🦹‍♂️ Lazarus’ latest victim?

I’m flying back to the USA after a busy, eventful week in Seoul. 

A little alpha for you: I met an individual who’s working on crypto foundations in the Cayman Islands. I mentioned a story of mine from earlier this year about whether crypto still needs nonprofit foundation arms in the current era.

His view is that crypto companies will continue to keep Cayman Islands foundations not just for tax reasons, but also because they’re afraid of the impact of a future US “regime change.” 

Meaning: Some are worried that if the Democrats come back into power, they’ll shut down or reverse any regulatory gains secured under Trump.

It’s frustrating that he may be right, even though I’m of the mind that crypto should not be politicized and should be supported by all political parties.

Blockchain payment rails can help people and businesses around the world, and at this point I don’t see it as much different than a Visa transaction in terms of legitimacy.

— Kate Irwin

Seedify says it was hit by North Korean hackers

The crypto incubator Seedify reports it’s been hacked by DPRK-affiliated threat actors. 

Seedify CEO and co-founder Levent Cem Aydan described the attack as a “bridge drain” that reportedly took place Tuesday morning. 

“Lazarus decided to take everything we built over 4.5 years in one hack,” Aydan wrote. 

The fund focuses on crypto projects across AI, gaming, NFTs and other categories, and also has NFT and IDO launchpads. 

Aydan warned traders not to use any SFUND token related-bridges while the investigation continues.

Seedify later released a statement on the incident expanding upon what it believes happened: A Lazarus hacker accessed a Seedify administrator’s wallet via the admin’s private keys, and used that to mint a large amount of SFUND tokens.

SFUND’s price is down about 40% in the past 24 hours, as of 7:45 am ET Wednesday.

“The OFT contract was compromised as a result, allowing the attacker to modify the contract settings and mint unauthorized tokens on Avalanche,” the post reads.

“This contract should not have been able to mint these tokens without any token being bridged,” Seedify’s X account continued. “We used one of the most trusted and experienced auditors in the world to review these contracts and were assured that they were secure contracts that passed audits. We will be in touch with our auditors and security experts to review the security of all of our other infrastructure.”

Seedify’s bridge is part of the LayerZero ecosystem, and CEO Bryan Pellegrino told me in a DM that the incident was “100%” not related to the LayerZero OFT standard whatsoever. He added that LayerZero is working to help Seedify where it can. 

More broadly, hacks and breaches remain a major threat to crypto — with much of that threat coming from North Korea. 

North Korean hackers have illicitly gained over $3.4 billion in crypto, with $2.4 billion of that amount swiped within the past five years. 

Some of these incidents have been staggering: In February this year, Bybit was drained for $1.5 billion, making it the largest known crypto hack ever. The 2022 BNB bridge hack ($586 million) and Ronin bridge hack (over $620 million) were also major breaches attributed to Lazarus, as was the 2023 Harmony bridge attack ($100 million).

In 2024, North Korean hackers breached over a dozen crypto companies.

Social engineering attacks and zero-day smart contract exploits are two ways hackers often gain access to victims’ funds. 

Crypto bridges are often targeted because they can offer attackers a much larger reward if successful. They can also have a larger attack surface, Quantstamp researchers explained in a 2023 report. 

The importance of crypto security tends to resurface when devastating attacks occur. Incidents like these are a reminder that accidents still happen — and no one is immune.

Crypto is changing TradFi derivatives and rate markets as we know them.

DAS: London will feature all the builders driving this change. 

Get your ticket today with promo code: DROP100 for £100 off.

📅 October 13-15 | London

Looks like SBF is going to start tweeting (through a friend) from prison. I really hope he spills some tea.

And also — it looks like Elizabeth Homes’ “gn” might be a subtweet.