- North Korea-linked hacks drive claims that attackers convert stolen crypto into Bitcoin reserves.
- Analyst reports ETH from DeFi exploits flows quickly into BTC through cross-chain platforms.
- Adam Back warns users about insecure DeFi protocols as debate intensifies.
Market participants are raising concerns about North Korea’s growing stash of Bitcoin, prompting a response from Adam Back.
Notably, in a tweet today, analyst Pledditor suggested that North Korea could be quietly building a large Bitcoin reserve after several major hacks. The claim followed data from Lookonchain showing that a KelpDAO hacker swapped stolen ETH tokens into Bitcoin using cross-chain platforms like THORChain.
Hacker Converts Millions to Bitcoin
Indeed, the transaction trail shows that the hacker swapped 75,701 ETH (about $175 million) into Bitcoin. This highlights concerns that attackers prefer BTC for its liquidity and resistance to censorship. Pledditor said this activity could be adding to a growing Bitcoin stash linked to North Korean groups.
Adam Back Pushes Back
Meanwhile, Bitcoin pioneer Adam Back responded, warning that users should avoid exposing funds to insecure protocols. He criticized what he described as avoidable losses tied to vulnerable DeFi platforms. Back’s comment reinforces the long-standing divide between Bitcoin maximalists and the DeFi ecosystem.
Inside the $290M KelpDAO Exploit
The controversy follows a major security breach on April 18, where attackers exploited KelpDAO’s bridge infrastructure to mint unbacked rsETH tokens. These tokens were then used as collateral on lending platforms such as Aave, allowing the attackers to borrow over 82,600 ETH.
As the collateral was effectively worthless, the system faced mounting bad debt risks. Several platforms froze activity, while liquidity rapidly drained from the ecosystem.
Data shows that around $7 billion exited Aave within 24 hours, marking one of the largest single-day outflows in DeFi history. At the same time, AAVE tokens flooded exchanges, with over 355,000 tokens, worth roughly $32 million, moving into trading platforms.
North Korea’s Crypto Heists
The incident adds to a growing list of cyberattacks attributed to North Korean groups such as the Lazarus Group. Reports indicate that in 2025 alone, these actors stole over $2 billion in crypto.
More recent attacks on platforms such as Drift Protocol and KelpDAO have raised concerns about the scale and sophistication of these operations.
Beyond the immediate losses, the incident has renewed concerns about DeFi security, risk management, and protocol weaknesses. It also highlights a familiar pattern in which hackers quickly move stolen assets, often converting them into Bitcoin. Meanwhile, the affected platforms face liquidity issues and declining user trust.
Related: North Korea’s Crypto Heist Strategy Deepens with KelpDAO Hack
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