For several months, we have observed a real cryptocurrency crash. According Reutersthis situation threatens the funds stolen by North Korea, which relies heavily on crypto-assets to ensure its missile firing tests.
North Korea, specialist in cybercrime
The plunge in the cryptocurrency market has wiped out millions of dollars in funds stolen by North Korean hackers. This crash clearly calls into question the finances of the country who had built a new model dependent on these values. Hit by numerous sanctions, Pyongyang had found no other solution than to professionalize itself in large-scale cybercrime. For several years, North Korea has been behind major scams that have allowed it to steal millions of dollars in crypto-assets.
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State-funded hackers even carried out one of the biggest cryptocurrency heists in history in March 2022. They managed to steal nearly $615 million according to the US Treasury. However, the sudden drop in the value of cryptocurrencies, which began in May amid a broader economic slowdown, complicates Pyongyang’s ability to collect these ransoms. This crash can seriously affect the way North Korea plans to finance its weapons programs according to two South Korean government sources.
Weapons programs are funded with dirty money
Since 2020, North Korea has been testing a record number of missiles. According to the Korean Institute of Defense Analysis in Seoul, all of these firings would have cost 620 million dollars this year. The country is even preparing to resume nuclear testing, in a tense geopolitical context and economic crisis. North Korea’s unlaundered cryptocurrency holdings (which include funds stolen in 49 hacks from 2017 to 2021) saw their value drop from $170 million to $65 million in a matter of days.
According to the North Korean Foreign Ministry, these allegations are American propaganda. Yet there is no doubt about it. Cybersecurity experts have evidence that the March cyberattack on Axie Infinity (the one that allowed hackers to steal $615 million) was indeed carried out by a group of North Korean hackers dubbed Lazarus. If the same attack had taken place today, the ransom would rather be around 230 million dollars. On paper, North Korea actually lost a lot of money.