- North Korean hackers have made away with hundreds of millions in stolen crypto over the years
- The funds are being used for the country’s nuclear program
While the eyes of the world are mostly on North Korea due to its current dictatorship rule and nuclear weapons program, the country has gained notoriety in the crypto world because of its holding of a very large amount of cryptocurrency, one of the highest ever for a single country.
The most obvious explanation that is often given is that it is used for shady activities. However, this has made mostly been speculation for the most part and just what shady activities were being funded was unknown, until now.
A report Wired this week shows that the country has been funding their nukes with the proceeds of crypto stolen by APT 38, the country’s hacker team.
Government backed scam ICOs
It was never believed that all the crypto that was acquired by North Korea was done through legitimate means. However, a clearer picture has been given of the methods through which they were acquired.
An example of this is Vessel Chain, a website which went live in April 2018 and was touted as an entry for investors into the global shipping market. As a means of investment, victims were told to pay for a Vessel Token Offering, which was based on the Ethereum blockchain. By doing this, they could own a part of a shipping vessel and share in its profits.
The website was well-designed and included a business plan claiming that five percent of all shipping to be done worldwide by 2022 would take place through them. The site, however, was a scam and was set up by North Korea to steal funds.
The reason the country needed to steal funds was that global sanctions had been put on their goods and their shipping rights had been restricted and as a result, their economy was failing.
Since they could not earn money legitimately, they opted for other methods, mostly through state-funded hackers and scams such as Vessel Chain. The country was even critiqued for this in a report by the United Nations Security Council.
Nuclear weapons research
The amounts that have been reported stolen by North Korea are staggering. Between January 2017 and September 2018, It was estimated that over $571 million in tokens were stolen from various crypto exchanges.
Most of these were carried out by APT 38, an elite team of hackers sponsored by the state who brought in over a billion dollars in 2018 alone. All these funds are being used to fund the state’s nuclear weapons program.
“Security analysts are unanimous in assessing that the funds stolen by APT 38 – a significant percentage of North Korean GDP – are channelled into the DPRK’s missile and nuclear development programs,” a source told Wired.
It is not clear what the next move will be and whether it will be successful or if the dictatorship will meet a similar fate as the Turkish Government.