June 19, 2024

North Korean Hackers Surpassed $1 Billion in Crypto Theft in 2023

In a startling revelation, experts have unveiled that despite a significant drop in the overall funds pilfered from cryptocurrency platforms by over 50% in 2023, the threat of hacking looms large with a notable surge in incidents. Particularly alarming is the uptick in cyber heists attributed to North Korea-linked groups, such as the infamous Lazarus group, employing increasingly sophisticated tactics to siphon off vast sums of crypto assets.

A staggering approximately $1.7 billion was illicitly acquired by these nefarious entities tied to the Democratic People’s Republic of Korea (DPRK) in 2022, marking an all-time high in the annals of cryptocurrency theft. However, in a surprising twist, 2023 saw a slight decline in the total stolen amount, hovering just above the $1.0 billion mark. Yet, the frequency of such breaches escalated to 20, the highest ever recorded, underscoring a persistent and evolving threat.

Chart :Chainalysis

Breakdown of Thefts by Category

A detailed analysis by Chainalysis sheds light on the distribution of these thefts, with North Korea-linked hackers predominantly targeting DeFi (Decentralized Finance) platforms, from which they expropriated approximately $428.8 million in 2023. Centralized services, exchanges, and wallet providers also fell victim, suffering losses of over $150 million, $330.9 million, and $127.0 million, respectively.

Also Read: SEC Extends Decision Timeline on BlackRock’s Ethereum ETF, New Verdict Expected in March

Modus Operandi of DPRK-Linked Hackers

The primary strategy employed by these North Korean cyber criminals involves the infiltration of digital wallets through the compromise of private keys or seed phrases, hitting at the very heart of digital asset security. Post-breach, the stolen assets are funnelled to DPRK-controlled wallet addresses, predominantly converted to USDT or Tron, and then laundered into hard currency via high-volume OTC brokers.

In response to mounting international law enforcement pressure and sanctions targeting their preferred currency mixing services, such as Tornado Cash and ChipMixer, these hackers have adapted by shifting their focus to alternative mixers like the BTC service Sinbad. Despite subsequent sanctions on Sinbad, they continue to explore new, more elusive laundering techniques.

Looking Ahead: Crypto Security in 2024

The past two years have witnessed nearly USD billions in crypto assets fall into the hands of North Korean hackers and their ilk, underscoring the critical need for continual advancements in cybersecurity. The crypto community has responded with enhanced security measures and improved tracking and recovery efforts for stolen funds. As we move into 2024, there is a cautious optimism that these efforts will mitigate the impact of the world’s most formidable crypto thieves, ensuring a safer environment for digital asset holders.

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