The amount of illegal funds that have been acquired by North Korean fraudsters through series of illicit activities including hacking the networks of various cryptocurrency exchanges, automated teller machines, and other international financial institutions is estimated to be around $2 billion.
According to a Friday report which made mention of documents from the United States law enforcement agencies and some other legal experts, the hackers take advantage of the regulatory deficiencies of the crypto industry and use different methods, including chain hopping and mixer, to remain anonymous and untraceable.
Various experts said that the North Korean hackers make use of these techniques mainly because hacking these institutions involves low risks, promises high rewards, and above all difficult to find out the culprit.
Speaking on this, Jesse Spiro, global head of policy at US blockchain analysis company Chainalysis explained, “What we’re comfortable saying, at present, is that North Koreans have stolen at least 1.5 billion US dollars in cryptocurrency … So, it’s far greater than other state actors in relation to that. North Korea, I think, has identified hacking the cryptocurrency exchanges as a low-risk, high-reward.”
The US Department of Treasury said that about three identified North Korean hackers namely, Andariel, Lazarus, and Bluenoroff had defrauded five Asian crypto exchanges of $571 million between January 2017 and September 2018.
Other law enforcement agencies and federal prosecutors also mentioned large sums of money that these hackers have been able to extort from cryptocurrency exchanges, including the largest amount extorted from just one company, about $250 million from a South Korean exchange in 2018.
Kayla Izenman, a research analyst with the UK Think Tank Royal United Services Institute said, “I’d say they are really advanced cybercriminal actors in general, more than any other sanctioned countries with the exception of maybe Russia and to some extent China. But they’re using a different approach towards cryptocurrency and towards the financial system and sanctions evasion than any other sanctions country … I would assume North Korea is using cryptocurrency to further the state’s goal.”
The increase of these cyber crimes has greatly affected many companies and it is one of the major hindrances to the mainstream adopted of cryptocurrencies.