As tensions rise on the Korean Peninsula, the U.S., South Korea, and Japan have expressed deep concern over North Korea’s “malicious” cyber activities that support its weapons programs.
Cryptocurrency funds stolen by North Korean hackers have been a key source for financing the sanctions-stricken country’s weapons programs, officials and experts in the United States and its allies say.
U.S. Treasury report on North Korea’s use of DeFi
A report released by the U.S. Treasury Department on April 6 highlights that actors such as North Korea are using decentralized finance (DeFi), a thriving segment in the crypto sector, to transfer and launder their illicit proceeds.
The report warns of the increasing risk of cyberattacks from North Korea and other actors, highlighting that insufficient anti-money laundering and countering the financing of terrorism controls enable the theft of funds.
Brian Nelson, the undersecretary of the Treasury for Terrorism and Financial Intelligence, emphasized the need to address these risks to capture the potential benefits associated with DeFi services.
North Korea’s Denial of Hacking and Cyberattacks
North Korea has denied all allegations of hacking or other cyberattacks. However, the U.S. Treasury report estimates that the country used increasingly sophisticated cybertechniques to gain access to digital networks involved in cyberfinance and steal information of potential value, including to its weapons programs.
Amid North Korea’s rising nuclear and missile threats, South Korea’s nuclear envoy held talks with his U.S. and Japanese counterparts in Seoul this week and condemned the isolated country’s weapons tests.
The envoys’ joint statement expressed concern that overseas North Korean IT workers continue using forged identities and nationalities to evade U.N. sanctions and raise funds for missile programs.
They called on United Nations member states to comply with U.N. Security Council resolutions to repatriate North Korean workers.
North Korea’s stolen cryptocurrency funds
North Korea stole a record sum of cryptocurrency last year and may be sending military communications equipment to Russia, according to an annual report to the U.N. Security Council.
The report estimated the amount of stolen virtual assets from $630 million to over $1 billion, more than double the 2021 total. The panel tracking the implementation of sanctions against Pyongyang warned that the country used increasingly sophisticated cybertechniques to gain access to digital networks involved in cyberfinance and steal information of potential value, including to its weapons programs.
The U.S. and its allies are growing increasingly agitated over North Korea’s cyber crimes and have called on United Nations member states to comply with U.N.
Security Council resolutions to repatriate North Korean workers. As tensions continue to rise, the U.S. and South Korean forces have been conducting a series of annual spring military exercises since March.
North Korea has ramped up its military activities in recent weeks, unveiling new, smaller nuclear warheads and firing an intercontinental ballistic missile capable of striking anywhere in the United States.
The exchange of harsh rhetoric between North Korea, Washington, and Seoul continues to escalate. On Thursday, North Korea accused Washington and Seoul of pushing tensions to the brink of nuclear war through their military drills.
