Key Highlights
- Digital wallets associated with North Korea’s state-sponsored Lazarus Group liquidated more than $30 million worth of Bitcoin through Hyperliquid over a three-week period
- The funds were exchanged for Ethereum and Solana before being transferred to Kraken, LBank, and KuCoin exchanges
- Payward, the parent entity of Kraken, is conducting advanced negotiations with Hyperliquid Labs to provide perpetual futures contracts to American customers
- President Trump announced that the CFTC is facilitating Hyperliquid’s entry into the United States market through compliant regulatory channels
- The platform has facilitated more than $5.19 trillion in total perpetual contract trading volume
Digital wallets traced to North Korea’s notorious Lazarus Group liquidated over $30 million in Bitcoin through the Hyperliquid platform during a three-week span, coinciding with discussions between Kraken’s parent entity and regulators about expanding the platform’s U.S. presence.
On-chain intelligence gathered from Arkham and analyzed by CoinDesk revealed that addresses connected to the government-backed hacking operation were actively channeling assets through the decentralized derivatives exchange.
Following the Bitcoin liquidations, the wallets swapped the proceeds into Ethereum and Solana tokens. These digital assets were subsequently moved to major centralized trading platforms such as Kraken, LBank, and KuCoin.
Blockchain investigator ZachXBT originally identified these suspicious wallets in 2024, with Arkham subsequently tagging them as having ties to the Lazarus operation.
According to CoinDesk’s reporting, the beneficial owners of the recipient accounts remain unidentified, and there’s no confirmation regarding whether the receiving exchanges were aware of the funds’ origins.
Exchange Statements on Compliance
Kraken emphasized that regulatory compliance forms the foundation of its business model, noting that it utilizes blockchain analytics providers to track suspicious activity. The company stated its security infrastructure is built to prevent deposits from sanctioned addresses from entering the platform.
LBank recognized the complexity of the situation, characterizing illicit fund transfers across multiple platforms, networks, and legal jurisdictions as a sector-wide challenge that requires collaborative solutions beyond any individual company’s capacity.
KuCoin indicated it couldn’t verify the alleged activity without access to the specific wallet information. The platform noted that transparent blockchain records don’t necessarily reflect enforcement measures implemented after digital assets arrive at an exchange.
Hyperliquid has not issued a statement regarding the matter.
The United States Treasury Department placed Lazarus on its sanctions list in 2019. The organization has been implicated in numerous cryptocurrency heists, most notably the $625 million breach of the Ronin Network in 2022. Data from Chainalysis indicates that crypto transactions associated with sanctioned nations surged 694% during 2025.
Hyperliquid’s architecture enables users to execute trades directly from personal cryptocurrency wallets without establishing conventional brokerage relationships or completing identity verification procedures. This decentralized model complicates regulatory enforcement of sanctions compliance at the user account tier.
This incident represents a recurring pattern for the platform. In December 2024, a security analyst from MetaMask discovered suspected North Korean-controlled wallets that had been actively trading on Hyperliquid since at least October of that year. The disclosure precipitated approximately $250 million in net withdrawals within 24 hours.
Payward Negotiates American Market Entry
Concurrently, Payward is engaged in sophisticated discussions with Hyperliquid Labs regarding the provision of specific perpetual futures products to American retail traders via Bitnomial, its CFTC-licensed derivatives division.
Bloomberg’s sources indicate that Payward has submitted a preliminary framework of the contemplated arrangement to the CFTC for consideration. Final approval from regulatory authorities remains pending. Representatives from both Payward and Hyperliquid Labs have declined to provide statements.
During an August 19 White House gathering, President Trump acknowledged these regulatory efforts, stating that the CFTC was facilitating Hyperliquid’s integration into American markets through “fully compliant and legal fashion.”
Payward completed its acquisition of Bitnomial in May for a transaction valued at up to $550 million. The purchase provided access to critical regulatory designations including a designated contract market, derivatives clearing organization, and futures commission merchant authorization. Kraken subsequently introduced regulated perpetual contracts for qualified U.S. customers in June.
Hyperliquid has facilitated over $5.19 trillion in aggregate perpetual contract volume and maintained approximately $13.3 billion in outstanding open interest as of this report.
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