- Lazarus Group exploits LayerZero integration to steal $290 million from Kelp DAO
- Attackers compromised servers verifying cross-chain transactions, providing false data to approve fake transfers
- LayerZero and Kelp DAO dispute blame
North Korea’s infamous state-sponsored hacking group Lazarus has done it again. He managed to take home $290 million in cryptocurrency, after reportedly operating a decentralized autonomous organization called Kelp DAO through a solution called LayerZero.
Kelp DAO is an organization that has no central management or CEO. All decisions are made collectively by members who hold governance tokens and vote on proposals. It was designed to allow users to make money from their idle crypto investments.
LayerZero Labs, on the other hand, is building infrastructure that allows different blockchains to communicate with each other. This is an essential part of the Web3 ecosystem, since different currencies operate on isolated networks. The DAO used LayerZero as a “messaging layer” between different blockchains.
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Shift the blame
The Lazarus Group apparently tricked the system by taking control of some of the servers used to verify transactions between blockchains. Then, they made the fake transactions real by feeding fake data into the system and forcing it to trust the compromised servers, allowing them to steal the funds.
After the incident, LayerZero spoke to X to explain what happened. In a detailed report that you can read here, it is basically stated that the attackers exploited the Kelp DAO configuration.
“We have conducted a comprehensive review of active integrations on the LayerZero protocol. We can confidently confirm that there is no contagion to any other assets or applications,” LayerZero said. “This incident was entirely isolated to KelpDAO’s rsETH setup as a direct result of their single DVN setup.”
Kelp DAO, on the other hand, disagrees with the assertion that the incident was solely the result of its configuration.
While both organizations shift blame, Lazarus celebrates another successful heist. The organization has for years exploited vulnerable Web3 projects, bridges and DAOs to steal funds and finance North Korea’s state apparatus and weapons programs.
Via TechCrunch
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