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Decentralized finance (DeFi) platforms are clamping down on North Korea-linked transactions as part of wider efforts to fight illicit financial flows. The action follows increasing fears about state-sponsored hacking groups using DeFi for cybercrime and money laundering.
Bybit’s LazarusBounty Program: A New Approach to Recovery
Bybit, a top crypto exchange, introduced the LazarusBounty reward program with the goal of encouraging tracking and retrieval of stolen funds traced to North Korea’s notorious Lazarus Group. The program provides a 10% reward on funds recovered, worth $140 million. To date, it has paid out $2,233,947 to 13 bounty hunters who have helped identify and freeze criminal transactions.
The Numbers Behind the Effort
While the success of the initiative cannot be denied, the amount recovered accounts for a mere 3.22% of the amount stolen—some $44.37 million. On the other hand, no less than 89.96% of assets stolen ($1.26 billion) are monitored, but it is largely beyond their reach. Another 6.80% (some $94.87 million) are marked as “Pending Response,” or more needs to be done before freezing them.
How DeFi Protocols Are Responding
DeFi platforms are being proactive by blacklisting wallet addresses that are suspected of illegal activity. Certain protocols have also implemented on-chain analytics tools that can automatically flag and stop suspicious transactions. Nevertheless, due to the decentralized nature of these systems, full enforcement is still difficult.
The Ongoing Battle Against Crypto Crime
While LazarusBounty demonstrates progress in reclaiming stolen assets, the figures highlight the vast amount still beyond recovery. The effectiveness of DeFi protocols in restricting these funds will depend on ongoing collaborations between exchanges, bounty hunters, and blockchain security firms.
As regulators continue to scrutinize DeFi’s role in financial crime, initiatives like LazarusBounty could set a precedent for future bounty-driven cybersecurity efforts in the crypto space.
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