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On-chain researcher tanuki42 has brought to light a significant security incident potentially affecting crypto market maker DWF Labs in September 2022. The researcher alleges that DWF Labs was the victim of a hack resulting in the loss of over $44 million, primarily in USDC and USDT stablecoins. This incident reportedly went undisclosed by the company.
Key Takeaways
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A hack of DWF Labs, resulting in over $44 million in losses, is alleged to have occurred in September 2022.
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The attack was reportedly carried out by a North Korean-affiliated threat actor known as AppleJeus.
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DWF Labs has not publicly confirmed the incident.
Details of the Alleged Hack
The alleged attack commenced on September 22, 2022, with the draining of a DWF Labs project address. The subsequent movement of funds from centralized exchanges back into the compromised wallet suggests a potential breach of private keys and account credentials. According to tanuki42, the attack spanned over five hours, during which no attempts were made by DWF Labs to halt the fund withdrawals. A further draining of assets was reportedly executed the following day, September 23.
Tracing the Stolen Funds
Following the breach, the stolen cryptocurrencies were allegedly converted to Bitcoin through the Ren Protocol bridge. While the funds remained dormant for an extended period, they have recently begun to be laundered through the crypto mixer Mixero. The methodology employed in the attack and subsequent laundering strategy has led the researcher to suspect the involvement of the North Korean hacking group AppleJeus, citing similar tactics used in previous breaches of Deribit, Tower Capital, and Radiant.
Linking the Attack to DWF Labs
Tanuki42 established the link between the compromised wallet and DWF Labs through its interaction with an address belonging to Yield Guild Games, a known collaborator of the market maker. Further analysis revealed that the alleged DWF Labs wallet also transferred funds to the treasury address of MagnifyCash (formerly NFTY Finance), a project with which DWF Labs announced a strategic partnership on the same day.
Ongoing Investigation and Concerns
Approximately $30 million of the assets linked to the attack reportedly remain untouched. Tanuki42 has enlisted the help of on-chain sleuth ZachXBT and cybersecurity firm TRM Labs to further investigate the incident. ZachXBT commented on the situation, stating, "DWF Labs hiding a $44M hack? Cannot say I’m surprised."
This alleged undisclosed hack raises significant security concerns within the cryptocurrency space, particularly regarding the transparency and response protocols of major market participants. The incident also comes to light shortly after the DeFi protocol Stream Finance suspended operations following a separate $93 million hack.
Sources
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Researcher Uncovers Undisclosed $44 Million Hack of DWF Labs, ForkLog.
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DWF Labs Allegedly Lost $44 Million in Hack Tied to North Korea’s AppleJeus, Be in Crypto.
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