North Korea's Cryptocurrency Theft Tactics Are Evolving, with DeFi Being a Prime Target

Less than three weeks after hackers linked to North Korea used social engineering to breach the crypto trading firm Drift, another significant exploit was carried out on Kelp, a restaking protocol connected to LayerZero's cross-chain infrastructure. This suggests an evolution in the tactics employed by North Korea-linked hackers, who are no longer just exploiting bugs or stolen credentials but are now manipulating the fundamental assumptions underlying decentralized systems. The combined incidents of Drift and Kelp point to a more organized effort by North Korea to hijack funds from the cryptocurrency sector, rather than isolated breaches. According to Alexander Urbelis, Chief Information Security Officer and General Counsel at ENS Labs, 'This is not a series of incidents, it is a cadence. You cannot patch your way out of a procurement schedule.' More than $500 million was stolen across the Drift and Kelp exploits in just over two weeks. The Kelp breach did not involve breaking encryption or cracking keys; instead, attackers manipulated the data feeding into the system, forcing it to rely on compromised inputs and approve transactions that never occurred. 'The security failure is simple: a signed lie is still a lie,' Urbelis said. 'Signatures guarantee authorship; they do not guarantee truth.' This exploit highlights a configuration issue where Kelp relied on a single verifier to approve cross-chain messages, a choice that, although faster and simpler to set up, removes a critical safety layer. In response, LayerZero has recommended using multiple independent verifiers to approve transactions, akin to requiring multiple signatures on a bank transfer. However, some argue that LayerZero's default setup was to have a single verifier, and the issue lies in shipping unsafe configurations as options. 'If you've identified a configuration as unsafe, don't ship it as an option,' said David Schwed, COO of blockchain security firm SVRN. 'Security that depends on everyone reading the docs and getting it right is not realistic.' The impact of the exploit has not been limited to Kelp, as its assets are used across multiple platforms, causing problems to spread. 'These assets are a chain of IOUs,' Schwed said. 'And the chain is only as strong as the controls on each link.' When one link breaks, others are affected, turning a single exploit into a wider stress event, such as lending platforms like Aave dealing with losses after accepting the impacted assets as collateral. The attack also exposes the gap between the marketing of decentralization and its actual implementation. 'A single verifier is not decentralized,' Schwed said. 'It's a centralized decentralized verifier.' Urbelis broadened the perspective, stating, 'Decentralization is not a property a system has. It is a series of choices. And the stack is only as strong as its most centralized layer.' In practice, even seemingly decentralized systems can have weak points, particularly in less visible layers like data providers or infrastructure, which are increasingly the focus of attackers. This shift may explain why the Lazarus group has begun targeting cross-chain and restaking infrastructure, the parts of crypto that move assets between systems or allow them to be reused. These layers are critical but complex and often hold large amounts of value, making them attractive targets. As Lazarus adapts, the biggest risk may not be unknown vulnerabilities but known ones that are not fully addressed. The Kelp exploit did not introduce a new kind of weakness; it showed how exposed the ecosystem remains to familiar ones, especially when security is treated as a recommendation rather than a requirement. As attackers move faster, this gap is becoming both easier to exploit and far more expensive to ignore.