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Crypto attacks from North Korea are down by 80%, but that might reverse overnight: Chainalysis

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In the year 2023, malevolent actors associated with the Democratic People’s Republic of Korea (DPRK) managed to abscond with a staggering sum of $340.4 million in cryptocurrency. This figure, while notably lower than the previous year’s staggering $1.7 billion haul, should not lull us into complacency.

The cryptocurrency pilfered by hackers linked to North Korea has witnessed an astonishing 80% decline compared to the year 2022. However, a blockchain forensics firm cautions against interpreting this as a definitive stride towards enhanced security or reduced criminal activity. According to their report dated September 14, 2023, North Korea-affiliated hackers have succeeded in siphoning off a total of $340.4 million worth of cryptocurrency. This marks a stark decrease from the record-breaking $1.65 billion in funds illicitly obtained in 2022.

Chainalysis, in their report issued on September 14, asserts, “The fact that this year’s figures exhibit a decline does not necessarily signal improved security or a reduction in criminal endeavors. It is crucial to remember that 2022 established a dismal and exceptionally high baseline.”

The reality remains that we stand merely one substantial cyber heist away from surpassing the billion-dollar threshold in stolen funds for the year 2023.

Over the past ten days, the Lazarus Group, affiliated with North Korea, has been implicated in two separate cyber intrusions—Stake ($40 million) on September 4 and CoinEx ($55 million) on September 12. Collectively, these breaches have resulted in a staggering loss of over $95 million.

These latest two breaches attributable to North Korea-connected attacks account for approximately 30% of all cryptocurrency funds illicitly obtained through hacking in the current year, as highlighted by Chainalysis.

Simultaneously, Chainalysis has discerned a growing reliance by North Korean hackers on specific exchanges based in Russia for laundering illicitly acquired funds over the past few years. They indicate that North Korea has been engaging with various Russian-based exchanges since 2021. A significant laundering operation encompassed the transfer of $21.9 million in funds from Harmony’s $100 million bridge hack, which occurred on June 24, 2022.

Notably, the Lazarus Group has also employed United States-sanctioned cryptocurrency mixers, Tornado Cash and Blender, in their illicit activities, including the Harmony Bridge hack and other high-profile breaches committed by the group.

At the international level, the United Nations is endeavoring to curb North Korea’s cybercrime tactics, as it is widely believed that the stolen funds are being channeled to support their nuclear missile program.

Meanwhile, the firm expresses hope that an increase in smart contract audits will render the hackers’ endeavors more challenging.

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