17.01.2021

North Korea Denies It Hacked $2 Billion in Fiat and Crypto

Reuters reported on Sunday that a statement from the National Coordination Committee of the DPRK for Anti-Money Laundering and Countering the Financing of Terrorism accused the U.S. and “other hostile forces” of “spreading ill-hearted rumors.”

North Korea has denied a recent U.N. report suggesting it was behind major hacks of banks and cryptocurrency exchanges that reaped around $2 billion for the nation’s weapons programs.

“Such a fabrication by the hostile forces is nothing but a sort of a nasty game aimed at tarnishing the image of our Republic and finding justification for sanctions and pressure campaign against the DPRK,” the agency said via a spokesperson. The news was first reported by North Korea’s state-run news agency, KCNA.

The U.N. report – reportedly researched by “independent experts” and presented to the U.N. Security Council North Korea sanctions committee at the end of July – said that North Korea has used “widespread and increasingly sophisticated” hacks to collect roughly $2 billion, which is laundered over the web.

The experts are reportedly investigating “at least 35 reported instances of DPRK actors attacking financial institutions, cryptocurrency exchanges and mining activity designed to earn foreign currency” – activities that span around 17 nations. Many of North Korea’s hackers are said to operate under the Reconnaissance General Bureau, an intelligence agency that handles clandestine operations.

Attacking crypto exchanges allows North Korea “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector,” the U.N. report said.

The notorious hacking group Lazarus has been claimed to be working for the state and linked to major crypto exchange breaches, as well as attacks in the banking world, including a $81 million hack of the Bangladesh central bank three years ago.

UK Police Arrest Teen for Hacking Unreleased Music to Sell for Crypto

City of London Police have arrested a 19-year-old citizen suspected of hacking major music acts in a bid to steal unreleased songs and sell them for digital currency, Canadian daily newspaper The Vancouver Sun reported on Sept. 13.

The Manhattan District Attorney’s office initiated an investigation after receiving complaints from management companies of recording artists. Commenting on the matter, Detective Inspector Nick Court from the City of London Police Intellectual Property Crime Unit stated:

“Today’s action marks a significant point in our investigation into the individuals responsible for stealing music and selling it on illegal streaming websites, worldwide.”

Crypto facilitates crime?

Criminals have increasingly used cryptocurrencies for illicit activities, according to blockchain security company CipherTrace. In 2019, bad actors primarily used Bitcoin (BTC) for buying and selling illegal drugs, weapons, as well as cyber and banking credentials on darknet markets.

Neil Wals, chief of the United Nations Office on Drugs and Crime Global Cybercrime Program, warned last month that cryptocurrencies have made combating money laundering significantly harder. He believes that cryptocurrencies add a layer of secrecy, which can facilitate crime.

Entertainment embraces digital currencies

Nonetheless, digital currencies are quietly entering the entertainment sector, with its major players exploring and embracing the new asset class. Earlier in September, Korean pop music giant SM Entertainment revealed plans to build its own cryptocurrency and blockchain. SM Entertainment reportedly expects the blockchain platform to bridge the physical and virtual world.

Global media giant Warner Music Group will also be creating digital assets using new public blockchain backed by CryptoKitties creator. The company’s recent investment of not less than $1 million in the form of a convertible security intends to unlock a new method for sharing Warner Music’s content as well as a new type of engagement with artists.

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