North Korea Stole Funds Through Cyberattacks on Crypto Exchanges to Fund Weapons Programme: UN Report

Blockchain analysis firm Chainalysis claims North Korea launched at least seven attacks on cryptocurrency platforms in 2021.

By Shomik Sen Bhattacharjee | Updated: 7 February 2022 18:58 IST

North Korea Stole Funds Through Cyberattacks on Crypto Exchanges to Fund Weapons Programme: UN Report

Photo Credit: Pexels/ David McBee

North Korean threat actors focused on crypto exchanges in Asia, Europe, and North America

Highlights

North Korea employs money laundering process, says Chainalysis
DPRK said to steal cryptocurrencies worth $400 million in 2021
North Korea conducted nine ballistic missile launches in January

North Korea has continued to develop its nuclear and ballistic missile programmes over the past year and cyberattacks on cryptocurrency exchanges appear to have been an important revenue source for the country, according to an excerpt of a United Nations report that cites cybersecurity professionals. Investigators found that cyberattacks stole digital assets worth more than $50 million (roughly Rs. 373.5 crore) between 2020 and mid-2021 from at least three cryptocurrency exchanges in North America, Europe, and Asia.

The report was submitted by independent sanctions monitors last week to the United Nations Security Council North Korea sanctions committee, but was viewed by Reuters. The confidential report claims that there has been "a marked acceleration" of North Korea's testing and demonstration of new short-range and possibly medium-range missiles in January, "incorporating both ballistic and guidance technologies and using both solid and liquid propellants" — all majorly sourced through cyberattacks, of which, cryptocurrency exchanges have also been a key target.

The report also mentions an estimate provided by blockchain analysis company Chainalysis in its latest Crypto Crime report which states that North Korea launched at least seven attacks on cryptocurrency platforms, extorting nearly $400-million (roughly Rs. 2,990 crore) worth digital assets in 2021.

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“These attacks targeted primarily investment firms and centralized exchanges,” the firm explained in an excerpt of its 2022 Crypto Crime report. The hackers "made use of phishing lures, code exploits, malware, and advanced social engineering" to siphon funds from companies' hot wallets into the addresses controlled by the Democratic People's Republic of Korea (DPRK), Chainalysis added, elaborating, "Once North Korea gained custody of the funds, they began a careful laundering process to cover up and cash out."

"Only 20 percent of the stolen funds were Bitcoin… And for the first time ever, Ether accounted for a majority of the funds stolen at 58 percent,” mentions Chainalysis.

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“More than 65 percent of DPRK's stolen funds were laundered through mixers this year [2021], up from 42 percent in 2020 and 21 percent in 2019, suggesting that these threat actors have taken a more cautious approach with each passing year,” the firm concluded.

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