Just a few days after three missiles were launched by North Korea into the ocean, a team of U.S. private investigators and spies from South Korea covertly met in Pangyo, South Korea. The team had been tracking $100 million worth of crypto laundered from a California crypto company, Harmony, for some time in the hopes that hackers would move the crypto into accounts from which it could eventually be changed to Chinese yuan or dollars to be used for financing North Korea’s illicit missile development.
The investigators and spies only had a short period to help in the recovery of the money before it could be deposited into several accounts and become untraceable.
In the end, the hackers briefly lost control when they transferred a bit of the funds — a little more than $1 million — to a dollar-linked crypto account in late January. The astute detectives and spies got their chance and alerted American law enforcers about the move, who froze the funds.
This operation provides a unique glimpse into the unknown world of crypto sabotage — and the continuous efforts to destabilize what has grown into a multi-billion industry for the Korean nation.
According to data estimates from private companies and the Unied Nation, hackers from North Korea have acquired billions from cryptocurrency companies and banks in the last few years. As authorities and investigators have grown more aware of the situation, the government has been exploring increasingly sophisticated means to turn stolen digital currency into hard currency.
To maintain national security, South Korea and the U.S. must immediately cut off North Korea’s crypto supply.
During a meeting held in Seoul on April 7, 2023, South Korean, Japanese and U.S. diplomats discussed North Korea’s hacking of cryptocurrency. They also expressed concern over the fact that North Korea continues to use its little resources for war equipment. The country has, however, always denied these allegations.
Recent efforts have concentrated on North Korea’s use of mixing services, which are readily accessible instruments used to conceal the source of the crypto.
One of the most significant U.S. countermeasures was in August when officials sanctioned Tornado Cash, a cryptocurrency “mixing” business that was reportedly used to launder $455 million for North Korean hackers. Tornado Cash was especially useful because it had more liquidity, making it simpler for North Korean money to blend in with other sources of funding.
Between December of last year and January of this year, the hackers also used Sinbad, another mixing service, to launder $ 24 million.
The North Koreans are attempting to steal not only from crypto companies but also directly from other cryptocurrency thieves.
Elliptic reports that after an unidentified hacker stole $200 million from the British company Euler Finance, North Korean hackers attempted to set a trap by sending the hacker a message on the blockchain that was laced with a vulnerability and may have been an attempt to access the money. The trick, however, failed.
The increasing sophistication of hackers means that industry actors such as HIVE Blockchain Technologies Ltd. (NASDAQ: HIVE) (TSX.V: HIVE) need to develop mechanisms to keep wrong elements from accessing their platforms.
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