North Korea’s Cyber Pirates: An Escalating Menace to the Cryptocurrency Realm

by | Dec 5, 2023

North Korea’s government-backed hackers have become a major concern in recent years, especially for the growing cryptocurrency industry. These hackers, using multiple names, consistently focus on cryptocurrency exchanges and financial institutions worldwide, stealing funds and causing chaos in the digital world.

The main reason behind North Korea’s cyber attacks is money. Stealing cryptocurrency has become a significant source of income for the regime, accounting for a shocking 44% of all stolen cryptocurrency in the past year. This money not only funds the country’s military ambitions but also its weapon development programs.

North Korea’s interest in cryptocurrency started during the 2017 bubble when state hackers saw the potential for financial gains and quickly shifted their focus to this growing industry. They began by targeting financial institutions through the hijacking of the SWIFT network but soon made cryptocurrency exchanges their main targets.

The highly skilled North Korean Lazarus hackers have been linked to several major crypto thefts. One notable incident involved stealing an incredible $620 million, making it the largest cryptocurrency hack ever recorded. In 2022 alone, North Korean hackers managed to steal an astonishing $1.7 billion in cryptocurrency, establishing themselves as formidable opponents.

To counter North Korea’s cyber threat, the United States Office of Foreign Assets Control (OFAC) has imposed sanctions on four North Korean entities involved in illegal IT worker schemes and cyber attacks. These actions aim to disrupt the flow of funds toward the country’s weapons programs, although the exact amount allocated to ballistic missile launches is unknown.

The cryptocurrency industry has become a prime target for North Korean-backed hackers. Their attacks not only affect exchanges but also target blockchain bridges and cross-chain networks, resulting in the theft of millions of dollars in digital assets. The hackers have successfully targeted the Harmony blockchain bridge, Nomad bridge, Qubit Finance bridge, and Ronin Network, showing their ability to penetrate even the most secure systems.

The impact of North Korea’s cyber activities goes beyond financial losses. The stolen funds disrupt stability and trust in the cryptocurrency industry, hindering its growth and discouraging potential investors. Additionally, the stolen cryptocurrency represents a significant portion of North Korea’s economy, accounting for around 5% or more of the country’s GDP. The scale and importance of these cyber attacks should not be underestimated.

In conclusion, North Korea’s government-backed hackers have firmly established themselves as a significant force in cybercrime, specifically targeting the cryptocurrency industry. Their operations make up a significant portion of all stolen cryptocurrency, posing a substantial threat to the stability and security of the digital financial ecosystem. Strong cybersecurity measures and international cooperation will be crucial in reducing the risks posed by North Korea’s hackers and protecting the future of cryptocurrencies. The industry must adapt and evolve to counter these threats, ensuring the safety of digital assets and maintaining investor trust.