North Korea stole at least $400 million worth of crypto last year. For the process of laundering cryptocurrencies, they go to decentralized exchanges.
The cybercrime encouraged by the North Korean regime resulted in that country stealing at least USD 400 million in 2021, distributed among ether (ETH), the native cryptocurrency of Ethereum. The hacking got followed by bitcoin (BTC) and other cryptocurrencies, although to a lesser extent.
For the first time, most of the funds stolen by North Korea were from others, representing at least 58% of the total hacked. While bitcoin that got stolen was less than a quarter, making up 20% of the total, according to a report by research firm Chainalysis
The remaining 22% of crypto assets mined from North Korea got distributed between ERC-20 tokens and altcoins. On the other hand, the report indicates that cyberattacks went from 4 in 2020 to 7 in 2021.
Hackers Attacked Centralized Exchanges
In 2021, the targets of attacks were investment firms and centralized exchanges. To carry them out, the hackers used techniques such as phishing, code exploits, malware, and advanced social engineering, Chainalisys said.
According to the document, the attacks came from the Lazarus Group, led by the North Korea intelligence agency.
That same group of hackers got accused of stealing more than USD 316 million in bitcoin and cryptocurrencies during 2020, in a report by the Security Council of the United Nations Organization (UN), reported by CriptoNoticias.
Advanced Techniques for Cryptocurrency Laundering
North Korean hackers have executed a more complex laundering process. In this regard, Chainalisys highlighted that the typical washing process used by the Asian nation has several steps.
The first is to exchange ERC-20 tokens and altcoins for ether, all through decentralized exchanges (DEX). Then the ether is mixed. They carry out this activity with software tools that pool and recode cryptocurrencies from thousands of addresses.
After that process, the ether gets exchanged for bitcoin, also in the DEX. Once this gets done, they mix the bitcoins that get sent to new wallets.
Finally, the BTC goes to exchange addresses based in Asia, where the cryptocurrency gets negotiated for fiat, to be later withdrawn in cash by North Korea.
The report highlights that the use of mixers is increasing in North Korea. In 2021, 65% of illegally obtained cryptocurrencies got laundered through the method explained. Meanwhile, in 2020 they reached 42%, and in 2019 they only managed to reach 21%. This report indicates that the North Koreans have been looking to improve their techniques to obtain cryptocurrencies.
In that sense, they consider that attacks can get prevented with blockchain analysis tools, compliance teams, and with criminal investigators; as well as taking advantage of opportunities to freeze or seize the stolen assets and hold bad guys accountable for their crimes.
By: Jenson Nuñez
