North Korean hackers embezzled nearly USD 400 million worth of cryptocurrencies through cyberattacks in 2021, according to new data from Chainalysis. The type of stolen cryptocurrency has also seen a sea change, according to the January 13 report by the blockchain analytics firm.
The report stated that North Korea's 2021 attacks primarily targeted "investment firms and centralized exchanges, and made use of phishing baits, code exploits, malware and advanced social engineering" to maliciously acquire the funds.
The stolen cryptocurrency being used by North Korea was believed to evade economic sanctions and help fund nuclear weapons and ballistic missile programs, according to a UN Security Council report.
The threat North Korea poses to global crypto platforms has become ever-present. Chainalysis now refers to Hermit Kingdom hackers such as the Lazarus Group as Advanced Persistent Threats (APT). These threats have increased over the past three years, following the all-time high of over USD 500 million in stolen cryptocurrencies in 2018.
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Chainalysis reported that the funds were meticulously laundered. Methods range from chain hopping, the “Peel Chain” method, and more recently, hackers have employed a complicated system of swapping and mixing coins.
Chainalysis used the August 19, 2021 Liquid.com hack in which USD 91 million worth of cryptocurrency was stolen as an example of the typical way North Korean hackers launder funds. They first exchanged ERC-20 coins for Ether (ETH) on decentralized exchanges. Then the ETH was sent to a mixer and exchanged for Bitcoin (BTC), which was also mixed. Finally, BTC was sent off the mixer to centralized Asian exchanges as a likely fiat outlet.
