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North Korean-linked hacking groups are raising concerns across both the crypto industry and traditional finance, Digital Asset co-founder and CEO Yuval Rooz said, pointing to mounting losses in decentralized finance (DeFi) and increased scrutiny from Wall Street institutions.
Rooz said that even before Kelp DAO’s $290 million hack rattled confidence in DeFi last month, the team behind Canton—a public, permissioned blockchain—had received questions from financial institutions about threats associated with the “Hermit Kingdom.” He cited a TRM Labs report stating that North Korean hackers have stolen more than $6 billion in crypto since 2017.
Rooz said Canton’s structure can make it harder for North Korean-linked groups to infiltrate projects that use built-in risk protections. Canton allows participants to implement guardrails for subnets they create or for digital assets they issue, which Rooz said institutions must ensure to prevent “bad actors” from engaging with their systems.
He also noted that DeFi attackers have evolved beyond basic phishing attempts. Instead, he said campaigns have increasingly involved months-long infiltration efforts aimed at gaining privileged access to protocols.
Since Canton debuted in 2024, some crypto purists have criticized its design, arguing it is not a “true” blockchain because participants can limit users’ control. Rooz said allegations of centralization have also emerged more broadly within DeFi.
He referenced a recent dispute in which Arbitrum’s 12-member security council moved to freeze $71 million in funds left exposed by Kelp DAO’s attackers on Ethereum’s layer-2 scaling network. The decision sparked debate over whether such actions undermine DeFi’s permissionless foundation.
“Nobody should say that that’s a bad thing,” Rooz said. “One of the things that, to me, is pretty interesting about DeFi is that people want all the freedom in the world with none of the risks.”
Rooz acknowledged that Canton participants can create environments that resemble the unrestricted access of networks like Ethereum and Solana. However, he suggested that safety parameters will likely become standard for most consumer-focused applications.
At the same time, he emphasized that projects must choose to use these features and said Canton should not be viewed as a “silver bullet” for DeFi’s problems. Still, he argued that the ability to decide who can access applications—and keep out potential threats—could be a key advantage for institutions.
Rooz said the tension between decentralization and safety is already visible in stablecoin operations. He pointed to Circle, which said it would not lock down USDC stablecoins without a court order after North Korean-linked attackers used the issuer’s infrastructure to move funds. He also cited Tether’s work with authorities to freeze funds allegedly connected to illicit finance.
Rooz said the push-pull between absolute decentralization and safety is unlikely to fade. In a landscape where a single exploit can cause major damage, he suggested that the ability to restrict access to bad actors—once controversial—may become a widely adopted standard.
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