North Korea Faces Difficulties in Cashing Out Cryptocurrency Stolen Through Hacking

US Deputy Treasury Secretary RFA Interview
North Korean Hacking Group Steals $1 Billion in Cryptocurrency
Sanctions on North Korea Prevent Proper Cash-Out

A senior U.S. government official assessed that North Korea's cashing out of cryptocurrency stolen through hacking has not been properly carried out due to sanctions against North Korea.

Brian Nelson, U.S. Treasury Department Under Secretary, stated in an interview with Radio Free Asia (RFA) on the 29th that the Treasury's sanctions on mixer operators and over-the-counter (OTC) traders have been successful.

North Korean Supreme Leader Kim Jong-un. [Image source=Yonhap News]

In the interview, Under Secretary Nelson explained, "North Korea is having a lot of difficulty mixing cryptocurrency to cash it out," meaning that no matter how much cryptocurrency they steal, there is nothing they can buy.

North Korea has been laundering stolen cryptocurrency through mixer operators who repeatedly split the cryptocurrency to make it impossible to know who sent it, thereby making it difficult to trace the use of funds and cashing out.

In response, the Treasury sanctioned mixer operators 'Tornado Cash' and 'Sinbad' in August and November of last year, respectively. OTC cryptocurrency traders who helped cash out cryptocurrency stolen by North Korea were also added to the Treasury's sanctions list in April last year.

Under Secretary Nelson also said that crackdowns are being carried out not only on mixer operators and OTC traders but also on virtual asset exchanges such as Binance to prevent North Korea's cryptocurrency cashing out.

Blockchain tracking firm TRM Labs estimated that the cryptocurrency stolen by North Korea through hacking in 2023 amounted to $700 million (approximately 935.5 billion KRW), an 18% decrease from $850 million (approximately 1.136 trillion KRW) in 2022.

Another blockchain analysis firm, Chainalysis, estimated that North Korea-linked hacking groups hacked 20 cryptocurrency platforms in 2023 and stole about $1 billion (approximately 1.3365 trillion KRW).

Compared to 2022, the number of platforms hacked by North Korea increased by 5 from 15 to 20, but the amount decreased by 41% from $1.7 billion (approximately 2.272 trillion KRW).