December 23, 2024

North Korea Credited For $1.3 Billion Crypto Theft in 2024

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North Korea Credited For $1.3 Billion Crypto Theft in 2024

North Korea Credited For $1.3 Billion Crypto Theft in 2024

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Cryptocurrency is very valuable and at this point, no matter what you think of it as a concept, its influence cannot be denied. Tokens like Bitcoin are worth tens of thousands of dollars, the public is more aware of cryptos than ever, and large institutions are slowly but surely embracing the asset class.

All this success has also made crypto a target for criminals and not a day goes by without some story of a crypto theft or hack. But one of the biggest culprits isn’t a person but a nation.

North Korea’s Crypto History

While North Korea is making headlines for its crypto-related activities in 2024, this is not its first time. As crypto has become more prominent, the controversial nation has been linked to all sorts of digital crime. Most notably, the country has been accused of sponsoring the Lazarus Group, a collective of hackers who specialize in stealing cryptocurrency. So far, billions of dollars in crypto are believed to have been stolen by the group and these funds are allegedly being used to support North Korea’s nuclear weapons program. These have mostly been done through high-profile crypto exchange hacks. 

Much of this activity, when contextualized with how crypto operates and how it has gained prominence, seems very plausible. Crypto, as we all know, can be worth a lot of money per unit and often sees the sorts of market gains that more traditional assets can only dream of. Stealing a single Bitcoin, which can be sold with less oversight than stock, can net a hacker over $100,000 in 2024, so this would be attractive to the Lazarus Group. Consumers are also using crypto tokens on a wider scale. Instead of just being an investment vehicle, crypto can also be used to do things like gambling. The fact that they are so valuable, can be transferred easily, and offer privacy has been a big draw for consumers, many of whom now choose to bet with crypto. As Amber Carlyle writes, the top crypto casinos can see transaction volumes in the millions.  

Crypto transactions cannot be reversed once initiated and are very hard to track. Further complicating matters has been the use of crypto mixing services which obscure the origin of crypto. Services like Turbo Mixer have even been sanctioned by the US government, though their use continues.

But despite the accusations and mounting evidence, the North Korean government continues to deny these claims. 

North Korea Steals Billions

A recent report from Chainalysis shines a spotlight on both the state of crypto-related crime and the extent of North Korea’s involvement. In 2024 alone, the total amount of crypto stolen worldwide was pegged as $2.2 billion. This represents a 21% increase from last year, showing that crypto crime increases alongside adoption. What is even more notable is that North Korea alone is believed to have stolen 61% of this total figure, roughly $1.3 billion. Between 2017 and 2023, the country is believed to have stolen $3 billion, showing that not only have the thefts continued but they have become more profitable. 

Also impacting the setups of these hacks were political developments. As the report points out, the activity of North Korea-linked hacking groups dropped significantly after June 2024. That month, Russian President Vladimir Putin and North Korean leader Kim Jong Un signed a mutual defence pact. Along with cooperation in defence matters, Chainalysis experts believe that Russia might have influenced North Korea to change its cyber-crime tactics. 

“Specifically, as shown in the chart below, amounts stolen by the DPRK dropped by approximately 53.73% after the summit, whereas non-DPRK amounts stolen rose by approximately 5%,” the report says.  

From the data, we can see a clear pattern of large-scale crypto projects being targeted. A single exchange, whether centralized or decentralized, can hold hundreds of millions of dollars in customer funds and so far, the North Korean hackers have successfully compromised big names like WazirX and DMM Bitcoin. Even non-Korean hackers are raking in millions by attacking crypto projects and as long as these assets remain valuable, the attacks will continue.

How the World is Responding 

Chainalysis’ report pointed out that lax security is a major factor in the success of these attacks and this has included centralized and decentralized exchanges. In that sense, developers have been encouraged to beef up their security to avoid falling victim. After all, several exchanges had to refund affected customers the money that had been lost and not everyone can afford such a hit. Investors, on their part, are advised to not store their tokens on exchanges. As convenient as it can be sometimes, they run the risk of their funds being lost if their exchange of choice is targeted and hacked.

There is also much attention on North Korea as a source of these cybercrimes. As much as it might deny any involvement, the evidence linking state-sponsored hackers to these crypto thefts is relentless. And world governments are taking action against them. Just recently, the US Treasury and the UAE government collaborated to sanction ​​Green Alpine Trading, LLC, a UAE-based company they found was helping to launder stolen crypto funds for North Korea. Two Chinese nationals were also named as part of the scheme, and this is part of a larger effort to cripple the hackers’ activities. 

Ultimately, there are two sides to this; first, mainstream institutions are investing more in crypto. With the launch of the spot ETFs in the US, for example, lots of people in high places need the crypto sector to succeed. As such, there is more pressure to stop the hacking of crypto exchanges and the losses of billions of dollars. There is also the consumer protection angle as law enforcement is more adept at spotting and prosecuting crypto-related crimes. 

And, of course, we can’t ignore the political angle to all of this. North Korea is sponsoring these groups to raise funds, both for its nuclear weapons programs and as a means of evading sanctions. Naturally, there are many world powers who would want to put a stop to this, with the crypto sector benefiting from their efforts. 

Conclusion

North Korean-backed hacker groups have been operating for years, targeting crypto establishments for political motivations. As the Chianalysis report suggests, their efforts have only grown more prolific over the years and show no signs of stopping. Luckily, efforts are also underway to trace the stolen funds, sanction the participants, and stop any future hacks from happening. This, in turn, protects crypto industry stakeholders and their funds.

author avatar
Bernard - Side-Line Staff Chief editor
Bernard Van Isacker is the Chief Editor of Side-Line Magazine. With a career spanning more than two decades, Van Isacker has established himself as a respected figure in the darkwave scene.

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