According to Yuval Rooz, co-founder and CEO of Digital Asset, fears of cyber threats from North Korea-linked hackers have heightened across both the cryptocurrency world and Wall Street. This concern follows Kelp DAO’s $290 million hack, which shook confidence in decentralized finance (DeFi), as highlighted by Rooz during a conversation with Decrypt. Prior to this incident, financial institutions were already probing into Canton—a public, permissioned blockchain—regarding potential threats from North Korea. Since 2017, these hackers have reportedly stolen over $6 billion in cryptocurrency, according to TRM Labs.
Rooz emphasized the importance of ensuring that bad actors cannot compromise systems, noting it as a fiduciary responsibility akin to traditional organizations. He expressed confidence that North Korean hackers would find it challenging to operate within Canton’s ecosystem due to its customizable guardrails for subnets and digital assets issued on the network. Despite their evolution from basic phishing schemes to sophisticated infiltration campaigns targeting DeFi protocols, these groups are unlikely to succeed in Canton.
Canton, launched in 2024, faced criticism from crypto enthusiasts who argue it isn’t a ‘true’ blockchain because of its participant-controlled user restrictions. However, recent debates within DeFi have also raised concerns about centralization. An example is the decision by Arbitrum’s security council to freeze $71 million in funds exposed on Ethereum’s Layer-2 network after Kelp DAO’s breach, sparking discussions over whether this contradicted DeFi’s permissionless nature.
“Nobody should view that negatively,” Rooz commented, noting the paradox where people desire freedom without associated risks. While Canton participants can mimic the open access seen on networks like Ethereum and Solana, Rooz believes safety measures will become standard for consumer-focused applications.
He observed this trend with stablecoin issuers such as Tether and Circle. Following an incident where North Korean-linked attackers manipulated USDC funds via Circle’s infrastructure, Circle stated it wouldn’t freeze assets without a court mandate, while Tether collaborated with authorities to immobilize suspected illicit funds.
Rooz suggests the ongoing debate between absolute decentralization and security will persist. In a landscape where a single breach can cause significant disruption, he predicts that the ability to neutralize bad actors might transition from controversial to standard practice.