Authorities track the theft and laundering of cryptocurrencies related to North Korea. The OXT firm performs an analysis of the transactions involved and reveals the laundering methods.

A new report delves into the methods that hackers affiliated with North Korea use to launder cryptocurrencies stolen from their victims, mainly exchanges.

Based on the analysis of civil lawsuit number 20-606, filed with US court authorities on March 2^nd, the OXT firm analyzed the movements and transactions of Bitcoin and other networks, discovering the methods that cybercriminals use to obfuscate their illegitimate transactions in cryptocurrencies.

In this US legal process, two Chinese citizens (Tian Yinyin and Li Jiadong) are accused of laundering money stemming from the hacking of South Korean exchanges and other cyberattacks.

According to the OXT report, the criminals managed to withdraw a total of USD 67.3 million by depositing them in Chinese banks, in addition to US 1.5 million worth of iTunes gift cards, using the Paxful p2p exchange service to acquire them.

Even though the complaint does not link these two hackers to the Lazarus group, the infamous cybercriminal organization linked to the North Korean government, a recent provision by OFAC (Office for Foreign Asset Control) includes the addresses of the case on their list of sanctioned entities.

Although the court document does not state the name of the exchange, OXT mentions these companies. OXT contrasts the publicly known information with the data included in the lawsuit to find the victims’ possible names.

The two subjects are accused of laundering thousands of BTC and ETH in three phases. In the first of these, they implemented a Peeling structure, a money- laundering method that, in combination with CoinJoin, makes it difficult to track the perpetrators. However, it is necessary to conduct certain precautionary measures to make it successful.

Peeling is a process of concealment of transactions that starts from a main address. Each transaction of the cycle has two outputs: one of a smaller size towards a third address (property of the initial issuer) and another of a large size (almost all of the amount) as change to the issuer of the transaction, explains OXT, who has noted this transaction pattern after the Mt. Gox case.

In the second phase, the cybercriminals deposited their funds at exchanges that do not implement KYC (Know-Your-Customer) policies. Retaining the funds for a certain time under the custody of these exchanges helps camouflage the funds with those of other users, making it difficult to track them.

In 2018, the criminals that hacked Bithumb exchange deposited nearly 2,000 BTC stolen from YoBit, a Russia-based exchange that is also listed in the OXT report.

In the third phase, they withdrew funds to sites that offer the exchange of cryptocurrencies for national fiat currencies. However, most of these require user identity authentication. At this point, the funds would have been clean to withdraw permanently, since in the second phase the points of the relationship with the stolen funds would break.

In mid-2019, the UN stated that hackers affiliated with North Korea have obtained up to USD 2 billion in cyberattacks against financial institutions and cryptocurrency exchanges, in a report that at the time accounted for 35 cases worldwide.

In 2019, there were up to USD 282 million worth of cryptocurrencies lost to cyberattacks. The firm Chainalysis also highlights that hackers have improved their methods to mislead the tracking of transactions. However, it is not impossible if there is significant computational power.

By Willmen Blanco

Small and medium-sized companies can participate in the project. The call will be opened until next July 4^th.

Through a project that seeks to achieve the concept of “Smart Island”, the Society of Economic Promotion of Gran Canarias (SPEGC) reported that the country is looking for technology companies that want to be part of the initiative. The call hopes to include different technology sectors, including Distributed Ledger Technology (DLT) and blockchain.

According to the announcement, the objective is to boost the tourism sector in the well-known Spanish islands, as well as boost the economic activity that the Covid-19 outbreak has reduced due to the crisis.

The agency explained that the project will work in sectors. Each participating company may suggest two proposals for the economic sector, and two others for the tourism sector. Once the proposals are selected, the agency will grant the company EUR 250,000 for each sector, which is a total of EUR 500,000 for both the economic and tourism sector. The reception of projects or proposals is already available and will close next July 4^th.

Call for the Tourism Sector

The first call highlights the importance of tourism for the Canary Islands and hopes to boost the sector through the use of innovative technologies. The name of the project for the tourism sector is Gran Canaria Smart Tourist Destination. According to the call, the sector hopes to include technologies such as Artificial Intelligence (AI), Business Intelligence, Big Data, Internet of Things (IoT), Blockchain, and Virtual Reality.

The main idea is to incorporate the aforementioned technological tools to conduct important analyzes that record and evaluate valuable data, such as the flow and behavior of tourists, the surveillance and preservation of tourist spaces, and the concentration of people in closed places, the latter as a health measure for the control of the Covid-19 outbreak.

