North Korea’s Crypto Heists: A Growing Threat in 2023

Introduction

In recent years, North Korea has made significant headlines for its involvement in cyber theft and cryptocurrency hacks. According to a new report by blockchain analytics company TRM Labs, North Korea has already stolen around $200 million in cryptocurrency through 30 hacks in 2023. While this figure is less than the previous year, it still represents a sum “10 times larger than attacks by other actors.”

The Rise of North Korean Cyber Attacks

Despite a decrease in overall crypto hacks this year, many cybercriminals, including North Korean state-affiliated hacker groups, remain persistent. In 2022, these groups were among the most productive actors in the hacking landscape, stealing nearly $4 billion in various attacks. The main heist, costing $625 million, targeted the Ronin Network, a sidechain developed for the popular play-to-earn crypto game Axe Infinity.

US officials were able to identify the North Korean group Lazarus as the perpetrator of this attack and managed to recover nearly $30 million. However, the North Korean government continues to benefit from crypto hacks. According to the Wall Street Journal, the country has generated over $3 billion in the past five years, with the stolen digital currency funding about 50% of its ballistic missile program (TRM Labs estimates the number to be at $2 billion).

Operational Tactics and Workforce

The North Korean government relies on a workforce consisting of thousands of IT workers from around the world, including China and Russia. These workers earn hefty salaries of up to $300,000 a year. Additionally, the operations involve “frontmen” who apply for jobs at crypto companies. These individuals make small modifications to products, allowing them to be hacked, or forward malicious code to employees of target companies.

The Impact of North Korean Crypto Hacks

Although the revenue from North Korean crypto hacks has fallen by approximately 75% in 2023 compared to the previous year, the country still remains responsible for over 20% of all crypto stolen so far this year, as reported by TRM Labs.

One of the most lucrative hacks in 2023 targeted Atomic Wallet, a non-custodial wallet provider. The attack resulted in the theft of around $100 million in cryptocurrency from over 4,100 individual addresses. This attack was likely executed through phishing or supply chain attacks, where hackers targeted third-party companies that provide services for a product.

The Techniques Used in the Atomic Wallet Attack

During the Atomic Wallet attack, cybercriminals targeted users’ wallets across seven blockchains, including Ethereum and Bitcoin. They exchanged the stolen tokens through decentralized exchanges and then used various techniques to launder the funds, including the use of mixers like Tornado Cash.

The Need for Improved Cybersecurity

Given the prevalence of hacking incidents in the crypto ecosystem, cybersecurity has become one of the most active areas for venture investment and development. Startups like CAT Labs have launched initiatives to promote new cybersecurity standards with the aim of preventing exploits.

North Korean Crypto Heists: A Growing Concern

The rise of North Korean crypto heists poses a significant threat to the cryptocurrency industry and global cybersecurity. Despite efforts from law enforcement agencies and companies like TRM Labs and Chainalysis, the North Korean government continues to benefit from these illicit activities. It is crucial for individuals and organizations involved in the crypto space to remain vigilant and adopt robust security measures to protect their assets.

Summary

North Korea has stolen approximately $200 million in cryptocurrency through 30 hacks in 2023. While this represents a decrease from the previous year, it is still a significant amount compared to attacks by other actors. North Korean state-affiliated hacker groups have been highly productive in their hacking endeavors, with the main heist in 2022 costing $625 million from the Ronin Network. Despite efforts to recover stolen funds, the North Korean government continues to benefit from crypto hacks, with the stolen digital currency funding a substantial portion of its ballistic missile program. The country relies on a worldwide workforce of IT workers and employs various tactics, including the use of “frontmen,” to perpetrate these hacks. While revenue from North Korean crypto hacks has decreased in 2023, the country remains responsible for a significant percentage of all crypto stolen. One notable hack targeted Atomic Wallet and resulted in the theft of $100 million in cryptocurrency. The crypto ecosystem must prioritize cybersecurity to mitigate these risks and protect users’ assets.

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North Korea has stolen around $200 million in cryptocurrency through 30 hacks so far in 2023, less than in 2022 but still a sum “10 times larger than attacks by other actors,” according to a report new report by blockchain analytics company TRM Labs.

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