Alex Lab Links $4M Crypto Hack to North Korean Lazarus Group

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Alex Lab, a Bitcoin layer-2 developer, has recently associated the $4 million exploit it incurred in May with the infamous Lazarus Group, a hacker collective that is believed to be associated with the North Korean government. This connection was disclosed in an X post by Alex Lab on June 25. The team identified three wallet addresses that hackers used on May 16 to siphon funds from their Bitcoin-based decentralized finance (DeFi) protocol.

Alex Lab worked in close collaboration with ZachXBT, an independent blockchain investigator, to identify fraudulent transactions and accumulate the requisite evidence.

Notably, Alex Lab collaborated closely with independent blockchain sleuth ZachXBT to trace illicit transactions and compile the necessary evidence.

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A Serious Exploit

On May 16, Alex Lab informed users that attackers had exploited its BNB Smart Chain bridge, resulting in the theft of approximately $4.3 million in funds. In addition, the hackers managed to exploit around $13.7 million worth of the Stacks token. Fortunately, some of these stolen funds were sent to centralized exchanges, where they were subsequently frozen.

The exploit involved hackers gaining access to the team’s private keys, although Alex Lab reassured users that the smart contracts of the Alex Protocol itself were never compromised. On June 20, Alex Lab provided further details, revealing that the attacker had executed more than 11,800 STX transactions. These transactions utilized several DeFi protocols and bridges, including Arkadiko, Bitflow, and Allbridge, to off-ramp the stolen STX. 

Impact on ALEX Token

Alex Lab’s native ALEX token has experienced a substantial decline in value as a result of the incident. It is currently trading at $0.07, a 10% decrease from the previous week and a 41% decrease from the last month.

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On May 29, the Alex Lab Foundation conducted an X Space to address the community’s concerns and ensure transparency. It provided a comprehensive overview of the recovery process, discussed inquiries from the community, and talked on governance measures during this session. “We are committed to restoring trust and resuming operations with enhanced security measures,” the company stated.

Interestingly, Alex Lab offered the thieves a 10% bounty in exchange for the return of 90% of the stolen assets. It promised not to pursue legal action if the funds were returned. However, the attackers did not respond to this offer.

The Path Ahead

Looking forward, the platform is actively collaborating with international law enforcement and cybersecurity experts to address the implications of this attack and recover the lost assets. Enhanced security protocols are being implemented to prevent future attacks and to regain the trust of their user base.

“We deeply regret the distress this incident has caused our community. We are fully committed to restoring the integrity of our platform and ensuring such breaches do not recur,” the team stated.

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