Railgun refutes claims of North Korean laundering following price surge

Privacy exchange Railgun has refuted claims that it was used by North Korean hackers, saying the hacker group is “blocked from using the Railgun system.”

In a Tuesday post on X, Railgun said the North Korean bad actors are blocked from its project by the “Private Proofs of Innocence” system, which went live over a year ago. “Secondly, it was a mistaken, false allegation in the first place,” it added.

Railgun’s comment came in response to Wu Blockchain’s post about Lazarus Group hackers using Railgun to launder stolen assets, noting that Railgun has become an alternative to Tornado Cash. The FBI reported in January 2023 that North Korean cyber actors used Railgun on Jan. 13, 2023, to launder over $60 million worth of ether stolen during a June 2022 heist.

On Monday, Railgun’s token price jumped over 123% after Ethereum co-founder Vitalik Buterin noted the project’s privacy benefits on X. Arkham Intelligence data showed that the “vitalik.eth” address transferred 100 ETH (about $311,600) to Railgun.

“Privacy is normal,” Buterin wrote in an X post. “Railgun uses the privacy pools protocol, which makes it much harder for bad actors to join the pool without compromising users' privacy.”

Railgun is currently changing hands at $1.18 at 1:00 a.m. ET., according to CoinGecko data.

Railgun did not immediately respond to The Block’s request for comment.