The Strategist

North Korean hackers are robbing crypto-currency exchanges

12/14/2017 - 11:51

North Korean hackers aimed at Bitcoin and other digital tokens. Sanctions, as well as a rapid rise in the price of Bitcoin, led to the fact that cybercrime in North Korea switched from state institutions to crypto-currency exchanges.

(stephan) via flickr
(stephan) via flickr
Companies specializing in cyber security are noting North Korean hackers’ attempts to steal crypto currency. "The fact is that North Korea has repeatedly attacked virtual crypto-currency exchanges around the world. We do not know how much they managed to steal, but the police confirmed attempts of hacker attacks from the DPRK," said Lee Dong-hyun, director of the state agency for security and cooperation in South Korea.

The fact that the country was interested in "attracting" virtual currencies is confirmed by CNN and Bryce Boland, senior technical director of the American company FireEye, dealing with cybersecurity.

The reason for the intensification of attacks on financial institutions is the DPRK’s desperate situation in the wake of the tightening of sanctions, which are constantly reinforced by the Trump administration. Therefore, the DPRK's cyber attacks on crypto-currency infrastructure will intensify, experts say.

According to the September report of FireEye, hackers from North Korea managed to break the English-language news site about Bitcoin and collect crypto-currency payments of the victims of the WannaCry virus. In addition, they increased the number of attacks on the largest South Korean crypto-exchange sites.

According to FireEye employee Luke McNamara, the obvious interest to crypto-currencies comes against the background of their popularity and rising prices, as well as due to the lack of state control and anonymity.

He noted that the new UN sanctions will lead to a reduction in exports of textiles from the country by 90%, which will limit the ability of the DPRK to acquire a hard currency. This is a motivator for this kind of activity, since hacker attacks are a very cheap solution for getting cash.

FireEye confirmed at least three attacks by hackers from the DPRK since early 2017. The company suspects them of a May attack on the South Korean stock exchange Yapizon, which resulted in 3816 BTC stolen.

However, according to President of the research company Blockchain Intelligence Group, Bitcoin is losing popularity as the main means of paying for criminal acts and is increasingly being used for illegal transactions.

Over the past year, the number of illegal Bitcoin transactions in the darknet has decreased to 20%. Prior to this, the first crypto currency was used in about 50% of illegal transactions. Instead of bitcoin, the criminals switched to Montero and Ethereum.

According to the analytical company Chainalysis, in 2017, the amount of funds in the currency of the Ethereum system, received as a result of illegal operations in a darknet, was $ 225 million. Chainalysis co-founder Jonathan Levin says that the recent successful actions of law enforcement agencies "created a gap in trust" in the markets, where often illegal transactions are carried out using crypto-currency.

Bitcoin is being discarded because information about transactions is publicly available. Users should also have a public address to receive Bitcoin payments. As a result, intelligence agencies can monitor the movement of funds and stop criminal attempts to withdraw them through such regulated organizations as exchanges or banks.

Therefore, criminals gradually began to conclude that the use of Bitcoins, initially seemingly anonymous, can often create too much problems.