The announcement explains that participating companies must meet certain legal requirements that allow them to create and maintain business with the state. Besides, although the project is aimed at small and medium-sized companies, the announcement detailed that, preferably, these participants should have connections with research centers.

Call for the Economic Sector Seeks to Improve Waste Management

Regarding the second call, it is known that it will be more focused on waste management, climate monitoring, safeguarding of public places, transport and mobility, as well as commercial and citizen activities.

For this sector, the call is to develop projects that include technologies such as Virtual Reality, Cybersecurity, Technology with Drones, Blockchain, IoT, Big Data, and Robotics.

Smardest will be the name of the general call that refers to the Smart Island project. Smardest will have as its main axis “promoting the destinations of the cooperation space to transform these territories into Smart Tourist Destinations (DTI)”. Furthermore, they SPEGC added that implementing systems that maintain sanitary measures against the Covid-19 it pandemic could serve for future similar contingencies in the future.

This suggests that the effort seeks to complement the measures of the Spanish government against the pandemic. Thus, the so-called health passport will be enabled for next April.

By María Rodríguez

Ethereum miners increased the Gas limit to accelerate the network. This could have long-term consequences.

In recent days, the Ethereum mining community increased the network’s ability to run. This increase allows large amounts of transactions per second.

The increase of Gas limit is around 25% and reaches limits not seen until now on the network. This phenomenon occurs when a large number of miners make a joint effort to increase capacity.

In this way, the amount of Gas per block has increased considerably, taking off from the 10,000,000 base. At the time of writing, practically all the mining pools of this cryptocurrency reported Gas above 12,000,000.

Another Great Milestone

The fact that the Ethereum miners agreed to increase the speed of the network, has caused upheaval. On social networks, there are all kinds of opinions about this increase. Some of them are favorable and others express total displeasure with that situation.

Bitfly, the firm that owns Ethermine, one of Ethereum’s mining pools, gave its opinion. On their Twitter account, they stated that this increase in the Gas limit is another great milestone for the community.

“Ethereum miners voted to increase the Gas limit per block from 10,000,000 to 12,500,000. In theory, this means that the Ethereum network now can process ~ 44 transactions per second, instead of ~ 35. Another great milestone for the community”, they noted.

Other mining pools such as Hiveon Pool, Spark Pool, and F2Pool also reported the Gas limit above 12,000,000. However, they have not yet issued any comment on the matter.

Gas Limit Increased by Ethereum Miners

Gas is the amount paid to conduct operations on the Ethereum Blockchain network. When it comes to operations, it can be one or several transactions, the creation of centralized applications, or execution of smart contracts.

There are several reasons to use Gas. Some of them are paying transaction fees for Ethereum miners to validate. Another reason is to prevent the system from crashing with an illegal operation and, finally, so that the system does not crash with inflated executions by negative actors.

Another important factor of Gas is that it determines the number of transactions includes in a block. Increasing the block-by-block limit allows increasing the capacity of the network, making it faster.

Increase with Possible Negative Consequences

Those people unhappy with Ethereum miners for having increased the speed of the network also expressed their views. The main concern was around possible long-term consequences.

The aforementioned increase could cause the blockchain network to become too large. As a consequence, it would be difficult and expensive to keep it afloat.

Important characters in the network have had this opinion since they consider that congestion means vulnerability. The developer Péter Szilágyi sees this action of the Ethereum miners as a gesture of selfishness. He says that, for pursuing an immediate benefit, they do not take into account the consequences for the network.

Vitalik Buterin, Co-founder of Ethereum, also spoke about this subject. For him, the fact that Ethereum miners increased the Gas limit would be inconvenient. At the same time, he said that he understood the miners’ point of view.

By increasing the Gas limit, Ethereum miners enjoy lower fees and this makes the network easier to use. Buterin wrote that he had spent USD 40 in fees just to make transfers to three people. He made a clear reference to those companies that must transfer large amounts, in which they leave tens of thousands of US dollars in fees.

By Alexander Salazar

Bitcoin’s price volatility level is below 50%, after having reached its highest point this year. At the end of March, its price volatility exceeded values ​​above 160%.

According to an analysis by Coin Metrics, Bitcoin’s daily price volatility, measured in terms of its 30-day average, recently reached its lowest value in the past three months.

The week of March 7^th, just before Bitcoin’s drop in price on March 12^th, Bitcoin’s price volatility level was below 50%. This parameter then recorded a rise to the 140% level after the World’s Health Organization (WHO) declared the spread of COVID-19 as a pandemic.

