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"I rob banks because that's where the money is."

— Willie Sutton (attributed)

Crypto is the best money to steal

North Korea liberated $1.4 billion of ETH from the crypto exchange Bybit on Friday — "the biggest crypto heist of all time," as it was widely declared.

But the headlines are underselling it: North Korea’s heist is the largest of any kind.

The previous record was the $1.04 billion in physical cash (US dollars and euros) that Qusay Hussein removed from the Central Bank of Iraq in 2003.

That may not count as much of a "heist," however, since Qusay needed only a note from his dad, Sadaam, to carry it out (and the money might even have come from his dad’s personal account).

The next largest (non-crypto) heist occurred in 1990 when two men disguised as Boston police officers walked out of the Isabella Stewart Gardner Museum with $500 million worth of paintings, including works by Rembrandt, Vermeer, Manet and Degas (the men in blue had a suspiciously discerning eye).

But that one might not count either because stolen art typically fetches only about 10% of what it would sell for at Sotheby's — and the works stolen in Boston may have been too high profile to sell at all, even. (They have never resurfaced.)

The heist most comparable to this weekend’s might therefore be the next largest: The Lufthansa heist of 1978 (made famous by the movie Goodfellas), in which mobsters made off with $5 million in cash and $900,000 worth of jewelry.

Adjusted for inflation, that’s about $29 million — a nice payday, for sure, but 48x smaller than North Korea’s latest crypto caper.

With that in mind, I think we can say that crypto is now, by a wide margin, the very best money to steal.

Crypto is also, however, notoriously the worst money to spend. 

To buy anything with crypto (even legally), you almost always have to off-ramp it to fiat, which generally requires having an account at a centralized exchange.

That account will be KYC’d and that should, in theory, make it difficult for criminal actors like North Korea’s Lazarus to off-ramp their ill-gotten gains in any great size. 

In practice, however, this does not appear to slow them down much, because even $1.4 billion is only a small fraction of what’s been laundered through crypto each year. 

"Every month, billions of dollars flow through the crypto ecosystem from illicit wallets to conversion services," Chainalysis explained in the 2024 edition of its definitive report on crypto and money laundering. 

(Note: Chainalysis CEO Jonathan Levin — who warned as recently as two weeks ago that hackers like The Lazarus Group were increasingly targeting crypto exchanges — will be a featured speaker at DAS NYC.)

These conversion services include centralized exchanges, peer-to-peer exchanges, crypto mixers, cross-chain bridges, gambling sites, crypto ATMs and even memecoins.

Crypto ATMs don’t usually keep $1.4 billion of cash on hand, so I’m sure it will take North Korea some amount of time to fully launder its heist.

But it’s off to a good start: In just the first 24 hours after the exploit, North Korea muddied the waters by disbursing the stolen crypto among thousands of addresses, laundering nearly 20,000 ETH through eXch.cx (a centralized (!) mixer incorporated in Belize), and swapping additional ETH for BTC via Chainflip (a decentralized, cross-chain exchange).

Its next step will be even easier because there are plenty of services willing to turn that laundered crypto into fiat.

The crypto compliance firm Elliptic estimates, for example, that just one money laundering platform ​​— Huione Guarantee — has processed $89 billion of crypto assets to date. 

Huione "has recently launched a range of crypto-related products," Elliptic reports — including its own stablecoin! 

Per CoinGecko, the Huione stablecoin (USDH) appears to trade about $0.03 below its $1 peg, which might be a fair measure of just how easy it is to launder crypto.

It suggests that if North Korea were to use its illicit gains to buy, say, munitions from Russia, it might have to take a haircut of just 3% to the market value of its stolen crypto.

If it paid for those munitions with stolen Rembrandts and Vermeers, by contrast, it’d take a 90% haircut to market value (at least). 

The difference between 3% and 90% may give us some idea of how much easier it is to launder stolen crypto than it is stolen paintings.

It’s often said that crypto is the worst money to steal because blockchains are transparent and transactions can be traced until they are off-ramped (at which point the holder will have to identify themselves). 

But revealed preferences among criminals tell a different story.

Off-ramping illicit funds out of crypto has become so easy that stolen fiat is increasingly being on-ramped into crypto — because it’s so much easier to launder it there.

"The growing ubiquity of crypto," Chainalysis wrote in its 2024 report, "has made it a tool for laundering proceeds from various off-chain crimes, such as narcotics trafficking and fraud."

That appears to make crypto not just the easiest money to steal, but the easiest money to spend after it’s been stolen.

North Korea is robbing crypto because that’s where the (easy) money is.

— Byron Gilliam

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Are We Still in a Bull Market?

Get caught up on how to trade the current market chop. Join the hosts for a deep dive into Trump’s market impact, what's next for BTC and the altcoin unlocks in 2025.

Listen to 1000x on Spotify, Apple Podcasts or YouTube.

With capital rotating, regulation evolving, and liquidity shifting, the smartest players are already adjusting.

• Paul Brody (EY) on where enterprises are deploying blockchain beyond the headlines.

• Ambre Soubiran (Kaiko) on the market trends that funds are acting on before retail catches up.

• Jake Chervinsky (Variant) on the legal shifts that could create—or kill—new opportunities.

• Rob Hadick (Dragonfly) on the allocation strategies driving institutional plays this year.

Some will watch. Others will act. Which side are you on?

📅 March 18-20 | NYC