Lazarus Group Hacks DMM Exchange
North Korea Covers 30% of Weapons Development Costs by Stealing Coins
Coin Market Negatively Affected Despite 'Trump Rally'
The global cryptocurrency market is on edge as it has been reported that a North Korean hacker group has once again stolen coins worth billions of won by hacking a Japanese cryptocurrency exchange. The North Korean hacker group has been notorious as a major culprit behind cryptocurrency exchange hacks since the 2010s. The stolen cryptocurrencies are being diverted to fund weapons development, prompting intelligence agencies worldwide to deliberate on defense and crackdown measures against North Korean hackers. There are also concerns that this could negatively impact the ongoing Bitcoin rally, dubbed the 'Trump Rally,' following the shooting incident involving former President Donald Trump.
North Korean hacking group Lazarus hacks Japanese crypto exchange... "Similar to North Korean money laundering methods"
According to CryptoNews, a cryptocurrency-focused media outlet, an anonymous blockchain security expert named Zach (Zach)XBT recently stated on his X (formerly Twitter) account, "Considering the similarities in money laundering techniques and off-chain indicators with past cases, the group behind the $305 million (approximately 422.3 billion KRW) coin hack at Japan's DMM exchange at the end of May appears to be North Korea's Lazarus group."
ZachXBT explained, "After hacking the DMM exchange, Lazarus made it difficult to trace the stolen coins by using a mixer, then dispersed the funds across various blockchain networks before converting them into cryptocurrencies. This complex theft strategy is similar to Lazarus's typical money laundering operations." Here, a mixer refers to a 'Bitcoin mixer,' a program that guarantees anonymity and prevents transaction tracking.
Lazarus is a hacker organization established in 2007 under North Korea's Reconnaissance General Bureau. It is known not only for hacking cryptocurrency exchanges but also for spreading ransomware, malicious phishing programs, viruses, and stealing military secrets from other countries.
"North Korea has stolen $3 billion in coins over 6 years... Misused for weapons development"
The North Korean regime is misusing the cryptocurrency funds stolen by its affiliated hacker groups to finance the development of various weapons, including nuclear weapons and missiles. The U.S. cybersecurity firm Recorded Future estimated that North Korea stole approximately $3 billion (about 4.15 trillion KRW) worth of coins from global cryptocurrency exchanges between 2017 and September last year. This amount corresponds to 5% of North Korea's entire economy and 45% of its military budget.
The U.S. State Department also estimates that at least 30% of North Korea's weapons development funds come from hacking cryptocurrency exchanges. Recently, as Russia's orders for North Korean weapons have increased, the frequency and scale of cryptocurrency hacking appear to be growing to finance weapon production costs.
North Korea reportedly uses a hacking force of up to 7,000 personnel to steal cryptocurrencies and engages in money laundering and cashing out through various app payment services as well as offline black-market transactions. According to the BBC, North Korea's Lazarus group cashed out some of the Bitcoin stolen from Cambodia's currency exchange and payment app service 'Huione Pay.' It is also known to be selling cryptocurrencies by mobilizing diplomats stationed in Qatar and Bahrain.
Coin market tense despite the rare 'Trump Rally'
The successive cryptocurrency exchange thefts by North Korean hacker groups are becoming a burden on the cryptocurrency market, including Bitcoin, which has recently rebounded amid expectations of former President Donald Trump's re-election.
According to Investing.com, Bitcoin fell to $55,861.1 on the 7th, fluctuating around $50,000, then rose to $59,209.8 on the 13th?the day of the shooting incident involving former President Trump?and further climbed to $64,765.9 on the 16th, surpassing the $60,000 mark. The main factor behind this upward trend was the increased likelihood of Trump's election, who is expected to pursue crypto-friendly policies. The market refers to this rise as the 'Trump Rally.'
Previously, former President Trump criticized the Democratic Party's policies that imposed strict regulations on cryptocurrencies and pledged crypto-friendly policies as part of his platform. Earlier this month, at a fundraising event in San Francisco, Trump declared, "I will be the cryptocurrency president," promising full support for the cryptocurrency market.
However, experts warn that if the scale of North Korea's cryptocurrency exchange hacks continues to grow, it could pose a significant threat not only to the cryptocurrency market but also to the global economy. Ari Redbord, Head of Legal and Government Relations at blockchain research firm TRM Labs, stated, "North Korean hackers are not motivated by typical hacker desires such as personal greed or money; instead, they operate to fund weapons proliferation and other destabilizing activities, which is a global threat." He added, "We must focus on North Korean hackers' movements not only from the perspective of cryptocurrency asset damage but also from a national security standpoint."
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