UN: North Korea Sees Record Proceeds From Crypto-Related Hacks 

In 2022, cryptocurrency thefts and hacks hit a new high, fueled by the bear market and generally gloomy investor sentiment surrounding the industry. And, as one of the world’s biggest sponsors of hacks and security breaches, it’s no surprise that the North Korean government had a prosperous year in 2022 as well.

A Good Year for the Bad Guys 

Recently, Reuters reported that North Korean hackers had been the biggest beneficiaries of crypto hacks and security breaches in the market. The news medium cited a confidential United Nations report, revealing that Pyongyang received more money from crypto hacks in 2022 than any other year. 

The report, which was submitted to a 15-member committee on North Korea sanctions, found that hacker groups linked to the rogue state were responsible for anywhere between $630 million and $1 billion in stolen digital assets last year. These funds were obtained after targeting the networks of foreign defense and aerospace companies, many of which appeared to have embraced cryptocurrencies for payments or who were forced to make ransom payments for their confidential files in crypto.

Besides the surge in proceeds, the report also noted that North Korean-linked hacker groups have been employing more sophisticated tactics to gain access to networks and steal confidential information of enormous value. These groups have continued to target companies involved in digital finance, stealing valuable information and blackmailing their victims into ransom payments.

The report appears to have been corroborated by separate findings from Chainalysis – one of the biggest forensic analysis companies in the blockchain space. A report from the Binance-owned company last week revealed that crypto hacks in 2022 hit a record of $3.8 billion, $500 million more than the numbers recorded the year before. 

As Chainalysis believes, North Korean hacker groups were the biggest beneficiaries of these hacks, with at least $1.7 billion going to them.  

North Korea’s Reliance on Hacked Funds

It should also come as no surprise that the country has been linked to 2022 largest hacking event. Back in March 2022, popular crypto gaming platform Axie Infinity was the victim of a massive security breach on its Ronin bridge, which transports tokens between its native network and the Ethereum blockchain. 

The hack, which saw Axie Infinity lose about $625 million in digital assets, nearly crippled the entire game and was a massive loss for an industry on the rise. Months later, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it had linked the hack to the Lazarus Group – one of the most notable hacking groups in the world, which has, in turn, been extensively linked to Pyongyang. 

At the time, the OFAC imposed sanctions against wallets belonging to the Lazarus Group as part of an investigation by the FBI into the threat posed by North Korea and other state-sponsored hacking groups. However, a significant portion of the funds had already been laundered.  

North Korea has always been on the radar of internal law enforcement and investigators for its reliance on cryptocurrency theft. With the country still facing crippling sanctions from the international community, it is believed to have turned to crypto-related hacks to continually fund its weapons program. 

And with the North Koran economy having an estimated gross domestic product (GDP) of $18 billion, it’s safe to say that the government appears to also rely on these hacks for a significant portion of its economic output.