The role of cryptocurrency thefts in North Korea’s nuclear program funding - Cafeqa

The role of cryptocurrency thefts in North Korea’s nuclear program funding

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Analysts claim that hackers associated with North Korea are allegedly successfully stealing virtual currencies and are getting away with it. This has the crypto business quite worried.

Pyongyang allegedly continues to launch “malicious” cyberattacks that have cost the government almost $3 billion (€2.76 billion) between 2016 and 2023, according to a new study by a UN body established to oversee North Korea’s compliance with international sanctions.

Reportedly, the earnings have covered up to 40% of the cost of its WMD projects.

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According to experts who spoke with DW, the crypto business is “very worried” that a strong state actor is seemingly stealing virtual currencies successfully and without consequences, and that international law isn’t keeping up with the fast-paced growth in the market.

They also note that the leaders of countries like the US, Japan, and South Korea, which are particularly vulnerable to cyberattacks launched by North Korea, are now concerned with major political issues.

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against March 20, the United Nations panel issued its most recent evaluation of North Korea’s cyber operations, adding that it is looking into 58 cyber assaults against cryptocurrency-related businesses that occurred between 2017 and 2023 and that Pyongyang is believed to have been responsible.

According to the study, North Korea is still trying to defy UN sanctions and pay for the expensive development of nuclear weapons and long-range missiles by attacking financial institutions all around the globe.

Intercontinental ballistic missile test conducted by North Korea

“The malicious cyberactivities of the Democratic People’s Republic of Korea (DPRK) generate approximately 50% of its foreign currency income and are used to fund its weapons programs,” the report stated, using North Korea’s official name and citing information from an unnamed UN member state.

“A second member state reported that 40% of the weapons of mass destruction programs of the DPRK are funded by illicit cybermeans,” according to the study.

The industry has been shocked at the continuing “reach and complexity” of the crypto hacking efforts of the Lazarus Group, which is widely believed to be the cover for North Korea’s state-run hacking team, according to Aditya Das, an analyst at the cryptocurrency research firm Brave New Coin in Auckland, New Zealand.

“The scale and quantity of the virtual currency thefts tied to the Lazarus Group — $615 million (€568 million) from Ronin Network, $100 million from Horizon, $100 million from Atomic Wallet — have been unprecedented,” DW reported. “It seems that any large crypto entity managing large amounts of crypto is on their radar.”

Apart from these massive robberies, Lazarus seems to be targeting smaller organizations and people “with their wide net and repeatable attack approach,” as Das put it.

Although contract security knowledge is still scarce and costly, Das stated that decentralized application audits and standards have improved dramatically in recent years, and that deploying apps and currencies on the blockchain enables greater access to security resources.

“Another key attack vector to address is human error and phishing,” said Das.

“Lazarus is known for its social engineering and phishing campaigns and they target employees of large organizations, send them e-mails and LinkedIn messages with trapdoor attachments.”

Crypto company’s $615 million theft


In April 2022, hackers gained access to the Ronin Network using a sidechain associated with the blockchain game Axie Infinity. The firm estimated that about $615 million was lost due to falsified withdrawals. Even though bitcoin companies stressed the significance of operational security to their staff, the hackers were nevertheless successful in their assault.

The decentralized, free-flowing, worldwide character of crypto, which is appealing to consumers but makes regulation by governments difficult, also compromises the sector’s security.

“If possible, it would be good to see the actual criminals prosecuted as opposed to the applications they use,” he said. We are aware, however, of North Korea’s proficiency at denying hacking and covering its traces. For the time being, therefore, prevention is preferable than prosecution.

Das expressed his expectation that additional assaults would be equally effective, given the North’s heavy investment in its hacking teams, which provides the regime with essential revenue.

International law expert Park Jung-Won of Dankook University in South Korea said that hackers provide more than just a danger to financial institutions.

Reportedly, North Korean cyberteams routinely probe the security of South Korean institutions, including the government, banks, military contractors, and infrastructure (particularly the nuclear power industry).

“We are very familiar with the North’s illegal activities and the government and military have in recent years been paying much more attention and devoting additional resources to ensure the security of the nation,” according to him.

There are also international efforts afoot to draft regulations governing the industry on a worldwide scale, but there are significant obstacles to be surmounted first.

Cybercrime laws


“We are trying to create legislation that will fight cybertheft, cyberterrorism and other similar violations, but specific standards are difficult to achieve because they need the consensus of all the states involved,” he said. “Right now, there are lots of loopholes that bad actors, like North Korea, can take advantage of
.”

The legal expert added that the two major parties in South Korea are reluctant to be perceived to be in agreement on anything less than one month before the election, making it impossible to come to a consensus on the regulations that would assist protect the country from cyberattacks.

“We know that the North has created and trained special hacking teams that are very sophisticated and have been given the sole task of attacking us,” said Park. “We urgently need to respond to these challenges.”

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