Cosmos ecosystem faces scrutiny over North Korean ties
The Cosmos (CRYPTO:ATOM) ecosystem is under scrutiny following allegations that part of its Liquid Staking Module (LSM) may have been developed by North Korean agents, raising significant security concerns.
An on-chain investigation revealed the possibility of North Korean involvement, attracting the FBI's attention in 2023.
Jacob Gadikian, a developer within the Cosmos ecosystem, shared insights into the investigation, stating, “It isn’t about their geography or ethnicity. The people who built the LSM are the world’s most skilled and prolific crypto thieves.”
Investor concerns escalated as speculation grew about a connection to the Lazarus Group, a notorious cybercrime organisation linked to the North Korean government, known for major crypto hacks such as the $600 million Ronin Bridge exploit.
Ethan Buchman, co-founder of Cosmos, admitted the team was previously unaware of any North Korean contributions to the LSM.
In an X post on October 18, he emphasised the urgency of audits and stated, “None of us were aware of the North Korean work on LSM, but working together to deal with it.”
Experts warn that the involvement of North Korean actors could introduce hidden vulnerabilities within the Cosmos ecosystem.
Melody Chan, research lead at Redecentralise, expressed her concerns: “The big fear is that these developers might add vulnerabilities, like backdoors or ways to hack the system.”
In light of these developments, two parallel audits are set to commence, with the first starting next week, aiming to identify and mitigate any potential risks.
Following the reports, core contributors from Informal Systems proposed a phased removal of the LSM, suggesting a new governance framework that would enhance security and stability within the Cosmos network.
At press time, the Cosmos Hub price was $4.70.
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