279 crypto accounts linked to North Korea frozen by US court
A US district court in Columbia has issued an order for the confiscation of 279 cryptocurrency accounts that are believed to be linked to North Korean operatives. Justice Timothy Kelly ruled on May 10 that these accounts should be frozen and handed over to the US authorities due to their alleged involvement in North Korean crypto thefts. The exact amount of money involved in the case has not been disclosed.
This ruling is a result of a case filed by the US government in August 2020. The case revolves around North Korean-affiliated entities transferring illicit crypto funds to exchanges outside of the United States or to unhosted wallets controlled by foreign conspirators. Initially, the case targeted 280 accounts, but one virtual account was dropped from the case two years after it was filed.
The money laundering operation in question aimed to conceal the origins of the stolen cryptocurrencies and convert them into fiat currency, allowing North Korea to circumvent sanctions. According to Dennis Desmond, a cybersecurity lecturer at the University of the Sunshine Coast, the US has had little success in deterring or recovering stolen cryptocurrencies. Countermeasures against North Korean operatives who operate outside the traditional system are challenging to implement effectively.
In addition to the seizure of the 279 accounts, the recent ruling also ordered the confiscation of 134 virtual wallets connected to two cryptocurrency exchange hacks that occurred in 2019. The perpetrators of these hacks stole over $270,000 from one platform and disguised the funds through a series of transactions involving other exchanges, a technique known as “chain hopping.”
Chain hopping involves the laundering of illicit funds by converting them into different types of cryptocurrencies, using falsified KYC information, and employing VPNs to conceal locations. Court documents revealed that many of the IP addresses involved in this process were the same as those used in previous heists by North Korean attackers.
This recent development follows a previous ruling in March, where Justice Kelly ordered the confiscation of 145 crypto accounts involved in laundering stolen funds from four cryptocurrency exchanges between 2018 and 2019. The attackers were able to steal approximately $330 million in funds, with the largest attack resulting in the theft of $250 million from a single platform.
North Korean hackers were responsible for $430 million in crypto losses in 2023 alone, according to a United Nations report published in March. The report highlighted that the nation generates about 40% of its revenue for weapon development through these cyberattacks.
In response to these developments, the government has heightened its scrutiny of the cryptocurrency sector and has taken action against crypto mixing services.
Read more: North Korean hackers target crypto firms with ‘Durian’ malware, Kaspersky confirms
