The weakening of cryptocurrency markets has wiped out millions of dollars in stolen funds by North Korean hackers, endangering a vital funding stream for the sanctions-stricken nation and its weapons program.
North Korea has capitalized on stealing cryptocurrencies in the last few years, making it a formidable hacking force that led to one of the largest cryptocurrency heists ever, in which close to $615 million was stolen.
According to two sources from rival South Korea, the severe plummeting of crypto values, brought by a larger economic slowdown, makes Pyongyang’s ability to cash in on its cybercrimes more challenging, and may impact its plans to fund its weapons development program.
New York-based blockchain analytics firm Chainalysis, which monitored old, unlaundered North Korean crypto holdings, including funds stolen in 49 hacks from 2017 to 2021, said that the value of these holdings have plunged from $170 million to $65 million since the start of 2022.
Meanwhile, an employee in the North Korean embassy in London said he could not comment on the plunge as the allegations of cryptocurrency hacking are “totally fake news.”
Experts are mum in providing details about the types of cryptocurrency North Korea holds, as this might give away investigation methods.
North Korea is under severe sanctions from the international community over its nuclear program, giving it very limited access to global trade or other revenue streams. This makes crypto heists extremely attractive, according to investigators.
In 2019, sanctions monitors estimated that North Korea had generated some $2 billion for its weapons of mass destruction programs through cyberattacks.
Furthermore, according to Chainalysis, the country is now employing sophisticated methods in stealing cryptocurrency, expanding its use of software tools that gather cryptocurrencies from thousands of electronic addresses.
According to a recent Chainalysis report, North Korean hackers have deceived people into providing access to steal digital funds from internet-connected wallets into North Korea-controlled addresses.
U.N. sanctions monitors have said that as recently as December 2021, North Korea has continued to smuggle coal to China – alongside other major exports prohibited by Security Council resolutions.
For more information, read the original story in Reuters.