Cryptocurrency is growing at a rather steady rate, and so are crypto crimes. The $300 billion net worth of all cryptocurrencies (as of June 2019) makes digital assets quite a lucrative prey in the eyes of bad actors. In fact, in 2018, hackers were able to illegally amass about $1.7 billion worth of cryptocurrencies from exchanges.
Although bitcoins and other forms of virtual tokens are relatively secure as far as currencies go, fraudsters and scammers are pouncing on crypto as a young industry where not everyone is well informed. With their cunning ability, crypto criminals are able to carry out illegal activities against less experienced crypto investors.
The pseudonymous nature of crypto also makes it possible for crooks to hide their personal identity, allowing them to get away with hacking or phishing schemes. This is especially true for nations like North Korea—officially known as the Democratic People’s Republic of Korea (DPRK) —which has had a history of resorting to cyberattacks while managing to cover its tracks.
What’s Happening in North Korea?
North Korea’s role in crypto-related crime was first reported by a panel of cybersecurity experts at the U.N. Security Council in March this year. According to U.N. experts, illicit cryptocurrency activities has provided a way for North Korea to evade economic sanctions imposed against the country for orchestrating nuclear and missile programs. The sanctions were intended to force North Korea to abandon its nuclear weapon programs by crippling its unstable economy.
True enough, the sanctions have affected North Korea’s exports, preventing the unitary state from making foreign exchange earnings. To cope with the financial restrictions, North Korea has set its eyes on cryptocurrencies.
In its report, the U.N. cybersecurity panel revealed the following findings:
- The North Korean government has been launching cyberattacks on overseas financial institutions since 2015 to set up a pool of illegal funds, using blockchain technology to maintain the anonymity of cybercriminals.
- Korea’s North faction carried out crypto crimes against Asian exchanges at least five times between January 2017 and September 2018. The losses were valued at $571 million.
- A hacking incident involving Interpark—a South Korean e-commerce site—resulted in the identity theft of its 10-million-strong user base. The North Korean hackers were demanding a $2.7 million ransom in exchange for the stolen data.
- North Korean cyber criminals also tricked crypto investors into buying tokens from Marine Chain, a Hong Kong-based shipping company. Buyers were promised of ownership of ship parts, which never materialized since the company was shut down in September 2018 for supplying cryptocurrencies to Kim Jong-un’s government.
Why You Should Care
With the crypto industry in red alert, it pays to understand how the North Korean crypto threat may affect you—whether directly or indirectly.
For one, international security groups are positive that North Korean hackers, led by the APT 38 group, are channeling all the stolen money toward the nation’s military operations. As of 2018, APT 38 is believed to have contributed $1 billion in North Korea’s financial resources. A chunk of this money may be funding DPRK’s missile and nuclear development programs. Surely, you don’t want North Korea to have the means to sustain its nuclear war ambitions if it continues with its illegal activities.
It also goes without saying that failure to stop North Korea from engaging in its fraudulent schemes can compromise the safety of your crypto assets. This is true particularly if you’re from Southeast Asia, where a large crypto user base makes it an attractive market for con artists. In fact, the Philippines and Vietnam were not spared by attacks from APT 38.
All of these scenarios pose negative implications for the crypto industry, which has been a major driving force for many economies all over the world. On the one end of the spectrum, crypto companies may be forced to shut down their operations to avoid potential losses. A rising number of crypto crime can also scare investors away, which is bad if you’re already into crypto trading since this could mean the price of your crypto assets might diminish. As a result, your chance to make profit might be slim as well.
Countering the North Korean Crypto Threat
Whether we like it or not, the North Korean crypto threat is real and brings with it some very serious impact. The good thing is, there are measures that can help you counter scams and other crypto-related illegal activities.
It’s very important that you keep yourself up-to-date on the latest news surrounding the crypto industry, while being careful to verify first before you believe what you read or hear. You should likewise be cautious in giving your personal information to suspicious individuals or groups who might use it for their own gains.
When making transactions, make sure that you’re dealing with legitimate crypto companies or exchanges. Look out for red flags like unsecure websites, bad user reviews, unreliable customer support, and the like.
With these precautionary measures, the crypto world has a better fighting chance against cybercriminals from North Korea and elsewhere.