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North Korea Enters Crypto Market By Stealing $1.7B from Exchanges

North Korean hacker syndicates are suspected of stealing $1.7B over the last five years from banks and cryptocurrency exchanges.

North Korea Enters Crypto Market By Stealing $1.7B from Exchanges
"Haters gonna hate, and ain'ters gonna ain't!" Source: Sony Pictures

According to a report from the South Korean news outlet Chosun, North Korean hacker syndicates are suspected of stealing $1.7B over the last five years.

North Korea is under heavy economic sanctions, so its ability to do business with other nations is limited. It's likely that North Korea sees crypto as a means to evade these sanctions and stimulate economic activity.

North Korea has also done well on its crypto "investments," as Bitcoin is up over 50x since they started stealing it in 2017. According to Koh Myung-hyunat at the Asan Institute for Policy Studies, "North Korea is using the stolen cryptocurrency from the perspective of long-term investment" and North Korea views crypto as "the only financial asset that can be gained while it is under tight economic sanctions."

The United States has accused North Korea of committing financial cyber crimes as early as 2016. When the US Justice Department unsealed its charges against several North Koreans with theft of fiat and crypto, it also laid out the scope of North Korea's hacking efforts.

The US believes North Korean hackers targeted banks in Malta in 2019, ATMs and crypto exchanges worldwide in 2017, an Indonesian crypto exchange in 2018, and a finance firm in New York in 2021. John C. Demers, assistant attorney general for national security said, "North Korea’s operatives, using keyboards rather than guns, stealing digital wallets of cryptocurrency instead of sacks of cash, have become the world’s leading bank robbers"

After stealing the crypto, North Korea launders it using tumblers or a "peel chain" tactic, where Bitcoin is quickly moved across hundreds or thousands of wallets. This makes it tougher to track and makes the Bitcoin less likely to be flagged as stolen.