USDC Issuer Called Out For Slow Response To Lazarus Group Fund Freeze

Circle is facing criticism for delaying the freeze of nearly $5 million linked to Lazarus Group, a North Korean group known for major cryptocurrency hacks. Many stablecoin issuers, including Circle, have been scrutinized after funds tied to the Lazarus Group were not promptly frozen, drawing significant backlash.

ZachXBT Gets Involved

On September 14th, blockchain analyst ZachXBT revealed that stablecoin providers such as Tether, Circle, Paxos, and Techteryx blacklisted two wallets linked to the Lazarus Group, containing around $4.96 million. However, $720,000 in DAI and $313,000 in Ethereum remain unfrozen.

This follows an investigation by ZachXBT in April, which discovered that the Lazarus Group laundered over $200 million through 25 crypto-related hacks between 2020 and 2023. He noted that $6.98 million has been frozen in total, with $1.65 million across various exchanges, though specifics were not disclosed.

Lack Of Responsibility

ZachXBT specifically criticized Circle, the issuer of USDC, for its slow response compared to other stablecoin providers, accusing the company of prioritizing profit over security. He also pointed out an inherent lack of an incident response team despite its large workforce.

Regardless, Lazarus Group continues to pose a significant threat, with major hacks including a recent $20 million attack on the Indodax exchange. It is believed the stolen funds support North Korean weapons programs. The findings by ZachXBT underscore the need for quicker action by platforms like Circle in dealing with such threats.