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Exchange hacks funded North Korean nukes

The rogue state stole $2 billion from cryptocurrency exchanges over the past two years, using it to fund nuclear weapons development

North Korea funded its nuclear weapons research by looting cryptocurrency exchanges of $2 billion, according to a confidential UN report.

The report cited experts on North Korea’s nuclear weapons program as saying the rogue nation “used cyberspace to launch increasingly sophisticated attacks to steal funds from financial institutions and cryptocurrency exchanges to generate income,” according to Reuters, which gained access to it.

The Democratic People’s Republic of Korea has been under U.N. Security Council sanctions since 2006. The goal is to cripple its nuclear weapons and ballistic missile research and development.

The report said North Korea’s cryptocurrency exchange hacks helped it “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector.”

The DPRK’s Reconnaissance General Bureau, a military intelligence agency, was responsible for many of the exchange attacks, the report said, adding that the stolen cryptocurrency and funds were laundered online. “[T]otal proceeds to date [are] estimated at up to two billion US dollars,” the U.N. experts estimated.

In 2017 and the third quarter of 2018, cryptocurrency exchanges were robbed of $882 million, according to an October 2018 report from cyber-security firm Group-IB. More than half of that was by the North Korean hacker group Lazarus, which the report said was responsible for the January 2018 hack of Japanese exchange Coincheck. At $534 million, that was far and away the largest of those thefts.

President Donald Trump has met with North Korean leader Kim Jong Un three times since coming into office, in hopes of restarting talks. In June, he became the first American president to set foot in the Korean Demilitarized Zone.

While the North Korean leader agreed, the talks have not started, and in late July and early August, the DPRK carried out three short range ballistic missile tests. These came in the wake of a joint U.S.-South Korean military exercise to which Kim’s government strongly objected, 

Leo Jakobson, Modern Consensus senior editor, is a New York-based journalist who has traveled the world writing about meeting and incentive travel, as well as the consumer and employee loyalty business. He also covered the East Coast side of the Internet boom and bust, small businesses, and New York City crime, nightlife, and politics. Disclosure: Jakobson owns no cryptocurrencies.

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