As a seasoned analyst with over two decades of experience in cybersecurity and blockchain technology, I find myself torn between skepticism and hope in this Hyperliquid Labs (HYPE) debacle. On one hand, the claims of North Korean hackers’ involvement in whale activity on HYPE’s layer-1 protocol are intriguing, given the notorious reputation of these actors in the crypto world. On the other hand, it is crucial to remember that speculation and fact are two different things, especially when dealing with such high-stakes scenarios.
Contrary to speculations, the group responsible for the $28 billion FDV token of HYPE, Hyperliquid Labs, denies allegations that North Korean hackers breached their layer-1 protocol.
Hyperliquid Labs (HYPE) has denied any connection between whale activity and a suspected hacking scheme allegedly orchestrated by North Korean hackers. According to a post on their Discord server, no weaknesses have been disclosed by any source, and ethical hackers are encouraged to submit reports of potential bugs as part of their “generous bug bounty program.
On December 23rd, a significant amount of one million tokens was offloaded by a HYPE whale, sparking rumors that North Korean cybercriminals might have been trading on the primary blockchain layer. Seasoned security experts such as Taylor Manohan from MetaMask have suggested that these hackers could be seeking vulnerabilities within the system, possibly linked to the infamous Lazarus Group.
As a researcher examining the DPRK’s trading trajectory, it appears to be an intriguing journey filled with unique challenges and opportunities.
— Tay 💖 (@tayvano_) December 22, 2024
It appears that the data indicates wallets linked to North Korea (DPRK) conducted on-chain swaps and incurred a loss of approximately $700,000. However, when the news broke out, popular crypto figure Tayvano, also known as Manohan online, stated “North Korea doesn’t trade; they just test,” while members of the community sought explanations for this incident.
It’s been noticed that there are rumors about activities linked to supposed North Korean addresses. However, it’s important to clarify that no exploit, either from North Korea or any other source, has been discovered on Hyperliquid. All user funds are secure and accounted for. The security of our operations at Hyperliquid Labs is a top priority.
Hyperliquid Labs via Discord
Hyperliquid debacle
The matter became heated on social media, as HYPE holders bashed Manohan for spreading FUD – an acronym for “fear, uncertainty, doubt” – around Hyperliquid.
Notably, prominent figures such as Polygon‘s CISO Mudit Gupta, Coinbase director Conor Grogan, and podcaster Laura Shin have endorsed Manohan, highlighting the value in her security recommendations. Specifically, Gupta agreed with Manoha’s proposal to strengthen security by decentralizing multi-signatory permissions and addressing key vulnerabilities.
A Hyperliquid bridge is regulated by two out of four multi-signature wallets that are hot, overseen by a solitary binary. It would be more secure to raise the required number of signatures and eliminate a single point of failure rather than targeting security researchers for criticism. SEAL remains ready to assist if needed.
— Mudit Gupta (@Mudit__Gupta) December 23, 2024
This year, cybercriminals from North Korea have managed to steal approximately $2 billion in cryptocurrency from users and crypto-related platforms. The FBI previously cautioned in September that the group known as Lazarus was actively attempting to infiltrate digital asset trading markets. Over time, it is believed that North Korean hackers have stolen over $4 billion worth of cryptocurrencies.
In this setup, there are no more than four entities functioning as validators. These validators share identical codebase, which might be located together as well. This centralized infrastructure, including development tools and other resources, is managed and utilized by an undisclosed number of founders, executives, and engineers. They use the same devices to interact with these systems as they do for communication purposes.
— Tay 💖 (@tayvano_) December 23, 2024
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2024-12-23 22:06