Thomas Daniels
A report from TRB Labs on January 5th stated that malicious actors from North Korea, specifically the Democratic People’s Republic of Korea (DPRK), were responsible for a third of all cryptocurrency hacks last year. Despite a decrease to $850 million in 2022, North Korean cybercriminals, likely under the direction of the notorious Lazarus Group, misappropriated $600 million in digital assets. This amount could rise by $100 million if late-stage hacks like the $80 million Orbit Bridge breach are linked to Lazarus and other North Korean cybercrime groups.
TRB Labs reports that in the past 24 months, DPRK-affiliated hackers have extracted about $1.5 billion from cryptocurrency ventures and have pilfered close to $3 billion since 2017. These attacks often involve social engineering targeting employees of crypto startups and decentralized platforms. Lazarus compromises targets using stolen private keys and seed phrases, crucial for cryptocurrency security, to carry out unauthorized blockchain transactions. Typically, the pilfered assets are distributed among numerous wallets, with some eventually funneled through cryptocurrency mixers like Tornado Cash or Sinbad.
North Korean hackers also liquidate their loot through over-the-counter (OTC) desks, converting cryptocurrencies like Tether’s USDT into fiat currency. Tether has reportedly heightened its anti-money laundering measures and is collaborating with the U.S. Treasury to thwart illegal finance.
Services like Tornado Cash, Sinbad, and Blender.io, which enable transaction obfuscation, have faced sanctions from the Treasury’s Office of Foreign Assets Control (OFAC). These sanctions are part of a broader strategy by the U.S. government against Lazarus and its activities, which are believed to channel profits into North Korea’s nuclear program. The Financial Crimes Enforcement Network has tagged crypto mixers as a national security concern, and the U.S. is engaging with other global governments on this issue.
The U.S., South Korea, and Japan have launched a joint effort to combat cryptocurrency money laundering by Lazarus and other DPRK-backed entities.
