Suspicious $ETH Dump Raises Money Laundering Concerns

Ethereum

Suspicious $ETH Dump Raises Money Laundering Concerns

Today, two newly created wallets have sold 14,064 Ethereum ($ETH) for 27.5 million $DAI at an average price of $1,959. This has been reported by blockchain analytics firm Spot On Chain in a latest tweet. The transactions, which took place through decentralized finance (DeFi) platforms THORChain and Chainflip, have sparked suspicions of money laundering. This is because of the fresh origin of the $ETH through these protocols.

Mysterious $ETH Transactions Trigger Money Laundering Alarms

This incident comes against the backdrop of heightened scrutiny on DeFi platforms. North Korean hackers had been using platforms like THORChain and Chainflip to launder stolen funds from a massive $1.4 billion Bybit hack. The hackers, believed to be notorious Lazarus Group, have reportedly converted at least $300 million of the stolen funds into unrecoverable assets.

DeFi Protocols Struggle to Block Illicit Fund Flows

Efforts to curb such illicit activities have been underway, but they face significant challenges. Chainflip has partnered with crypto security firm Elliptic to block addresses associated with North Korea from accessing its front end. THORChain, however, operates without an official front end. Despite measures, the Lazarus Group has proven adept at bypassing restrictions by interacting directly with protocol code or using third-party front ends. This has allowed them to continue laundering substantial sums.

The implications of this incident underscore the ongoing tension within the DeFi ecosystem. While platforms like Chainflip and THORChain are taking steps to prevent illicit use, some experts warn that such measures risk undermining the core principle of permissionlessness that defines DeFi. The ability of North Korean hackers to exploit these platforms highlights the challenges of balancing openness with security in the rapidly evolving crypto landscape.