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North Korea’s Nuclear Program Partially Funded by ‘Large Scale Attacks Against Cryptocurrency Exchanges’

By NexChange
FinTech, Blockchain, Financial Services

North Korean hackers have reportedly stolen up to $2 billion to help fund the country’s nuclear program, the SCMP writes citing a report to the United Nations Security Council.

North Korea is using cyberspace “to launch increasingly sophisticated attacks to steal funds from financial institutions and cryptocurrency exchanges to generate income” in violation of sanctions.

Cryptocurrency exchanges deal in virtual money like bitcoin, Ethereum and Ripple which use a technology called blockchain. There have been some high-profile cryptocurrency exchange heists including a hack reported last month by Tokyo-based Remixpoint, which runs the BITPoint exchange, causing the loss of 3.5 billion yen, or US$32 million, worth of virtual money.

These attacks have helped the country “generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector,” the experts said.

Neighboring South Korea was the hardest hit, the SCMP wrote in a separate article. The East Asian nation reportedly suffered 10 cyberattacks while India came in second with three. Bangladesh and Chile meanwhile, are tied with two attacks each. 13 other countries have allegedly been hit, including Malaysia, Vietnam, and South Africa.

As for how the hackers typically operate:

The report cites three main ways that North Korean hackers operate: attacks through the Society for Worldwide Interbank Financial Telecommunication or SWIFT system used to transfer money between banks, “with bank employee computers and infrastructure accessed to send fraudulent messages and destroy evidence”; theft of cryptocurrency “through attacks on both exchanges and users”; and “mining of cryptocurrency as a source of funds for a professional branch of the military”.

The experts stressed that implementing these increasingly sophisticated attacks was “low risk and high yield”, often requiring just a laptop computer and internet access.

Photo: Cheongwadae / Blue House

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