Railgun Denies Allegations
Railgun has publicly denied any connection with the sanctioned North Korea’s Lazarus Group using its platform for illicit activities. In a social media post addressing the allegations, Railgun stated that their system rigorously prevents any sanctioned or malicious users from accessing their services, dismissing the claims as unfounded.
Speculated Connection With Sanctioned Lazarus Group
Citing an analysis published by Elliptic, Wu Blockchain posted that the North Korean hacker group Lazarus Group utilized the coin mixer to “launder more than $60 million worth of Ethereum stolen in June 2022.” According to the Elliptic report, North Korea’s Lazarus Group has reportedly shifted its laundering activities to Railgun following US sanctions on Tornado Cash.
- Elliptic’s research suggests that a significant portion of funds – estimated at around 70% – that has been sent through Railgun to date are funds from the Harmony hack.
- The analysis also stated that the substantial volume of Ethereum from the Harmony hack passing through Railgun compromised the mixer’s effectiveness.
On-chain data shows that after sending the funds through Railgun, the Lazarus Group has since deposited funds into three cryptoasset exchanges. Two, namely Binance and Huobi, have announced that they have identified, blocked, and seized a portion of the funds.
Railgun Calls Out False Allegations
“This is not true and it’s false reporting,” Railgun stated, replying to Wu Blockchain’s post. The protocol suggested that the group is blocked from accessing the functions by the “Private Proofs of Innocence” system, which was implemented over a year ago. Furthermore, it stated that the initial allegation was mistaken and unfounded.
“From 2023, all RAILGUN transactions go through a Private Proofs of Innocence check which verifies that transactions do not come from sanctioned or malicious activity,” said Wu Blockchain citing the protocol. “Any suggestion that sanctioned individuals, governments, or entities such as North Korea have used RAILGUN have no evidence & are based only on speculation,” the protocol stated.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
