MESSAGE
| DATE | 2020-08-27 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [Hangout - NYLXS] =?utf-8?q?news_worth_reporting_-_Pyongyang?=
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wsj.com
U.S. Moves to Seize Cryptocurrency Accounts Linked to North Korean Heists
Ian Talley and Dustin Volz
6-7 minutes
WASHINGTON—U.S. authorities on Thursday moved to seize 280
cryptocurrency accounts they said were used by North Korean hackers who
stole more than a quarter billion dollars from exchanges around the
world, including U.S.-based Algorand.
The U.S. Justice Department said the accounts targeted in the civil
forfeiture filing were used by the North Korean hackers and their
Chinese agents to launder some of the money stolen from more than a
dozen virtual currency exchanges, a series of cyber thefts over the past
two years amounting to more than $300 million.
“Today’s action publicly exposes the ongoing connections between North
Korea’s cyber-hacking program and a Chinese cryptocurrency money
laundering network,” said Acting Assistant Attorney General Brian
Rabbitt of the Justice Department’s Criminal Division.
The filing is the first publicly announced case of a U.S. virtual
currency exchange, Algorand, being targeted by North Korea, officials
said. Algorand didn’t immediately respond to a request for comment.
Along with a flurry of other recent actions taken by other federal
agencies, Thursday’s filing shows that even while top Trump officials
say tensions with nuclear-armed Pyongyang have cooled, U.S.
law-enforcement and national-security officials view North Korea as a
significant threat to national security and the global financial system.
Pyongyang’s regime uses the proceeds from cyber theft to fund its
military and its nuclear-weapons program, according to United Nations
experts and U.S. officials.
“North Korea flouts sanctions by hacking international financial
networks and cryptocurrency exchanges to generate revenue that funds its
weapons development activities,” Gen. Paul Nakasone, the commander of
U.S. Cyber Command, wrote in a Foreign Affairs article co-authored with
a senior Cyber Command adviser.
North Korea’s mission to the U.N. didn’t immediately respond to a
request for comment, but officials have previously denied the country’s
agents have hacked financial institutions.
Justice Department and Internal Revenue Service agents said North Korean
hackers used malware to gain entry to the exchanges and steal from user
accounts, then laundered the proceeds through Chinese middlemen. U.S.
officials said the hackers were associated with one of the hacker
collectives the U.S. says is run by North Korea’s intelligence bureau,
the so-called Lazarus Group, leaving digital footprints that led back to
the country.
In March, the Justice Department indicted and sanctioned two Chinese
nationals accused of helping North Korean hackers launder the money
stolen from the cryptocurrency exchanges. Federal prosecutors at the
time accused them of helping the hackers convert the funds, including
through exchanging the bitcoin for prepaid Apple iTunes gift cards. The
U.S. attorney’s office in Washington also filed a civil action to seize
related assets allegedly held in 113 virtual currency accounts, and the
U.S. Treasury Department simultaneously blacklisted the two men.
Within hours of that March forfeiture filing, authorities saw accounts
linked to the alleged thefts that had been dormant for months being
flushed, said Assistant U.S. Attorney Zia Faruqui. U.S. agents tracking
money movements through those accounts discovered that the hackers had
targeted several more currency exchanges and were laundering the
proceeds from those cyberheists through accounts controlled by the same
Chinese bitcoin traders, he said.
Jessi Brooks, another assistant U.S. Attorney in the national-security
division, said Thursday’s case reflects the department’s decision to
target the use of virtual currency platforms for money laundering by
nation states and terrorists.
U.S. officials say they have documented a pickup in North Korea’s
cyberattacks in recent months.
U.S. and U.N. officials say North Korea relies on a range of
sophisticated cyber capabilities to evade global sanctions and expand
its regime’s geopolitical relevance, as the country is otherwise shut
out from the international financial system.
On Wednesday several U.S. agencies issued a joint alert warning that
hackers tied to the North Korean government are trying to rob banks
across the globe by draining ATMs and initiating fraudulent money
transfers, as part of a resurgent cash-grab campaign that authorities
said dates back to February of this year.
Underscoring the view that North Korea’s cyber thefts are a
national-security threat, a U.S. Army report published last month
described North Korea’s multibillion-dollar cyber-theft activities as a
critical part of Pyongyang’s electronic warfare operations. It estimates
the country has an estimated 6,000 hackers within its special
cyberwarfare unit, many positioned around the world. The report said
some of the hackers are members of the groups named by the Justice
Department, the U.S. Treasury and other agencies as responsible for
hacks against the global financial system.
The North Korean hackers’ methods of pilfering funds include direct
hacking of banks and cryptocurrency exchanges, cryptocurrency mining
operations, and low-level internet scams such as automating activity in
online computer games to cash out in-game points or items for money.
Write to Ian Talley at ian.talley-at-wsj.com and Dustin Volz at
dustin.volz-at-wsj.com
Corrections & Amplifications
U.S. officials said North Korean hackers stole more than a quarter
billion dollars from cryptocurrency exchanges around the world. An
earlier version of this article incorrectly gave the figure as more than
$1 billion. (Corrected on Aug. 27.)
--
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