Cosmos developers are urgently working to dismantle a staking module with alleged ties to North Korean actors, following heightened security concerns.

Beyond the North Korean link, AiB (All in Bits) highlighted a critical flaw in the module’s Liquid Staking Module (LSM) design. This vulnerability allows users to evade future slashing penalties, shifting the risk onto other stakers. Although this issue surfaced during an audit, the developers did not address it, citing it as an "intentional design goal."

On October 16, Cosmos developer Jacob Gadikian posted on X (formerly Twitter) that the team has begun tracking the necessary steps to remove the problematic module from the Cosmos Hub. He further revealed that specific branches of the Cosmos SDK, marked by "-lsm" suffixes, include contributions from individuals connected to North Korean money laundering schemes, who used false identities to infiltrate the project.

In response, Cosmos developers are now advocating for a comprehensive audit of the LSM to fully assess the involvement of North Korean actors. The audit could result in the blacklisting of several individuals and entities associated with the module, including Zaki Manian, Iqlusion, and other key supporters of the project.