According to Foresight News, All in Bits, a Cosmos ecosystem software development company, said it had discovered the reasons why the Cosmos Hub’s Liquidity Staking Module (LSM) had serious security issues, including that most of the LSM code was written by North Korean agents; LSM is not an independent module, but a set of modifications to the existing staking, allocation, and slashing modules that may affect all staked ATOMs; vulnerabilities that allow slashing circumvention still exist; 19 months of unaudited code changes; major misrepresentations by Zaki Manian and Iqlusion; and a lack of transparency in ICF, Stride Labs, and informal systems.

All in Bits recommends an immediate fix for the LSM’s major staking vulnerability; an immediate, comprehensive LSM audit; a full disclosure timeline of the North Korean involvement investigation; a blacklist of ICF-related parties; and a new audit and oversight protocol for ICF-funded projects.

Development of LSM began in 2021, initiated by the Interchain Foundation (ICF) and led by Iqlusion and Zaki Manian. As the project progressed, LSM became a major collaboration between Iqlusion and Stride Labs, with further contributions from Binary Builders and Informal Systems, which integrated it into Gaia.