North Korea's Crypto 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 against Kelp, a restaking protocol integrated into LayerZero's cross-chain infrastructure. This suggests an evolution in the tactics of North Korea-linked hackers, who are no longer just looking for bugs or stolen credentials, but are exploiting fundamental assumptions built into decentralized systems. The combined incidents point to a more organized effort by North Korea to siphon funds from the crypto sector, rather than a series of isolated hacks. 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.' In simpler terms, the system checked who sent the message, not whether the message itself was correct. For security experts, this exploit is less about a new hack and more about exploiting the system's setup. 'This attack wasn’t about breaking cryptography,' said David Schwed, COO of blockchain security firm SVRN. 'It was about exploiting how the system was set up.' A key issue was a configuration choice, with Kelp relying on a single verifier to approve cross-chain messages, which is faster and simpler to set up but removes a critical safety layer. LayerZero has since recommended using multiple independent verifiers to approve transactions, similar to requiring multiple signatures on a bank transfer. However, some in the ecosystem have pushed back on this, stating that LayerZero’s default setup was to have a single verifier. 'If you’ve identified a configuration as unsafe, don’t ship it as an option,' Schwed said. 'Security that depends on everyone reading the docs and getting it right is not realistic.' The fallout has not stayed limited to Kelp, as its assets are used across multiple platforms, meaning problems can 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. In this case, lending platforms like Aave that accepted the impacted assets as collateral are now dealing with losses, turning a single exploit into a wider stress event. The attack also exposes 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 puts it more broadly: '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, this means even systems that appear decentralized can have weak points, especially in less visible layers like data providers or infrastructure. These are increasingly the focus of attackers. The shift may explain why Lazarus, a group linked to North Korea, has begun targeting cross-chain and restaking infrastructure, which are critical but complex and often sit underneath more visible applications. They also tend to hold large amounts of value, making them attractive targets. If earlier waves of crypto hacks focused on exchanges or obvious code flaws, recent activity suggests a move toward the industry’s underlying infrastructure, the systems that connect everything together but are harder to monitor and easier to misconfigure. 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; it showed how exposed the ecosystem remains to familiar ones, especially when security is treated as a recommendation rather than a requirement. And as attackers move faster, this gap is becoming both easier to exploit and far more expensive to ignore.