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N. Korea behind the theft of cryptocurrency

Posted February. 07, 2018 08:25,   

Updated February. 07, 2018 08:25


North Korea’s hacking method with video

It has been revealed that North Korean hackers stole cryptocurrency worth about 26 billion won by hacking at least two cryptocurrency exchange centers in South Korea last year, according to the investigation by the National Intelligence Service (NIS). The hackers sent e-mails to members of the exchange centers to lead them to fake cryptocurrency exchange web site and stole their usernames and passwords. They gave them calls, pretending to be exchange center employees, and asked for verification codes, by saying, “It is needed for security reinforcement.” They also sent hacking e-mails, posing as job application form for new employee recruitment to exchange centers, and made malignant code for hacking invade into the network of exchange centers once the e-mail is clicked and viewed.

As North Korean exports of coal, fishery products and garments were restricted last year, its trade deficit with China reached 1.96 billion U.S. dollars, reaching its highest since the North Korean government was established. As it was spotted as the main culprit for hacking the central bank of Bangladesh in 2016, the regime was kicked out from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a network for banks all over the world, which made hacking banks difficult. North Korea lost ways to acquire foreign currency, and it started to hack cryptocurrency exchange centers with weak security systems, thus making a hole in international sanctions on North Korea.

North Korea established an educational institute with four-year courses that educates manpower for computer in 1985, and colleges of information technology (IT) at Kim Il Sung University and Kim Chaek University of Technology, respectively in 1999 and 2001. In an interview with Voice Of America (VOA) in 2016, Park Chan-mo, a Korean-American and an honorary president of Pyongyang University of Science and Technology, said, “I think North Korea is at the same level with the United States in some areas of computer-related technologies.”

It will not be easy for North Korea to encash cryptocurrency at exchange centers. But it can purchase raw materials from third parties and pay for it by cryptocurrency, or encash it through peer to peer (P2P) deals. It is common for individuals to exchange cryptocurrency and cash in China, which shut down exchange centers. The North can also exchange stolen cryptocurrency with different cryptocurrency to avoid being tracked down, or exchange it with cryptocurrency such as “Monero,” the so-called “black coin,” whose transaction records are not available. It is such an irony that North Korea, the poorest country in the world, is stealing cryptocurrency, which is applied with the key technology of the Fourth Industrial Revolution, by using world-class hacking skills.  

Se-Jin Jung mint4a@donga.com