North Korean hackers stole US$2 billion to fund weaponry, UN report reveals

Experts’ report said large-scale attacks against cryptocurrency exchanges by North Korea allow the country ‘to generate income in ways that are harder to trace’

North Korea also continued to violate sanctions by procuring items for the production of nuclear weapons and other weapons of mass destruction

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Large-scale attacks against cryptocurrency exchanges by North Korea allow the country to generate income. Photo: Reuters

Published: 9:07am, 6 Aug 2019Updated: 10:12pm, 6 Aug 2019

A panel monitoring UN sanctions says North Korean cyber experts have illegally raised money for the country’s weapons of mass destruction programmes “with total proceeds to date estimated at up to US$2 billion”.

The experts said in a new report to the Security Council that North Korea is using cyberspace “to launch increasingly sophisticated attacks to steal funds from financial institutions and cryptocurrency exchanges to generate income” in violation of sanctions.

Cryptocurrency exchanges deal in virtual money like bitcoin, Ethereum and Ripple which use a technology called blockchain. There have been some high-profile cryptocurrency exchange heists including a hack reported last month by Tokyo-based Remixpoint, which runs the BITPoint exchange, causing the loss of 3.5 billion yen, or US$32 million, worth of virtual money.

The experts’ report said large-scale attacks against cryptocurrency exchanges by North Korea allow the country “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector”.

North Korea also continues to have access to the global financial system, “through bank representatives and networks operating worldwide” as a result of “deficiencies” by UN member states in implementing financial sanctions and Pyongyang’s “deceptive practices,” the experts said.

The panel said North Korean financial institutions, including banks under UN sanctions, “maintain more than 30 overseas representatives controlling bank accounts and facilitating transactions, including for illicit transfers of coal and petroleum”.

It said the banks and their representatives “make use of complicit foreign nationals to obfuscate their activities”.