Crypto Funds 50% Of North Korean Nukes: Report

Due to cryptocurrencies’ anonymous and decentralized nature, it is difficult to trace transactions or a user’s identity. According to a recent report from Wall Street Journal, North Korea allegedly employed cybercriminals to steal over $3 billion in crypto. These criminal incidents occurred in the last five years. 

This report lends credence to the arguments by crypto regulators and critics that criminal elements use crypto to fund their activities. That’s why crypto organizations have additional measures such as Know-Your-Customer (KYC) verification to safeguard users’ tokens from theft, although these systems are not fail-proof. 

North Korea And The Cybercriminal Army

According to the Wall Street Journal, North Korea used cyber criminals to steal over $3 billion in the last five years.

These funds are allegedly financing half of North Korea’s nuclear program. An accurate report on the number of weapons and their caliber is a hidden knowledge due to the nation’s secretive nature.

The U.S. believes North Korea has recruited an invisible workforce of IT gurus scattered worldwide that combine to execute these cybercrimes. Lately, the technicality of  North Korea’s cyber operations is rising alongside their evasive tactics. 

From the report, the hackers impersonate tech workers and job recruiters. One notable target was gaming firm Sky Marvis which saw around $600 million stolen in a single attack. 

Also, in 2022, a hacking organization, Lazarus, linked to North Korea by the U.S. treasury department, perpetrated a massive heist on the Ronin Network.

The Ronin Network is home to the popular blockchain game Axie Infinity. The criminals stole over $600 million worth of ETH and USDC tokens. Lazarus developed a notorious identity masterminding various hack events on several networks. 

North Korean Crypto Hack At Critical Point

According to the Korean Times, a secret group of hackers has stolen classified data from governments, academics, and financial institutions. The group known as APT43 is allegedly part of North Korean intelligence services.

In the report, the Deputy National Security Adviser for Cyber and emerging technology at the White House, Anne Neuberger, shared her thoughts on the matter. Neuberger stated that half of North Korea’s missile program funds come from cryptocurrency theft. 

She believes cryptocurrencies are tools for evading economic sanctions since transactions are end-to-end encrypted transfers and do not operate with conventional banking systems. 

Also, Vice President of Investigations at Chainalysis, Erin Plante, shared her thoughts. She believes that approximately $1.7 billion worth of cryptocurrency was lost to these hackers.

Notably, hackers stole about $1.1 billion was stolen from DeFi through smart contract exploits. DeFi hacks originate from flaws in smart contract codes executed by the DeFi protocol. These flaws enable hackers to manipulate the DeFi protocol and steal users’ assets.