decentralized exchanges and sent to Asian crypto exchanges to cash in to fiat. Incidentally, much of the crypto that has been looted in recent years has still not been laundered. This, according to Chainalysis, indicates a well thought out plan and not a rush.
3 billion in hacks by 2021, mostly DeFi
According to Chainalysis research, more than 3 billion will have been hacked into crypto platforms by 2021, with the vast majority of those in DeFi. And 2022 promises to be a year of greater loot. While hacks are of course criminal, in a way they are also part of the risks of DeFi. From a glass-half-full perspective, hackers provide a stress test of protocols, making them stronger and stronger over the years.