South Korea has accused North Korea of carrying out the 2019 hack on the cryptocurrency exchange Upbit. The breach led to the theft of 342,000 ETH, which was valued at $41.5 million at the time. Today, the stolen Ethereum is worth over $1 billion, making this one of the largest cryptocurrency thefts connected to North Korea.
Evidence Points to North Korea
The South Korean National Police Agency revealed its findings on Thursday. According to investigators, they reached their conclusion after analyzing extensive evidence.
Detailed Analysis Uncovers Culprit
Authorities identified North Korea as responsible by reviewing IP addresses, patterns of virtual asset flows, and specific language used by the hackers. This conclusion, supported by the FBI, represents the first direct link between North Korea and a cryptocurrency heist.
Laundering and Transfers of Funds
The hackers laundered about 57% of the stolen ether. They converted it to bitcoin at discounted rates using three exchanges they reportedly controlled. Additionally, they distributed the remaining funds across 51 overseas platforms.
Collaborative Efforts Lead to Recovery
In a joint operation with Swiss authorities, South Korea recovered 4.8 BTC. This amount was traced to a Swiss-based cryptocurrency exchange.
The FBI has consistently highlighted North Korea’s cybercrime activities. The agency has connected North Korean hackers to major cryptocurrency thefts, such as the $100 million Harmony Horizon Bridge attack and the $600 million Ronin Bridge breach. Earlier this year, the FBI warned of North Korea’s increased focus on exploiting Web3 vulnerabilities to steal digital assets.
Countering North Korea’s Tactics
Regional Training Programs
Last month, the South Korean Foreign Ministry announced training programs for ASEAN countries. These initiatives aim to improve defenses against North Korean crypto thefts. Seoul and Washington have repeatedly accused North Korea of deploying government-trained hackers to steal Bitcoin and other cryptocurrencies.
Industry Experts Identify Hacker Groups
Blockchain analytics firms and IT companies have also implicated groups like Lazarus in these crimes. Their findings strengthen accusations against Pyongyang’s role in these activities.
Growing Interest in Crypto Among South Koreans
A Shift Away From Pensions
A recent survey revealed that most South Koreans aged 20-39 distrust the national pension system. Over three-quarters of respondents preferred investing in cryptocurrency or stocks instead. Additionally, more than half of those creating their own retirement plans rely on these investments.
Politicians Join the Crypto Movement
Even political candidates in South Korea have exposure to digital assets. According to a report by Yonhap, about 7% of election candidates disclosed owning cryptocurrency.
Plans to Tax Cryptocurrency
The Democratic Party of Korea (DPK) recently confirmed its plans to implement cryptocurrency taxation starting in January 2025. The tax, set at 20% on gains (or 22% with local taxes), was delayed twice due to opposition from investors. Although some proposals suggested further delays, the government now plans to move forward without additional postponements.
South Korea’s efforts to regulate cryptocurrency reflect its commitment to preventing illegal activities and ensuring a secure financial environment.
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