North Korean hackers might have been behind Coincheck's $530 million heist in 2017, according to a report published last Tuesday. It might point to other motivations behind South Korea's crackdown on the local coin trade.
According to Reuters, South Korean intelligence uncovered links, but could not offer definitive proof. Coincheck reported in January the theft of $530 million (58 billion yen) worth of NEM coins. Reuters cited anonymous sources for the report.
This is not the first time Pyongyang finds itself in crypto headlines. South Korean member of Parliament Kim Byung-kee accused the North of stealing billions of Won worth of virtual currencies last year. Kim sits on the parliament's intelligence committee. In January, cybersecurity firm Recorded Future reported that North Korea launched a late 2017 phishing campaign against the South.
Japan is an oasis for bitcoin and altcoins as compared to South Korea, but Tokyo moved last week to investigate flaws in Coincheck's system. Seoul started implementing stricter regulations at the turn of the year, igniting rumors of a ban and causing prices to decline. Justice Minister Park Sang-ki indeed told reporters he wanted blanket legislation in mid-January.
Korea clarified its intentions over the last month, but not before raiding Bithumb and Coinone over tax concerns. Markups also raised hackles, so much so they persuaded Coinmarketcap to briefly drop Korean data from its price calculations.
Despite disquietude over fraud and taxes, Seoul might be more concerned over North Korea. As the crypto craze continues, there might be legitimate fear that Pyongyang could damage the finances of South Koreans exposed on poorly protected exchanges. The North used hackers to steel $7 million from Bithumb in February 2017. In December, Pyongyang probably masterminded the raid that robbed 17% of assets traded on YouBit. North Korea had targeted the same exchange in April.
Capable of it or not, why would the North make it a policy to nab vulnerable crypto funds from its neighbors? Simply stated, North Korea's economy is in tatters. Isolated and unproductive, the regime has built a sophisticated hacking operation in its intelligence bureaus.
Intelligence agencies and private security firms have linked hacker groups Lazarus, Bluenoroff, and Andariel to Northern operations. While known for stealing defense plans and Sony's emails, the hacks are more and more honed on money. The latter group started hacking South Korean ATMs in 2016. North Korean hackers also hit a Bangladeshi bank that year for $81 million. However, the vulnerability of cryptocurrency in a heavily unregulated environment provides major opportunities to grab quick cash.
A September report by Fireeye tallied at least six incidents where North Korean hackers went after South Korean targets.
“The spearphishing we have observed in these cases often targets personal email accounts of employees at digital currency exchanges, frequently using tax-themed lures and deploying malware,” Fireeye's report stated.
In May 2017, North Korea anonymously released the WannaCry ransomware cryptowork on Western users, demanding $300 in BTC before unlocking sensitive files.
Cryptocurrencies provide anonymity. Quick transactions can send stolen funds to other wallets on other exchanges with plenty of time to withdraw the funds in exchange for dollars or another fiat currency.
As the regulatory environment grows and criminal elements give way to the average Joe, security will become paramount. A regime of limited resources like North Korea provides a true test for the ability of the market to survive.
According to Reuters, South Korean intelligence uncovered links, but could not offer definitive proof. Coincheck reported in January the theft of $530 million (58 billion yen) worth of NEM coins. Reuters cited anonymous sources for the report.
This is not the first time Pyongyang finds itself in crypto headlines. South Korean member of Parliament Kim Byung-kee accused the North of stealing billions of Won worth of virtual currencies last year. Kim sits on the parliament's intelligence committee. In January, cybersecurity firm Recorded Future reported that North Korea launched a late 2017 phishing campaign against the South.
Japan is an oasis for bitcoin and altcoins as compared to South Korea, but Tokyo moved last week to investigate flaws in Coincheck's system. Seoul started implementing stricter regulations at the turn of the year, igniting rumors of a ban and causing prices to decline. Justice Minister Park Sang-ki indeed told reporters he wanted blanket legislation in mid-January.
Korea clarified its intentions over the last month, but not before raiding Bithumb and Coinone over tax concerns. Markups also raised hackles, so much so they persuaded Coinmarketcap to briefly drop Korean data from its price calculations.
Despite disquietude over fraud and taxes, Seoul might be more concerned over North Korea. As the crypto craze continues, there might be legitimate fear that Pyongyang could damage the finances of South Koreans exposed on poorly protected exchanges. The North used hackers to steel $7 million from Bithumb in February 2017. In December, Pyongyang probably masterminded the raid that robbed 17% of assets traded on YouBit. North Korea had targeted the same exchange in April.
Capable of it or not, why would the North make it a policy to nab vulnerable crypto funds from its neighbors? Simply stated, North Korea's economy is in tatters. Isolated and unproductive, the regime has built a sophisticated hacking operation in its intelligence bureaus.
Intelligence agencies and private security firms have linked hacker groups Lazarus, Bluenoroff, and Andariel to Northern operations. While known for stealing defense plans and Sony's emails, the hacks are more and more honed on money. The latter group started hacking South Korean ATMs in 2016. North Korean hackers also hit a Bangladeshi bank that year for $81 million. However, the vulnerability of cryptocurrency in a heavily unregulated environment provides major opportunities to grab quick cash.
A September report by Fireeye tallied at least six incidents where North Korean hackers went after South Korean targets.
“The spearphishing we have observed in these cases often targets personal email accounts of employees at digital currency exchanges, frequently using tax-themed lures and deploying malware,” Fireeye's report stated.
In May 2017, North Korea anonymously released the WannaCry ransomware cryptowork on Western users, demanding $300 in BTC before unlocking sensitive files.
Cryptocurrencies provide anonymity. Quick transactions can send stolen funds to other wallets on other exchanges with plenty of time to withdraw the funds in exchange for dollars or another fiat currency.
As the regulatory environment grows and criminal elements give way to the average Joe, security will become paramount. A regime of limited resources like North Korea provides a true test for the ability of the market to survive.