North Korea may be creating its own skilled cadre of hackers to steal and mine cryptocurrencies to gain revenue

North Korea may be producing its own hackers and cryptocurrency miners as a means of collecting much needed revenue, as well as perhaps using cryptocurrency as a means of payment for illegal transactions as the country is subject to severe sanctions.

North Korea accused of stealing cryptocurrencies as a revenue source

A group of North Korean hackers called Anadarei are accused of breaching a server in South Korea and stealing 70 Monero coins during last summer according to an analysis carried out by the South Korean government. The coins were valued in total at about $25,000 US.

Collecting ransoms in bitcoin?

North Korea has also been accused by the U.S. of having orchestrated the Wannacry ransom attacks back in May. The attacks crippled more than 300,000 servers and victims had to pay a ransom in bitcoin to gain access to their files.

The UN, often at the urging of the U.S., has continually increased sanctions on North Korea making it difficult for it to earn money through exports . As a result, the country may think it has to resort to illegal means to raise funds and also no doubt to use cryptocurrencies as a means of payment. North Korea is cut off from using regular financial institutions. However, it can make payments anonymously using cryptocurrencies such as Monero.

South Korean concerns about the use of cryptocurrencies as an economic weapon by North Korea may lead the South Korean government to initiate a crackdown on their use.

Monero

Monero (XMR) is an open source cryptocurrency created back in April of 2014. The coin focuses on privacy and decentralization. Wikipedia says:

Monero aims to improve on existing cryptocurrency design by obscuring sender, recipient and amount of every transaction made as well as making the mining process more egalitarian.[3]The focus on privacy has attracted illicit use by people interested in evading law enforcement.[4][5] The egalitarian mining process made it viable to distribute the mining effort opening new funding avenues for both legitimate online publishers and malicious hackers who covertly embed the mining code into websites and apps.[6]

Kwak Kyoung-Ju head of the Financial Security Institute in South Korea noted that it is much harder to trace Monero than competitors such as Bitcoin and Ethereum. He said that this makes it easier to use to launder money.

Andarei alleged to use stolen computer power for mining Monero

As a recent Digital Journal article reports, the North Korean hacker group Andarei allegedly used computer power from South Korean servers to mine Monero coins without the South Koreans being aware what was happening.

North Korean hackers looking for funds over government secrets

Kwak said: "Andariel is going after anything that generates cash these days. Dust gathered over time builds a mountain."

Lee Dong-geun chief analyst at the government-run Korea Internet Security Center in Seoul said that the main emphasis of North Korean cyber attacks had changed: "North Korean threats meant attacks on the government and national defense, but now they are looming very large over the private sector. They are primarily after information for financial ends.”

While accusations by South Korea and the U.S. against North Korea about cyberattacks may sometimes lack independent verification, it is plausible, given the strict sanctions against the country, that the North developing a skilled cadre of hackers to raise revenue through hacking and mining cryptocurrencies. It could reasonably also use cryptocurrencies such as monero as an alternative payment system to the international banking system.

Previously published in Digital Journal