Bitcoin layer-2 developer, Alex Lab, has expressed the belief that the $4 million exploit it experienced in May is likely connected to the notorious North Korean hacking group, Lazarus Group.
In a post on June 25, Alex Lab brought attention to three wallet addresses that the hackers used on May 16 to drain funds from the Bitcoin-based decentralized finance (DeFi) protocol. The team also revealed that they collaborated with independent blockchain investigator, ZachXBT, to gather the necessary evidence linking Lazarus to the exploit.
On May 16, Alex Lab notified users on X that attackers had exploited its BNB Smart Chain bridge, resulting in the theft of approximately $4.3 million worth of funds. The hackers also targeted around $13.7 million worth of Stacks (STX) tokens, but some of the stolen funds were sent to centralized exchanges and subsequently frozen.
On June 20, Alex Lab disclosed that the attacker had carried out over 11,800 STX transactions, using various DeFi protocols and bridges such as Arkadiko, Bitflow, and Allbridge to offload the stolen STX.
At the time, the team stated that the exploit involved the hackers gaining access to the team’s private keys. However, they assured users that the smart contracts of the Alex Protocol itself were never compromised.
In an attempt to recover the stolen funds, the team offered the attackers a 10% bounty if they returned 90% of the stolen funds. They also promised not to pursue legal action if the funds were returned. Unfortunately, the attackers did not respond to this offer.
As a result of the exploit, the price of the native ALEX token of the Bitcoin Layer-2 protocol has dropped by 10% in the past week and is down by 47% over the last month. It is currently trading at $0.07.
The decline in the price of the ALEX token has been significant, falling nearly 50% in the past month alone. This highlights the importance of understanding that ‘Bitcoin Layer 2s’ are not truly Layer 2 solutions. This realization holds significance for the cryptocurrency community.