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Ethereum co-founder Vitalik Buterin recently supported the cryptocurrency mixer Railgun (RAIL), which has sparked speculation about the future of the decentralized finance (DeFi) protocol, especially in light of reports linking the North Korean hacker group Lazarus Group to the illegal use of Railgun. Despite receiving significant support from Buterin, this situation has led to questions about the protocol’s future.
The Threat of Lazarus Group Surrounding Altcoin
Following Buterin’s support, the main network asset of Railgun, RAIL, saw a significant increase of over 100%, attracting attention in the cryptocurrency world. However, the altcoin is considered vulnerable to significant price fluctuations in the future due to its association with the Lazarus Group and potential regulatory impacts.
The claim that the Lazarus Group used Railgun follows a series of concerning events, including the FBI’s confirmation that the group was responsible for hacking Harmony’s crypto bridge Horizon in June 2022, resulting in a staggering loss of $99.7 million. This hack was a result of the bridge’s excessive centralization and vulnerability to social engineering tactics, which the Lazarus Group exploited to carry out this devastating attack on the crypto world.
Moreover, another hack orchestrated by the Lazarus Group targeted the Ronin cross-chain bridge in March 2022, resulting in a significant loss of $540 million. These consecutive events highlight the hacker group’s ongoing threat to DeFi infrastructure and their expertise in exploiting various platform vulnerabilities.
Could End Like Tornado Cash
Harmony attack aftermath revealed that Lazarus Group laundered the stolen funds through Tornado Cash, a decentralized Ethereum-based crypto mixer similar to Railgun. Shortly after this discovery, Tornado Cash was sanctioned by the U.S. Office of Foreign Assets Control (OFAC) in August 2022.
Now, it has been determined that the hacker group has transferred some of the stolen funds to Railgun, using the protocol as an alternative route for money laundering activities. This illegal practice, especially the association with the Lazarus Group, exposes Railgun to regulatory scrutiny and inherent risks. Some market observers warn that Railgun could meet a fate similar to Tornado Cash.
