Undercover Analyst Exposes Chinese Crypto Money Laundering Network

Blockchain analyst ZachXBT infiltrated a Chinese money laundering network linked to the Lazarus Group, which had laundered over $1 billion (328 billion forints) for North Korean interests. Posing as a client, ZachXBT built trust by investing 115 million forints (349,700 USDC) into the network, facilitating transactions to gather critical intelligence. The investigation focused on the aftermath of the February 2025 Bybit attack, where 1.5 billion dollars (492 billion forints) were stolen by the North Korea-affiliated “TraderTraitor” group. ZachXBT identified patterns involving 15 accounts seeking assistance with stolen funds, leading to direct contact with a key figure using the alias “Jimmy Green” on Telegram.

Through a series of transactions, ZachXBT traced funds tied to the Bybit attack, including a 12 million dollar (3.94 billion forints) cluster moved via Solana, Ethereum, and Tron networks. Jimmy Green shared Solana addresses and bridge transactions, revealing a sophisticated laundering operation. Tether later froze 442,000 USDT (145 million forints) linked to these activities. The investigation also uncovered a novel laundering method using Uniswap liquidity pools and illiquid tokens. Jimmy Green discussed past operations, including a 300,000 dollar (98 million forints) freeze from the Poloniex attack and a 3 million dollar (984 million forints) fraud-related laundering scheme tied to the sanctioned Huione Guarantee.

ZachXBT’s deep-cover operation highlights the effectiveness of independent blockchain investigations. By risking his own capital and enduring a 5% loss per transaction, he exposed critical details about North Korea’s financial operations. The analyst’s work has contributed to the freezing of over 75 million dollars (24.6 billion forints) in illicit funds since 2022, though he faces delays in sharing findings due to the sensitive nature of the cases. ZachXBT relies on donations to continue his high-risk investigations, emphasizing the importance of private sector efforts in combating crypto-related crime.