US court orders freezing of 279 crypto accounts tied to North Korea

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As a researcher with a background in cybersecurity and a personal experience in investigating cryptocurrency-related crimes, I find the recent court ruling in the United States regarding the seizure of 279 crypto accounts linked to North Korean operatives both intriguing and concerning.

A US district court in South Carolina has issued an order for the confiscation of 279 cryptocurrency accounts believed to be operated by North Korean entities.

Based on a report from May 10th, Judge Timothy Kelly ordered the seizure and transfer of certain accounts to U.S. authorities due to suspected links to North Korean cryptocurrency heists. The exact financial sum relevant to this case has yet to be disclosed.

As a crypto investor, I’d rephrase that as: Back in August 2020, the U.S. authorities brought a case against suspected North Korean entities. These entities were accused of transferring ill-gotten cryptocurrencies to exchanges located outside the United States or to wallets controlled by their foreign accomplices.

At first, the investigation focused on 280 accounts. However, two years after the filing, one of those virtual accounts was removed from the case.

The cryptocurrency theft proceeds were disguised, then transformed into regular currency, enabling North Korea to evade international sanctions.

I, as a cybersecurity lecturer at the University of the Sunshine Coast, have observed that the U.S.’s efforts in preventing and recovering from crypto thefts have yielded limited results.

Desmond points out that thwarting North Korean operatives beyond the usual framework is a complex task.

In a recent judgement, 134 virtual wallets were ordered to be seized in relation to two cryptocurrency exchange hacks that occurred in 2019. The thieves made off with more than $270,000 from one of these exchanges and concealed the stolen funds through a complex series of transactions involving multiple other exchanges using a method called “chain hopping.”

Illicit funds are shifted through a series of transactions, known as chain hopping, which involve converting them into various types of cryptocurrencies. This is accomplished using fabricated Know Your Customer (KYC) data and concealing locations via Virtual Private Networks (VPNs). According to court records, several IP addresses linked to this scheme have previously been associated with cyberattacks orchestrated by North Korean hackers.

“Recently, following a court order in March, I’ve come across the seizure of over a hundred and forty-five crypto accounts. These accounts were reportedly used to launder stolen funds from four different crypto exchanges between the years 2018 and 2019.”

Around $330 million in total was taken by the attackers. The largest heist, amounting to $250 million, occurred on a singular platform.

In the year 2023, North Korean cybercriminals caused a staggering $430 million worth of damages in cryptocurrencies. As revealed in a March report by the United Nations, approximately 40% of North Korea’s financial resources for weapons development stemmed from these cyberattacks.

In response to recent advancements, the government has heightened its surveillance and taken action against crypto mixing platforms.

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2024-05-13 12:33