🧵North Korea Laundered $1 Billion in Crypto in 4 Months. How Industry Leaders Can Change Crypto Freezes and Recovery

Between February and June 2025, TraderTraitor has successfully laundered over $1B from the Bybit hack. This happened despite the best efforts by the crypto community to stop it - through efforts like a free address blacklist API, bounty program incentivizing freezes and recoveries, and 24/7 tracing by blockchain analysts.

We’ve written a statement in collaboration with @_SEAL_Org so that stakeholders and supporters in the crypto industry understand the challenges associated with (1) stopping North Korean cyber actors from stealing crypto; (2) hurdles in the recovery process; and (3) to commit to being part of the discussion going forward to overcome these challenges.

Freezing and recovering North Korean stolen funds has huge challenges: 1. They cash out by exploiting the crypto ecosystem itself. 2. They move funds—almost immediately—into the hands of primarily Chinese money launderers so the money launderers bear the risk of loss 3. They abuse jurisdictional uncertainty

Freezing funds does not mean recovering them back to the victim. Most reputable Web3 services will freeze illicit accounts when notified by trusted entities, but actual asset recovery requires formal law enforcement freeze and seizure requests, as civil court orders or voluntary requests are not generally accepted. Recovery overly relies on law enforcement because many of the crypto services used to launder stolen funds won’t cooperate with investigations into other hacked companies unless law enforcement steps in.

“At Bybit, we believe the strength of our industry lies in our ability to unite in the face of threats. The rise of sophisticated, state-sponsored cyberattacks is a wake-up call for all of us—we can no longer operate in silos when responding to these challenges,” added @benbybit, Co-founder and CEO of Bybit.

We can no longer rely solely on law enforcement to fight this global security issue. It is time to think about what we can do on a civil and voluntary basis to create risk and friction for thieves and money launderers. It is time for us to create stronger paths of recourse for those victimized.