Security & Fraud

North Korea Dodges Sanctions With Crypto Heists And Cybercrime

North Korea Dodges Sanctions With Crypto Heists And Cybercrime

Kim Jong Un’s regime in North Korea is thought to be relying more and more on cybercrime to gain access to foreign currency, according to a report by The Financial Times.

As the country feels economic pressure from sanctions, the online attacks are becoming increasingly important. Pyongyang has thousands of skilled hackers who bring in hundreds of millions every year. The money is estimated to be North Korea’s number one revenue stream.

“All the channels of trade, regardless of the legality, have largely shrunk. The weapons trade is limited. Cyber activity is one of the remaining ways for North Korea to earn foreign currency now,” said Yoo Dong-ryul, director of the Korea Institute of Liberal Democracy, which is a think-tank based in Seoul.

Kim Jong Un’s regime is known for finding illicit and unusual ways to bring money into the country, with tactics like global insurance malfeasance and the creation of counterfeit drugs and currency.

The most visible moment so far for cyberattacks in North Korea came in 2014, when the country was linked to the hacking of Sony Pictures after a movie was released that showed the country and its dictator in a supposed bad light. That movie was called “The Interview.”

North Korea was also blamed for the WannaCry malware attack, and also digital heists from India, Bangladesh and China. No one knows for sure just how much has been stolen, either.

In March, the United Nations published a report saying that there were five attacks on crypto exchanges between January of 2017 and September of 2018 that ended up stealing around $571 million. One hacker in particular named Park Jin Hyok, who’s a wanted criminal, is thought to have stolen more than $1 billion. To compare, the country’s weapons sales to places like Iran, Syria and Libya in the middle of the 2000s was estimated to have brought in $500 million a year.

The hackers in North Korea are “persistent, patient and skilled,” according to one analyst.

“There was an impression that these [banking hacking operations] were opportunistic targets. We can see they are decidedly not,” said Priscilla Moriuchi, a former US National Security Agency analyst.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.