Cryptocurrency hacking heists: The growing presence of North Korean hackers
(Photo by Carl Court/Getty Images)
Kathmandu. There have been concerns that North Korean hackers have increased their operations worldwide. The Lazarus Group, that reportedly employs more than six thousand hackers and has the backing of the North Korean government, has supposedly been targeting foreign governments to retrieve intelligence and conduct cryptocurrency heists. The Israeli Defense Ministry, recently claimed, that the Group was detected creating a network of LinkedIn accounts and sending job notifications to senior ranking officials in order to gain intelligence. The Group has been linked with major cyber crimes, such as the WannaCry ransomware in 2017. The US treasury in 2019 had sanctioned three hacking groups, including Lazarus, that were said to have operated under Pyongyang’s orders.
In August 2020, the United States Justice Department produced a detailed report linking the hacking of two virtual currency exchanges to North Korean hackers, whereby millions of dollars was laundered “through Chinese over-the-counter (OTC) cryptocurrency traders.” In the report, the Acting Assistant Attorney General Brian C. Rabbitt, of the Justice Department’s Criminal Division claimed that the, “action publicly exposes the ongoing connections between North Korea’s cyber-hacking program and a Chinese cryptocurrency money laundering network.” Several security officials, further commented on the increasing boldness of the North Korean hackers as they have increased their presence. Don Fort, Chief of IRS Criminal Investigation (IRS-CI), in lauding the efforts of the Cybercrimes unit in containing such activities, regarded the process of the laundering of the currency to be extremely sophisticated.
In a piece published by the MIT Technology Review, a similar observance was made. Examining the established processes utilized by the Lazarus Group from Pyongyang, Christopher Janczewski, who holds an expertise in cryptocurrency crimes, and works in the IRS stated that certain strategies known as “peel chain” and “chain hopping” were employed by the hackers. The former deals with rapidly forwarding the transactions in an automated manner from one Bitcoin wallet to numerous addresses. The latter moves the money away from Bitcoin through several blockchains, listing transactions in a public ledger before transferring in into private accounts.
The elaborate methods are applied to throw the authorities off-track and ensure that the investigative trails run cold. However, with cyber warfare becoming an actual reality, cybersecurity units have been instituted in several governments to track and counter these nontraditional threats. Janczewski has noted that that, “if you’re trying to exchange a huge amount of cryptocurrency for US dollars, you’ll almost inevitably have to bring it all back to Bitcoin. No other cryptocurrency is so widely accepted or so easily converted to cash. Though new coins and privacy technologies have been emerging for years, Bitcoin and its public ledger remain “the backbone of the cryptocurrency economy.” As aforementioned, to turn coin into money, these operations are often moved towards “an over-the-counter trader.” Tracking the movements then becomes fairly simple, however, he acknowledged that the hackers are able to navigate around the more obscure currencies.
Governments have been trying to develop enhanced cyber facilities, in order to crack down on these operations that run widespread. The G7 (Group of Seven), comprised of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, warned on Tuesday that there was an increase in global ransomware attacks. The US Justice Department, in particular has published a “Cryptocurrency Enforcement Framework” where they listed that illegal acts associated with the matter broadly fell under three categories of i) financial transaction for commission of crimes, ii) money laundering, and iii) crimes that includes theft.
With the world rapidly getting digitized, cyber warfare has been a daunting reality that requires immediate response by the governments and global institutions through policies and effective actions.
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