Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner break down the biggest stories in crypto.

Recapping how Bybit lost $1.5B to North Korea's Lazarus Group—how did it happen, and why did they use THORChain to launder the money?

This week on The Chopping Block, we're diving headfirst into the biggest crypto stories. We've got the fallout from Bybit's $1.5 billion loss to North Korea's Lazarus Group—how did it happen, and why did they use THORChain to launder the money? Back in the fold, Ethereum is facing an identity crisis at ETH Denver, with the Foundation's bizarre "Silviculture Society" announcement raising eyebrows across the ecosystem. And if that wasn't enough, memecoins are in freefall, with Hayden Adams admitting the game was rigged all along. It's a wild week—let's break it all down.

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Show highlights

By Bybit's $1.5B Hack: The largest crypto heist in history was executed by North Korea's Lazarus Group, exploiting Gnosis Safe's front end, not Bybit itself.

THORChain: The New Laundromat?: As Lazarus Group used THORChain to launder the stolen funds, some THORChain members expressed enthusiasm for the increased trading volume.

Memecoins Declared 'Collectibles': The SEC stated that memecoins aren't securities—precisely as the memecoin bubble bursts, with new token launches dropping 60%.

InfoWars Bought With a Memecoin?: Alex Jones's supporters utilized the Wars token to outbid The Onion for InfoWars.com in a bankruptcy auction.

The Episode

This week on The Chopping Block, we're rolling into the biggest crypto stories with Haseeb Qureshi, Managing Partner at Dragonfly; Robert Leshner, CEO & Co-founder of Superstate; Tarun Chitra, Managing Partner at Robot Ventures; and Tom Schmidt, General Partner at Dragonfly.

The DeLancey Group is hiring a blockchain developer to join its growing internal team. Apply today via email to careers@delanceygroup.com

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Biggest crypto heist in history

The past week saw the biggest crypto heist in history unfold as North Korea's Lazarus Group successfully stole $1.5 billion from Bybit. The attack targeted Gnosis Safe's front end, not Bybit itself.

"It seems like they [Lazarus Group] exploited a vulnerability in Gnosis Safe's front end to generate a malicious payload that enticed a Bybit hot wallet to approve a transaction to drain the funds," explained Mariya Tabuenek, a blockchain researcher at TRM Ingenuity. "The payload was disguised as a software update for Gnosis Safe, which is ironic considering that the safes are designed to be fully transparent and verifiable on-chain."

The incident unfolded rapidly, with the stolen funds being rapidly moved across various chains and mixed through mixers to obfuscate their origin.

"The hackers quickly transferred the stolen funds across chains, aiming to cash out in fiat as soon as possible," Tabuenek added. "The pace of the operations and the immediate cash-out intent suggest a well-coordinated and time-sensitive heist."

The theft sparked a massive discussion within the crypto community, with some members expressing amusement at the ingenuity of the hackers and others criticizing the lack of security measures.

"The good news is, they used THORChain to clean the dust and got the price moving!" one user on X (formerly Twitter) pointed out.

"Maybe if we focused less on "what will the feds do?" and more on building useful, valuable things, people would be less likely to steal $1.5B in crypto and instead be busy making NFTs or something," another user noted.

The incident also highlighted the role of privacy coins in aiding illicit activity.

"The fact that we're able to follow the funds in such detail is a testament to the transparency of the blockchain and the hard work of researchers like Mariya Tabuenek," a third user stated. "But it also shows how easily bad actors can exploit vulnerabilities in the ecosystem."

As the dust settles, the crypto community is left to ponder the implications of this massive heist and what can be done to prevent such incidents in the future.

The SEC drops cases against Consensys, Uniswap, and OpenSea

The U.S. Securities and Exchange Commission has dropped three cases that were pending against Consensys, Uniswap, and OpenSea, according to a report by Bloomberg on Thursday.

The cases were part of the SEC's broader crackdown on crypto firms earlier this year, but the agency appears to be pivoting its strategy. The agency is now focusing its efforts on a smaller number of cases, such as its case against Richard Heart, the founder of the HEX token