North Korea may have been involved in Cosmos development
North Korea may have been involved in Cosmos development
The Cosmos ecosystem, a prominent blockchain network known for fostering interoperability between chains, is facing a major controversy following allegations that its Liquid Staking Module (LSM) was developed by North Korean programmers. The revelations have raised concerns about security risks and potential sanctions violations, prompting scrutiny from both the community and industry experts.
The allegations emerged when several developers and blockchain analysts suggested that individuals with ties to North Korea were involved in building components of the Cosmos LSM, a key feature enabling users to stake assets while still maintaining liquidity. The accusations have shocked the Cosmos community, with many questioning how the development process allowed such involvement to go undetected.
The involvement of North Korean developers, if confirmed, carries significant implications, given the sanctions imposed on the country by the international community. North Korea has a known history of using cyber activities and blockchain technology to bypass economic sanctions, making the allegations particularly troubling. Industry experts are concerned that this connection could expose the Cosmos ecosystem to regulatory scrutiny or lead to legal consequences for participants.
This raised concerns among investors that some of the developers may have been linked to the Lazarus Group, a cybercrime group that operated in coordination with the North Korean government.
The Cosmos team has responded to the situation by initiating an internal investigation, seeking to confirm the validity of the allegations. Several stakeholders in the community have also called for immediate security audits of the affected modules, emphasizing the need to restore trust in the platform. "We take these concerns very seriously and are committed to ensuring the safety and integrity of the Cosmos ecosystem. It isn't about their geography or ethnicity. The people who built the lsm are the world's most skilled and prolific crypto thieves," Cosmos ecosystem developer Jacob Gadikian said.
Ethan Buchman, co-founder of Cosmos, confirmed, previously the company was unaware of North Korea's contribution to LSM: “We're looking for ways to completely remove the dependence on LSM. None of us were aware of North Korean work on LSM, but we're working together to deal with it.”
The blockchain industry will be watching closely as the investigation unfolds. If the allegations prove true, Cosmos could face significant fallout, including reputational damage and potential regulatory actions. The incident also highlights the broader risks blockchain projects face when development processes lack adequate oversight and due diligence.
Informal Systems now plans to “phase out” the Cosmos LSM model and replace it with a new structure.
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As the inquiry continues, the Cosmos community is likely to implement stricter security measures and governance protocols to prevent future incidents. The controversy serves as a stark reminder of the importance of transparency and accountability in the fast-evolving world of blockchain development.
Recall that we previously reported that North Korea's Lazarus Group was linked to the $305 million Bitcoin DMM hack.
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