The volatility in the price of the cryptocurrency in a period of 30 days even reached 167.24% on March 31^st, the highest point since January 2014, according to data from the asset management company Blockforce Capital. Additionally, its price volatility in a period of 60 days reached 122.95% on March 31^st, which is its highest value since February 2014, according to charts by Blockforce Capital.

Coin Metrics highlights that Bitcoin’s price volatility has been below 50% on 35 occasions, since the first time Bitcoin’s price reached USD 1,000 in November 2013. Furthermore, it states that the cryptocurrency has not been able to maintain those price volatility levels for a long time. A total of 80% of those periods of moderate and low price volatility lasted less than 20 days, whilst 50% of them lasted less than 10 days. For this and other reasons, Bitcoin has found it difficult to achieve massive adoption as a means of payment.

To address the behavior of Bitcoin’s price volatility after the cryptocurrency has gone through those periods of volatility lower than 50%, Coin Metrics studied the percentage change in its price volatility in 22 of the 35 periods aforementioned during two months. These periods are segmented in the last 10 days before leaving the volatility zone below 50% and the following 50 days when the volatility grew above that threshold.

Bitcoin exhibits price volatility levels higher than that of traditional assets and indices. However, in 2020 it has remained below 0.05, except in a period of one and a half months, after March 12^th, in which its price volatility recorded its highest point since 2014. A chart that uses non-percentage values ​​for the volatility shows this.

On the other hand, Bitcoin exhibits less volatility than other cryptocurrencies, according to a comparative analysis between the main cryptocurrency and various altcoins by Coin Metrics. For instance, in January and February of this year, with values in Bitcoin’s price volatility below 50%, cryptocurrencies like Ether (ETH) and Ripple’s XRP exhibited a percentage of price volatility that rose to 70%.

If low volatility remained at moderate levels, investors would feel greater confidence and cryptocurrencies would be able to achieve further adoption as a means of payment. The latest Bitcoin’s low price volatility level will attract more people to buy the main cryptocurrency on the market.

By Alexander Salazar

A South Korean professor at Hongik University believes that cryptocurrencies could not be safe from the market downturn.

Professor Hong Ki-hoon, from the University of Hongik in South Korea, commented that cryptocurrencies like Bitcoin (BTC) are not a “safe-haven asset”, as are gold, dollars, or even bonds of the United States Treasury.

However, although the professor indicated that users should not consider these digital assets as havens, he does not deny that the current volatility of traditional financial markets is causing more money to accumulate and more people to turn to the crypto market. Local media recently informed this information.

To explain his opinion, Ki-hoon said what conditions must be met by digital assets to value havens. “To be a safe-haven, two conditions must be met. First, the volatility of the asset’s value must be low, and second, when market volatility is expected to increase, the value should rise. Therefore, cryptos do not meet with the conditions”.

Hong, from the Business Administration department of Hongik University, also explained why more users have lately resorted to buying cryptocurrencies. “The reason for the volume increase after the markets slump was that the spirit of investing in increased volatility worked to offset the depreciated value of assets,” he said.

In an article, Hong also details concerns that some governments have regarding “cryptocurrency market manipulation.” They fear that these digital assets will cause destabilization in the national and traditional economies.

In the text, Hong states that the crypto environment is not sufficiently regulated in the country to operate safely and protect users. The professor believes that the current popularity of the market does not alleviate the concerns of investors who still doubt whether or not to buy cryptocurrencies.

On the other hand, an investment expert who declined to reveal his name commented that: “Individual investors are often unable to adequately manage equity risks, but it is virtually impossible to gauge the risk factors of cryptocurrencies. You have to understand them. before fully investing.” This means that those who do not prepare or research to face the subject are at greater risk.

Last May 27^th, the South Korean Ministry of Economy and Finance said the country is preparing to amend the nation’s Income Tax Law. This movement could affect the profitability of cryptos within the country, by making mining costs higher or imposing restrictions that hinder the operation of miners and traders.

South Korea has a large number of investments in cryptocurrencies, technological developments, and large crypto exchanges. However, the government of South Korea is not interested in cryptocurrencies.

Cryptocurrency regulations in South Korea are strong, until now. The government banned ICOs, whilst local crypto exchanges have closed or are under more supervision. The South Korean government is concerned about money laundering, tax evasion, and excessive speculation that some users may try to do with cryptocurrencies. Hence, lawmakers are expected to continue trying to impose new restrictions. Every user can make a positive change, by doing nothing that puts the population at risk.

By María Rodríguez