December 5, 2023

North Korean State-Backed Actors Pilfer $3 Billion in Digital Assets Over Six Years

The crypto industry, with its broad benefits, faces challenges such as hacks and thefts, driven by the anonymity inherent in crypto transactions.

A recent report reveals that state-sponsored hackers from North Korea have successfully absconded with approximately $3 billion in digital currency since 2017, with 44% of the pilfered cryptocurrency in 2022 linked to these actors.

The crypto industry gained significant mainstream attention in 2017, attracting investors to its nascent ecosystem. However, this surge in popularity also drew the attention of malicious entities. Intelligence company Recorded Future's latest report reinforces the prevalent belief that North Korean hackers have been targeting the industry in recent years.

North Korea has a history of engaging in illicit activities, with estimates from 2016 suggesting that such activities generate $550 million to $1 billion annually for the country. Recorded Future's report indicates a strategic shift by North Korean hackers, backed by the government, from traditional finance to crypto around the 2017 bubble when substantial funds flowed into the industry.

Led by groups like the Lazarus Group, these hackers have successfully stolen over $3 billion in crypto assets. Initially targeting South Korean crypto exchanges, they made off with around $82.7 million in crypto during the early stages.

Over the years, the hackers have expanded their operations, with the majority of the proceeds, estimated at $1.7 billion, occurring in 2022. Recorded Future suggests that this significant sum, ten times the value of the country's $182 million worth of exports in 2021, or 5% of the economy, or even 45% of its military budget, likely financed various national projects.

While security measures and regulations have evolved to counter crypto-related crimes, hackers have adapted, employing new methods. Despite measures leading to a notable decrease in crypto crimes, intelligence reports indicate that North Korean hackers illicitly gained at least $180 million in the first half of 2023. According to blockchain security firm SlowMist, crypto hacks have resulted in losses exceeding $30 billion since 2012.

Despite efforts to counter these activities, a recent report by blockchain audit company Certik highlights that November 2023 saw losses of approximately $363 million due to exploits, hacks, and scams.

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