On Aug. 27, 2020, The US Justice Department filed forfeiture charges against crypto accounts linked to a hacking operation involving North Korea actors.
According to court documents, US prosecutors seek to seize over 280 BTC and ETH accounts holding digital funds North Korean hackers stole from two cryptocurrency exchanges.
These crypto accounts were allegedly used to siphon approximately $272,000 in cryptocurrency stolen in June 2019. The hackers then handed over their stash to Chinese traders to launder the funds.
The US Treasury Department currently sanctions the Chinese money launderers tied to the North Korean hack for allegedly laundering over $100M stolen from an exchange in March.
Although officials did not reveal the hacked exchanges’ identity, they said that the heist involved alternative crypto and tokens, including PlayGame tokens, and IHT Real Estate Protocol tokens.
The hackers then used a technique known as “chain hopping” to convert the stolen tokens into other crypto types before channeling them into 280 BTC and ETH accounts that federal officials managed to track down.
These accounts are currently frozen, and US officials now want to formally get hold of the funds to return them to the hacked exchanges.
North Korean Hacks A Menace in the Crypto Space
The latest development highlights a disturbing trend where North Korean hackers target crypto businesses for malicious attacks.
UN experts have been vocal about North Korea’s hacking activity, noting that attacks against cryptocurrency exchanges have allowed the Pyongyang regime to generate millions of dollars without any oversight from traditional banking channels.
In a report published last year, UN analysts projected that North Korea had accumulated over $670 million in digital assets from its hacking operations.
What’s more, US officials broke up a similar hacking operation carried out by three North Korean hacking groups in Sept. 2019.
These malicious groups infiltrated various cryptocurrency exchanges during the operation to steal funds to finance the North Korean weapons and missile programs.
North Korea is also believed to be behind the infamous Lazarus group, which specializes in deploying malware software to carry out phishing attacks against the crypto sector.
The US Justice Department Fights Back
The latest move to seize crypto linked to North Korean hackers exposes the notorious links between Pyongyang’s cyber-crime program and Chinese money laundering networks.
According to Assistant Attorney General John Demers, the case against these hackers demonstrates the Justice Department’s continued effort to attribute cyber incidents to malicious hackers.
The forfeiture charges come just weeks after the U.S. Justice Department froze 300 crypto accounts connected to various terror factions such as Hamas and ISIS.