UK Crypto Exchange Lykke Collapses After $23M Lazarus Hack

Lykke Exchange, a UK-registered cryptocurrency platform, has been forced into liquidation after suffering a $23 million cyberattack attributed to North Korea’s Lazarus Group in June 2024 [1]. The breach, which is considered one of the most significant in the UK crypto space, led to the theft of 158 BTC and 2,161 ETH [2]. The attack caused severe financial instability, ultimately compelling the platform to halt operations by the end of 2024 [3]. In March 2025, a UK court ordered the company into liquidation following over 70 claims from users seeking compensation for lost funds [4].

The cyberattack mirrored past exploits by the Lazarus Group, such as the Ronin Bridge hack, where stolen assets are often laundered through services like Tornado Cash [5]. Despite sanctions against such services, recent legal decisions have eased restrictions, potentially increasing the risk of similar attacks. The incident has reignited discussions about the limitations of decentralized finance (DeFi) protocols in preventing large-scale breaches and the need for more robust regulatory and technological defenses [6].

Lykke’s failure to secure its systems exacerbated its regulatory issues. The UK’s Financial Conduct Authority (FCA) had previously raised concerns over Lykke’s unlicensed operations, a factor that contributed to the company’s downfall [7]. Richard Olsen, Lykke’s founder, was declared bankrupt in January 2025 and is currently under criminal investigation in Switzerland [8].

The broader crypto industry has also been impacted, with over $2.17 billion stolen from crypto services in the first half of 2025 alone [9]. This figure already exceeds the total losses recorded in 2024, underscoring a troubling trend in cybercrime. In a separate incident, ByBit recently reported a $1.4 billion loss also linked to Lazarus [9].

Industry experts emphasize the need for stronger security measures, including the adoption of non-custodial wallet solutions that give users full control over private keys [10]. Technologies like multi-party computation (MPC), which spreads private keys across multiple locations, are being proposed as viable alternatives to centralized exchanges [10]. These approaches aim to mitigate the risks of large-scale thefts and restore trust in the crypto ecosystem [11].

The collapse of Lykke highlights the growing challenges in regulating and securing the cryptocurrency sector. While authorities were able to trace the theft and identify the perpetrators, the damage to users and market confidence was significant [12]. As cybercriminal tactics evolve, so too must the defenses of exchanges and the regulatory frameworks designed to protect investors [13].

Source:

[1] Lazarus Stole $23M from Lykke Exchange Best Wallet Rises, (https://bitcoinist.com/lazarus-stole-crypto-from-lykke-best-wallet-rises/)

[2] Lazarus strikes again? $23m theft topples crypto platform, (https://crypto.news/lazarus-23m-crypto-theft-silenced-a-british-start-up/)

[3] North Korea's Lazarus Group accused of $23 million ..., (https://www.cryptonews.net/news/security/31450220/)

[4] Lazarus Group $23M Lykke Hack, (https://www.cryptowisser.com/news/lazarus-group-23-million-lykke-exchange-hack-uk-treasury)

[5] North Korean Hackers Hit UK Crypto Startup Lykke, Steals ..., (https://thecoinrise.com/north-korean-hackers-hit-uk-crypto-startup-lykke-steals-23m/)

[6] North Korean Hackers Accused of $23M Theft from UK ..., (https://blockonomi.com/north-korean-hackers-accused-of-23m-theft-from-uk-crypto-exchange-lykke/)