North Korea crypto hack: Pariah nation state North Korea has been accused by the FBI of being behind one of last year’s biggest crypto hacks, where US$100 million was stolen from a company that allows users to transfer cryptocurrency between blockchains.
North Korea has a history of crypto hacks
In the face of crippling economic sanctions, North Korea has been actively upping its crypto hacking game, the proceeds of which are allegedly being used to fund its economy and nuclear weapons program. Over the past five years, the stolen loot is estimated to amount to over US$1.2 billion, highlighted by a mammoth US$626 million hack in 2022 of Web3 play-to-earn game Axie Infinity.
And this isn’t merely speculation, as just last year, a former Ethereum developer was jailed for five years for assisting the North Korean government in using crypto to get around sanctions.
FBI blames Lazarus Group
Yesterday the FBI announced that the Lazarus Group — a group linked to the North Korean government by both cybersecurity companies and government agencies — was responsible for the US$100 million hack against Harmony’s Horizon bridge.
The FBI said that around two weeks ago, the hackers used RAILGUN, a crypto privacy protocol, to launder US$60 million in Ethereum stolen from heist.
“A portion of this stolen ethereum was subsequently sent to several virtual asset service providers and converted to bitcoin. A portion of these funds were frozen, in coordination with some of the virtual asset service providers.”
No doubt part of the funds that were frozen were on Binance, as CZ noted in a tweet on January, 16.
Continuing in its statement, the FBI also published 11 cryptocurrency wallet addresses where the remaining US$40 million in stolen bitcoin were moved to. As of yet, they remain stagnant and crypto forensic firms are waiting to pounce should any further moves be detected.
Last year proved to be a record for crypto hacks with over US$3 billion being stolen according to blockchain analysis company Chainalysis. Knowing that a good chunk of that is linked to rogue nations such as North Korea, the FBI said that it would “continue to expose and combat the DPRK’s use of illicit activities—including cybercrime and virtual currency theft—to generate revenue for the regime”.