North Korean Hackers Move $38 Million in 7 Hours, Putting Relay Security Controls Under Scrutiny

Questions are mounting over the effectiveness of anti-money-laundering safeguards after North Korean hackers moved a large amount of crypto through a cross-chain protocol in a matter of hours.

Wu Blockchain reported on Nov. 1 that on-chain analyst Specter said North Korean hackers moved about $38 million worth of crypto through Relay Protocol over roughly seven hours. The transfers were still ongoing when the analysis was made public.

Relay Protocol is a cross-chain bridge and interoperability protocol that supports asset transfers across different blockchains. Users can move assets across multiple chains through the protocol.

The issue is that Relay has said it operates a Know Your Transaction, or KYT, monitoring system, yet it failed to block the North Korean hackers' transfers.

Specter added that moving such a large amount in that time frame would have been more difficult if the hackers had used THORChain. That has raised fresh questions about whether Relay's anti-money-laundering and risk-management systems are functioning adequately.

Relay has not provided a detailed explanation, and it was not clear whether it had taken any additional action on the transactions. The case is again drawing attention to how cross-chain protocols monitor transactions and block illicit fund flows.