Good day everybody,

Welcome to CryptoGod-1's blog on all things crypto. Today I will be doing a quick write up on some interesting news I saw on Twitter. This relates to funds that were stolen last year on Harmony One, and how Binance and Huboi worked together to ensure that some of those funds could not be cashed out, while also retrieving some funds back in the process.

Original Hack

Last year, on the 23rd of June, it was announced by the Harmony development team that $100 million in cryptocurrency funds had been stolen from the Horizon bridge. This was devastating news at the time, with reports claiming the attacker had made use of multi-signature wallet to gain control of the bridge. While not the biggest hack in cryptocurrency, it had a damaging impact on the development of Harmony and put a doubt in the trust of the networks security. The developers had to stop the Horizon bridge to prevent further transactions from happening, although Harmony’s bridge for bitcoin was unaffected. The addresses of the culprits were posted online by Harmony, as shown below.

In the process of the hack a number of different crypto assets were stolen, including Ethereum, Binance Coin, Tether, USD Coin and Dai. These stolen tokens were then swapped for Ethereum using decentralized exchanges, which is often a commonly seen technique with these hacks. To add further insult to injury, there had been worries in the space regarding the Horzion bridge as it relied upon a multisignature, or “multisig,” wallet that required just two signatures to initiate transactions.

As noted above this was far from the biggest hack in crypto, let alone even in 2022. Prior to this hack, in March of the same year $600 million were stolen from the Ronin Network, an Ethereum-based sidechain made for the popular play-to-earn game Axie Infinity. It was later confirmed by the U.S. officials that the hack was linked to the North Korean state-backed hacking group Lazarus, who happen to be the same one who ended up hacking Harmony.

The Lazarus Group

While it has never officially proven, the North Korean government is suspected to be behind the group known as Lazarus. Experts believe the group was established and operate under the financial support and requests of the North Korean government, with the group made up of an unknown number of individuals. They are a group of cyber hackers, known for committing a variety of cyber attacks via a wide array of methods and have been known to not only commit an operation on cryptocurrencies, but also having attacked:

• "Operation Troy" - 2009 to 2012 - cyber-espionage campaign that used multiple unsophisticated DDoS attacks on the South Korean government.

• "Dark Seoul" - 2013 - wiper attack that targeted three South Korean broadcast companies, financial institutes, and an ISP.

• "Sony Pictures" - 2014 - stole confidential information and even leaked unreleased movies.

• "World Banks" - 2015 to 2016 - $12 million from the Banco del Austro in Ecuador, $1 million from Tien Phong Bank in Vietnam, $81 million from Bangladesh Bank.

• "WannaCry Ransomware" - 2017 - 200,000 computers in a massive ransomware cyberattack on 150 countries across the globe from the NHS in Britain, to Boeing, and Universities in China.

To date the group is known to have been linked to several large crypto heists totalling more than $2 billion.

The groups latest attention has been focused on cryptocurrencies, potentially for the ease of use in transferring the funds across borders. In the Tweet below, onchain researcher Zachxbt traced the funds which had been stolen in the Horizon Bridge attack as they began to move 206 days after the hack. Roughly 41 thousand Eth (worth about $63.2 million at current exchange rates) was being transferred. The funds were were moved through Railgun ( smart contract privacy platform that uses zero-knowledge proofs to obfuscate transactions) after moving through the anonymous and famed Tornado Cash, before finally depositing the coins onto three different exchanges. These exchanges included OKEx, Huobi, and Binance. This was all achieved by moving the funds through a combined total of more than 350 wallet addresses. 

Binance and Huboi

While generally the group have been very nifty at moving their illicit cryptocurrencies around and ensuring any crypto placed on an exchange does not remain there for long, this time they were not so lucky. Both Huobi and Binance had frozen some of the Ethereum which had been sent to the exchanges, which is a positive move in the ongoing fight against hacking and money laundering in the cryptocurrency industry. 

Binance is clearly actively monitoring any suspicious activity and ready to enact preventative measures as soon as any "red flagged" crypto appears on its exchange. They were also in a position to assist another exchange, Huobi, to ensure that the stolen funds were also frozen on their exchange and this resulted in a total of 124 Bitcoin (worth about $2.6 million at current exchange rates) being recovered. With the crypto community shaken from the hacks and collapses in 2022, it is nice to see a positive sign of cooperation between exchanges to work against scammers and exploiters trying to cash out their ill-gotten goods.

While is is a mere drop in the ocean compared to the overall staggering amounts which has been scammed and stolen in the crypto space, it is always a positive sign to see exchanges having an impact on stopping the criminals being able to cash out. The authorities will be involved with determining the outcome of what happens with the seized Bitcoin, and while this wont put an end to the scams and crimes, it might make the likes of Lazarus think twice before depositing their crypto on a CEX again. For now the crypto space is enjoying the mini bull run which has been happening over the previous week or so, but the powers above will hopefully take note of as they look to impose their regulations on the space. Crypto can manage itself and if alert and aware, can deter the bad actors in the space.

Have a great day.

Peace. CryptoGod-1.

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