Cryptocurrency exchanges are getting better at protecting their assets. Security has improved greatly this year, making it more difficult for thieves to break in and steal crypto. Those efforts have resulted in the mindless cyber thugs out of North Korea to give up on attacking the exchanges, going after individuals, instead.
As reported by the South China Morning Post, the number of crypto attacks on individuals has risen substantially in the past several months. The news outlet talked to the CEO of South Korea-based Cuvepia, a cybersecurity firm, who indicated that the company had recently uncovered more than 30 attacks. He added that it’s possible that a number of attacks have not been caught, which could put the actual number of heists or attempted heists at more than 100.
The founder of cyber warfare research company IssueMakersLab, Simon Choi, adds that the transition to individual attacks is a direct response to heightened security on the exchanges. He adds, “Direct attacks on exchanges have become harder, so hackers are thinking about alternatively going after individual users with weak security.”
Choi explains that the majority of the attacks have been conducted against wealthy South Korean citizens because “[the hackers] believe that if they target CEOs of wealthy firms and heads of organisations” then “they can take advantage of billions of won in virtual currencies.”
Another cybersecurity analyst, FireEye’s Luke McNamara, also pointed out that “it’s possible from previous intrusions they’ve been able to collect information” about “people using these [cryptocurrency] exchanges. He states that “when [the hackers] understand and know the targets” then “they are able to craft lures specific to those organisations or entities.”
There have been indications that the hacks aren’t just being led by crooks simply looking for an easy payday. Reports started circulating a couple of weeks ago that the North Korean regime could be behind the attacks. As sanctions create a weaker government, North Korea government officials could be turning to thievery, crypto money laundering and initial coin offerings (ICOs) in order to attract funds to continue keeping the citizens under control and to line their own pockets.
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To avoid the economic sanctions imposed by the United States, North Korea has reportedly been using cryptocurrencies “increasingly,” according to two Washington-based financial analysts.
On Monday, news outlet Asia Times published a report quoting Lourdes Miranda, an independent financial analyst and financial crimes investigator, and Ross Delston, an independent attorney and expert witness in money laundering cases. The two financial experts claimed that the highly secretive and totalitarian Asian country has been using virtual currencies, and is also working to develop its own crypto in the near future.
According to the analysts, the Democratic People’s Republic of Korea (DPRK) has been using cryptocurrencies for quite some time already as these provide the state more ways to get around U.S. sanctions.
To cover their tracks, the analysts claimed North Korea has been sending their money to different cryptocurrency exchanges, which make it harder for individuals or states to scan and track their activities. The analysts also believe the government could be moving to various cryptocurrencies to obscure the origin of their funds.
“International criminals everywhere prefer crypto-currencies and the DPRK is no exception. Cryptocurrencies have the added advantage to the DPRK of giving them more ways to circumvent U.S. sanctions. They can do so by using multiple international exchangers, mixing and shifting services — mirroring the money laundering cycle,” according to the analysts.
In their research, Miranda and Delston discovered that North Korea initially hired people who have convenient personal identifiable information (PII) to open crypto wallets. These wallets were then used by the authorities to trade cryptocurrencies. Eventually, local miners would transfer cryptocurrencies into numerous European wallets where the mixing and shifting are done to confuse the anti-money laundry (AML) and know your customer (KYC) systems.
According to the report, the process ends with a North Korean nominee buying BTC that are later converted to other popular cryptos like Bitcoin Cash, as well as ETH or LTC, before they’re traded to fiat.
The report comes several weeks after South Korea’s own Korea Development Bank (KDB) suggested that North Korea has been mining cryptocurrencies, albeit on a small scale. Additionally, it appears that a technology company in the country is developing an exchange platform for cryptocurrency, even though the report noted that the average citizens of North Korea have little or no knowledge of cryptocurrency.
Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
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