Disturbing information is coming out of the latest report by blockchain company Chainalysis. The study shows hackers based in North Korea are increasingly using Russian crypto exchanges reportedly involved in laundering activities. Moreover, the research revealed that the cyber underworld partnership is active since 2021.
N Korea Linked Group Steals Over $300 Million
Malicious actors transferred $21.9 Million worth of crypto funds stolen from Harmony Protocol to a Russian exchange involved in illegal activities. In January 2023, Federal Bureau of Investigation (FBI), the U.S. intelligence and security service, confirmed North Korean state-sponsored Lazarus and APT38 hacking groups were behind the act.
As per Chainalysis, the cybercriminal alliance presents a challenge to global authorities. The report reads, “While the types of mainstream centralized exchanges North Korean hackers have previously relied upon typically cooperate, Russia’s exchanges and law enforcement agencies have a track record of non-compliance, significantly reducing the chance of asset recovery.”
Year-to-date, malicious groups that have known links with the Democratic People’s Republic of Korea (DPRK) have stolen $340 Million worth of crypto assets. Last year, these groups purloined over $1.65 Billion in cryptocurrencies according to the report. Moreover, Chainalysis called 2022 the biggest year ever for crypto hacking with the sector losing grasp of $3.8 Billion.
North Korean hackers account for nearly 30% of crypto hacks this year. However, crypto-related attacks have declined in contrast to 2022, so far. According to a report published in May 2023 by TRM Labs, a blockchain intelligence company, average hack size went from an average of $30 Million in 2022 to $10.5 Million so far into 2023.
Notably, TRM Labs warned that the decline in hacks between 2022 and 2023 must not be mistaken for improved security in the sector. Last year’s churn includes significant hacks including the Ronin Bridge attack carried out by Lazarus Group. The attack cut out a substantial sliver from the treasury of Sky Mavis, creators of Ronin Bridge and Axie Infinity.
Crumbling User Trust From The Sector
Lastly, the report calls for combatting blockchain-based crimes. Despite the cross-border nature of cryptocurrencies, its underlying technology can cater to investigation of crypto transactions. Blockchain’s decentralized nature allows users to monitor activities, however, some expertise is required to interpret the data.
Most nations hold skepticism towards these assets while countries like El Salvador and the Central African Republic (CAR) embrace them. Unlike fiat money, authorities do not back digital assets. The concept of doing away with middlemen is what attracts several users to cryptocurrencies.
A PriceWaterhouseCoopers (PwC) report highlights consumer trust in the crypto sector. It says, “We have witnessed a loss of consumer trust, following a number of high-profile crypto firm failures, fraud, scams and mismanagement of customer funds.” Adding that, “This has brought immediate sharp focus to regulators.”
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
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