The dramatic rise of cryptocurrency theft during the last couple years has become a serious concern for US authorities, who are increasing their efforts to crackdown on bad actors and illicit crypto-related activities.
This past year, crypto-focused hackers have reportedly been able to steal around $3.7 billion worth of digital currencies, with North Korean State-backed cyber threat-actors now taking the lead as the primary entities in many of those online heists. This, according to TRM Labs, a blockchain intelligence firm.
While this year has seen a significant drop in crypto-related hacks when compared to last year, approximately $400 million of digital currency was stolen during Q1 2023, TRM Labs claims.
During the past few years, North Korean State-supported cyber-criminals have consistently targeted the volatile crypto space, typically trying to take advantage of an ecosystem that is not really well understood by many and not properly (or loosely) regulated.
US authorities and the UN have revealed that stolen cryptocurrency funds have become a considerable source of earnings for North Korea’s nuclear and ballistic missile initiative.
Ari Redbord, Global Head of Policy and Government Affairs at TRM Labs, said:
“The problem has gotten very big and very serious with North Korea cybercriminals accounting for about $1 billion in stolen crypto last year. With North Korea, it is not about personal financial gain. Stolen crypto is used to fund weapons proliferation and other destabilizing activity.”
Redbord pointed out that this is now being considered a “serious national security threat.”
An experienced cyber-official in the Biden administration also expressed concerns about North Korea’s emerging role in crypto-related hacks/security incidents.
Anne Neuberger, the Administration’s Deputy National Security Adviser for Cyber and Emerging Tech, stated in 2022 that she was “concerned about North Korea’s cyber capabilities,” while noting that the nation uses “up to a third of [stolen cryptocurrency] funds to fund their missile program.”
Neuberger also mentioned that North Korea’s ongoing expansion of its missile testing has been a major focus area for the administration, which has introduced various enforcement actions to address the nation’s cyber-related threats, such as levying sanctions against criminal entities and seizing stolen crypto-assets.
This past year, the US Federal Bureau of Investigations (FBI) noted that North Korea-backed hacking group called the Lazarus Group, which was notably sanctioned by the US Treasury Department for intentionally targeting vital infrastructure, were allegedly responsible for stealing around $620 million in virtual currency from the online game Axie Infinity.
Crypto-related hacks have become a serious issue for numerous entities, particularly those that are investing in crypto because they might see their savings or investments disappear, industry professionals claim.
Redbord added:
“In the age of the internet, a hack means the loss of usernames and passwords. In the age of crypto hacks, it could mean the loss of life savings or the ability of North Korea or other nation-state actors to fund malign activity.”
Redbord further noted that it’s now more critical for law enforcement agencies and regulatory authorities to try to actively keep up with the fast pace in digital realm as they attempt to address issues related to cybercrime.