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 crypto trading firm Drift, another major exploit was carried out on Kelp, a restaking protocol connected to LayerZero's cross-chain infrastructure. This suggests an evolution in the tactics used by North Korea-linked hackers, who are no longer just looking for vulnerabilities or stolen credentials, but are also exploiting the fundamental assumptions built into decentralized systems. The combined incidents point to a more organized effort by North Korea to hijack funds from the crypto sector. 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 involved manipulating the data fed into the system, forcing it to rely on compromised inputs and approve transactions that never actually occurred. As Urbelis noted, 'The security failure is simple: a signed lie is still a lie. Signatures guarantee authorship; they do not guarantee truth.' The system checked who sent the message, not whether the message itself was correct. This exploit highlights the issue of exploiting how the system was set up rather than breaking cryptography. A key problem was the configuration choice to rely on a single verifier to approve cross-chain messages, which removed a critical safety layer. In response, LayerZero has recommended using multiple independent verifiers to approve transactions. The fallout has extended beyond Kelp, affecting lending platforms like Aave that accepted the impacted assets as collateral, turning a single exploit into a wider stress event. The attack also exposes a gap between the marketing of decentralization and its actual implementation. As David Schwed, COO of blockchain security firm SVRN, said, 'A single verifier is not decentralized. 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.' The shift in targeting by attackers like Lazarus towards cross-chain and restaking infrastructure, which are critical but complex and often hold large amounts of value, may explain the recent focus on these areas. As Lazarus continues to adapt, 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 but showed how exposed the ecosystem remains to familiar ones, especially when security is treated as a recommendation rather than a requirement.