Lazarus Group $23M Heist Shuts UK Crypto Exchange Lykke
Lazarus Group, North Korea’s state-backed hacking unit, has been linked by Britain’s Treasury OFSI to a $22.8 million crypto heist on Lykke, a UK-registered trading platform. The breach stole Bitcoin and Ethereum funds, forcing Lykke to suspend trading, enter liquidation, and face investor lawsuits over £5.7 million in losses.
Founded in Switzerland’s crypto valley by Richard Olsen, Lykke offered zero-fee trading before the attack. The OFSI report and Israel’s Whitestream research accuse Lazarus Group of laundering stolen assets through obfuscation services. Some experts dispute the attribution, citing insufficient on-chain evidence.
Over 70 customers filed a winding-up petition, while Lykke’s parent company in Switzerland entered liquidation and its founder was declared bankrupt. The UK’s Financial Conduct Authority had warned in 2023 that Lykke was unregulated in the UK. This incident extends a global pattern of Lazarus Group crypto raids and underscores exchange security risks and regulatory scrutiny.
Bearish
The Lazarus Group’s $23M heist and the resulting shutdown of Lykke exchange undermine market confidence and highlight persistent security vulnerabilities. Similar past incidents, such as the Mt. Gox and Binance hacks, triggered short-term sell-offs in Bitcoin and Ethereum as traders reacted to exchange risks. In the short term, heightened caution may pressure digital asset prices and reduce trading volumes. Over the long term, while the broader crypto market can recover as security measures improve, this event reinforces regulatory scrutiny and may dampen investor sentiment, suggesting a bearish outlook.