The dictatorial regime of North Korea has been associated with a number of human rights violations. They have also been associated with a number of cyber-crime activities, including the massive Sony Hacks of a few years ago. The latest allegation against North Korea is that they were behind the biggest Bitcoin heist ever, as Billions of dollars worth of Bitcoins were stolen from South Korea.
South Korea’s national spy agency has claimed that North Korea has already stolen millions of dollars worth of cryptocurrency and that they are still trying to break into South Korean exchanges. No exchanges have been named so far.
‘North Korea sent emails that could hack into cryptocurrency exchanges and their customers’ private information and stole (cryptocurrency) worth billions of won,’ said Kim Byung-kee, a member of South Korea’s parliamentary intelligence committee.
This isn’t the first time that North Korea is being alleged about a cryptocurrency related crime. In the past, North Korean hackers were alleged to be behind a number of ransomware attacks. There have been a number of times when it was alleged that North Korea is running large-scale cryptocurrency mining operations. Moreover, South Korean intelligence also reports that last month’s CoinCheck hack where $530 Million worth of cryptocurrencies were stolen was also masterminded by North Korea.
On 26th of January, 2018 - Japan’s CoinCheck cryptocurrency exchange had stated that someone had broken into their cryptocurrency wallets and hacked 520 Million cryptocurrency tokens of XEM - this impacted about 260,000 users who had invested in the XEM cryptocurrency token on CoinCheck. Japan’s authorities had promised to investigate all domestic exchanges to track who may be behind it. However, it now appears that it was North Korea which was behind the attack.
North Korea reportedly has a heavy reliance on cryptocurrencies now. This is because of strict UN sanctions and trade restrictions imposed upon them. The country’s economy is in a major trouble and their cash reserves are in a state of disarray. The UN has been quite strict on North Korea as it potentially views North Korea as a destructive element which has been piling up nuclear weapons. Moreover, the North Korean human rights violations and their regime of strict control have also urged UN to take these steps.
With all sources of a foreign income banned to them, North Korea is heavily dependent on cryptocurrencies for raising money. In a report from September 2017, it was revealed that North Korea had tried to steal funds from South Korean exchanges, at least on three occasions. While two of these attacks were not successful, they were able to break through one time. In another such attack in December, the youbit cryptocurrency exchange lost 17% of its assets in the attack and had to file for bankruptcy.
With the attack at Coincheck last month, North Korea has pulled off the biggest cryptocurrency heist of all time - a theft of $530 Million, which is higher than previous highest theft - when Mt. Gox had lost $480 Million in 2014.