Hackers Strike Alex Lab

Bitcoin layer-2 developer Alex Lab faced a devastating exploit in May. The team believes the notorious Lazarus Group from North Korea is behind the attack. On June 25, Alex Lab posted on X, highlighting three wallet addresses used by hackers to drain funds from the Bitcoin-based decentralized finance (DeFi) protocol.

ZachXBT Collaboration

To uncover the culprits, Alex Lab collaborated with independent blockchain sleuth ZachXBT. Together, they compiled evidence linking the Lazarus Group to the exploit. On May 16, Alex Lab alerted users on X about the attack. The hackers targeted its BNB Smart Chain bridge, siphoning off approximately $4.3 million worth of funds.

The team assured users that the smart contracts of the Alex Protocol itself were never compromised.

Further Exploits and Frozen Funds

The attackers continued at the BNB Smart Chain bridge. They also exploited around $13.7 million of the Stacks (STX) token. Some of these funds were sent to centralized exchanges and were subsequently frozen.

On June 20, Alex Lab shared details about the attacker broadcasting more than 11,800 STX transactions. These transactions utilized several DeFi protocols and bridges, including Arkadiko, Bitflow, and Allbridge, to offramp the stolen STX.

Efforts to Recover Funds

Alex Lab revealed that hackers gained access to the team's private keys in the exploit. Despite the breach, the team confirmed that the Alex Protocol's smart contracts were never compromised.

The startup offered the attackers a 10% bounty for returning 90% of the stolen funds and promised not to pursue legal action if they complied. However, the attackers did not respond to the bounty request.

Impact on ALEX Token

The exploit has significantly impacted the price of the Bitcoin Layer-2 protocol's native ALEX token, which has dropped by 10% over the last week and 47% from the previous month.