US authorities, with help from blockchain analyst Chainalysis, have recovered $30 million worth of cryptocurrency stolen from Axie Infinity in March. It’s but a fraction of the $625 million the play-to-earn game lost to the North Korean-linked hacking unit known as the Lazarus Group, but it’s a significant achievement for law enforcement and the crypto community. Chainalysis says this is the first time that cryptocurrency stolen by a North Korean hacking group has been seized.
As the analyst explains, North Korea-linked groups typically use Tornado Cash to mix Ether, but the sanctions the US imposed on the mixer forced them to employ alternative techniques. They now use blockchain bridges to switch between different kinds of digital coins in an effort to obscure the source of their funds, and the analyst had the tools necessary to trace those cross-chain movements.
Apparently, most of the funds stolen from Axie Infinity remain in the blockchain, showing that the bad actors are having a tough time moving stolen assets around and converting them into fiat currency. Chainalysis seems confident that this won’t be the last time stolen funds would be recovered from these hacking groups.
According to Bleeping Computer, news about the fund retrieval was announced at the ongoing AxieCon event. The game’s publishers have revealed that the money authorities recovered will be gradually moved into Axie Infinity’s treasury and then back to its player community. However, it won’t be a quick process, and it could take several years to accomplish.