North Korean Hackers Use Russian Crypto Exchanges to Launder Stolen Funds
A recent study by Chainalysis has revealed evidence of North Korean hackers using crypto exchanges based in Russia to launder stolen funds. So far, these hackers have identified $340 million in cryptocurrency from North Korean hacks. However, it’s important to consider the geopolitical context surrounding these events.
The Geopolitical Context
Chainalysis is an American company that frequently works with the FBI and IRS, making their actions potentially biased due to their close contact with US government authorities. Additionally, Russia and North Korea are allies and have a common alliance with China. As the US considers China and Russia as enemies, it’s crucial to note that Chainalysis may not be impartial despite their objective data analysis.
Nevertheless, North Korea has a group of state hackers dedicated to stealing crypto funds worldwide. They are allegedly using sophisticated cyber attacks to fund nuclear missile programs, according to a United Nations report.
Chainalysis Analysis: Russian Crypto Exchanges Exploited by North Korean Hackers
Chainalysis’ report suggests a collaboration between North Korean and Russian forces supporting North Korea’s extensive state crypto hacking campaign. The study reveals that DPRK-linked hacker groups are increasingly using Russian-based crypto exchanges for laundering stolen cryptocurrencies.
In one case, Chainalysis identified $21.9 million in stolen cryptocurrencies from Harmony Protocol that were transferred to a Russian exchange. However, the exchange did not block these funds as expected. This is not an isolated incident, as Chainalysis found traces of other instances dating back to 2021 where North Korean hackers used Russian exchanges.
The report suggests a potent alliance between North Korean and Russian cybercriminal actors, reducing the chances of asset recovery due to Russia’s non-compliance with law enforcement agencies.
Increase in North Korean Hacks
In 2023 alone, hacking activities associated with DPRK yielded $340.4 million, while the total amount stolen last year exceeded $1.65 billion. This surge in 2022 accounted for almost half of all funds stolen since 2016. Chainalysis reports that 29.7% of cryptocurrencies stolen through hacks this year can be attributed to North Korean state hackers, indicating an increase from the previous year.
The hypothesis is that North Korea uses these attacks to finance its nuclear missile program, with Russia either cooperating or turning a blind eye to benefit from the stolen funds. While other states attempt to identify and block hackers, North Korea has even hired them specifically for stealing cryptocurrency. Russia falls among the collaborationist states that support this illicit behavior by failing to cooperate with international law enforcement agencies.
Hot Take: Collaboration Between North Korea and Russia Fuels Crypto Hacks
The recent findings by Chainalysis reveal a troubling trend of North Korean hackers exploiting Russian crypto exchanges to launder stolen funds. This collaboration between two geopolitical allies raises concerns about the role of Russia in supporting illicit cyber activities. With $340 million identified from North Korean hacks, it’s clear that these cyber attacks pose a significant threat to the security and stability of the crypto industry.
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