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 major exploit has been carried out against Kelp, a restaking protocol connected to LayerZero's cross-chain infrastructure. This suggests that North Korea-linked hackers are adapting their methods, now targeting not just vulnerabilities or stolen credentials, but also the fundamental assumptions underlying decentralized systems. The combined incidents point to a more organized effort by North Korea to hijack funds from the crypto 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 siphoned off through the Drift and Kelp exploits in just over two weeks. The Kelp breach did not involve breaking encryption but rather manipulating the data fed 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 noted. '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 setup that, while faster and simpler, removes a critical safety layer. In response, LayerZero has recommended using multiple independent verifiers to approve transactions. 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,' said David Schwed, COO of blockchain security firm SVRN. '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 impacted assets as collateral. The attack also reveals a 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 added, '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.' This means even seemingly decentralized systems can have weak points, especially in less visible layers. The shift in targeting by attackers like Lazarus towards cross-chain and restaking infrastructure, which are critical but complex and hold large amounts of value, may explain recent trends. These layers are harder to monitor and easier to misconfigure, 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 weakness but showed how exposed the ecosystem remains to familiar ones, especially when security is treated as a recommendation rather than a requirement.