North Korea Hacked Cryptocurrency Exchanges to Bypass Sanctions, UN Panel Claims

Francisco Memoria

A panel of experts from the United Nations (UN) has reportedly recently revealed that North Korea has attacked cryptocurrency exchanges to bypass economic sanctions and obtain foreign currency.

According to a report obtained by Nikkei Asian Review, which is set to be formally submitted the UN Security Council, the country has managed to rake in around $670 million in foreign currency and cryptocurrencies through cyberattacks and the use of blockchain technology to cover its tracks.

Per the news outlet, this is the first time the panel detailed how North Korea has obtained foreign currencies through cyberattacks on financial institutions between 2015 and 2018. The country’s government, the report adds, has created a “pool of illicit funds” that has been growing since 2016 thanks to the cyberattacks it conducted. Nikkei’s post reads:

The attacks are believed to be conducted by a specialized corps within the North Korean military and are now an important part of North Korean government policy.

The country has been doing what it can to get its hands on foreign currency and cryptocurrencies, as economic sanctions imposed on the country restricted its coal exports, which were a key earner.

In response to the report, the UN panel suggested member states should “enhance their ability to facilitate robust information exchange on the cyberattacks by the Democratic People's Republic of Korea with other governments and with their own financial institutions,” to detect potential North Korean attempts to evade sanctions.

In a specific case, 10 million users of South Korean e-commerce portal Interpark are said to have had their personal information stolen. Using it, hackers demanded a total of $2.7 million, presumably in cryptocurrency, as a ransom for the data.

Notably, the South Korean government has in the past accused Pyongyang of carrying out cyberattacks against its cryptocurrency exchanges. The report claims the country stole over $570 million worth of cryptocurrency with five attacks on exchanges in Asia conducted between January 2017 and September of last year.

 In its report, the UN panel wrote that:

[Cryptocurrencies] provide the Democratic People's Republic of Korea with more ways to evade sanctions, given that they are harder to trace, can be laundered many times and are independent from government regulation

The report comes after South Korea revealed the launch of a task force meant to fight cryptocurrency-related crimes. Pyongyang has notably attempted to hold an international blockchain conference in October of last year.