The UN Security Council recently revealed in their annual report that North Korea has been using cyberattacks and blockchain technology to obtain foreign currency and evade economic sanctions, according to the Nikkei Asian Review, who obtained the panel’s report.
Prior to the council’s report, a panel of experts purportedly told the Security Council’s North Korea sanctions committee that the totalitarian dictatorship was behind the hacking of around $670 million in foreign exchange and cryptocurrency during the years of 2015-2018.
$571 Million Hacked From Asian Crypto Exchanges
While North Korea has purportedly been hacking overseas financial companies since 2015, it wasn’t until the period between January 2017 and September 2018 that North Korea made most of their money.
According to the report, the Democratic People’s Republic of Korea successfully hacked a number of Asian cryptocurrency exchanges at least 5 times, stealing an estimated total of $571 million of funds. Moreover, the hacks were carried out by a specialized North Korean government military unit.
Unfortunately, the UN panel did not name any of the affected crypto exchanges, but it can be speculated as to what exchanges they hacked. For instance, in January 2018 the Japanese cryptocurrency exchange Coincheck suffered a hack resulting in the loss of $530 million worth of NEM cryptocurrency.
Japan suffered another cyber attack in September 2018 on the crypto exchange called Zaif, which purportedly lost $60 million in the hack.
South Korea also suffered a series of hacks speculated to be from North Korea. The popular e-commerce platform Interpark had more than 10 million users’ personal information compromised in a cyber attack. The hackers then demanded a ransom of $2.7 million in exchange for returning the stolen data.
Evading Economic Sanctions
According to the UN panel, North Korea used blockchain technology to cover their tracks, and evade economic sanctions imposed by the UN.
Per the report by Nikkei Asian Review, the UN panel said:
“[Cryptocurrencies] provide the Democratic People’s Republic of Korea with more ways to evade sanctions, given that they are harder to trace, can be laundered many times and are independent from government regulation.”
As well, North Korea is accused of using the anonymity of certain cryptocurrencies to get around economic sanctions.
For instance, Marine Chain, a Hong Kong-based company that uses blockchain technology to buy and sell ships, is believed to have done business with North Korea until the company was shut down in September 2018.
It’s believed that North Korea was able to acquire substantial amounts of cryptocurrency through this business. in addition to their cyber attacks.
What do you think should be done to prevent North Korea from spending their stolen cryptocurrency funds? Do you think government agencies are tracking these stolen funds? Let us know in the comment section below.