[Weekend Briefing] Kakao crash: Unplugging a nation

By Kuksung Nam and Dain Oh, The Readable
Oct. 21, 2022 4:53PM KST

Hello, this is Kuksung Nam and Dain Oh in South Korea. An eight-hour fire at a data center has brought about unexpected consequences for South Korea, unplugging critical services for at least three days. KakaoTalk is an instant messaging application that 92% of South Koreans access daily. The South Korean president considered the Kakao outage to be a threat to national security, which led the Office of National Security to launch a task force. The company’s shares plunged, and a class action lawsuit has been mentioned by users. The Kakao crash shows how much impact an application has on our daily lives. This also proves that the line between physical security and cybersecurity is blurred in this era.

The Readable has picked some of the key facts which have been discovered so far this week regarding the Kakao incident. Moreover, we have added this week’s news articles for our subscribers. Have a great weekend!

1. Key facts of the Kakao outage

1) KakaoTalk is a popular mobile messenger company in South Korea, dominating the country’s mobile service market by holding 92% of the population as its users.

2) On October 15, a fire broke out at an SK C&C data center in Pangyo, which is often referred to as South Korea’s Silicon Valley, where Kakao’s data is stored and managed.

3) Numerous companies and websites suffered outages and disruptions to services including online banking, electronic commerce, ride hailing and more. The fire was extinguished by late Saturday evening.

4) The Ministry of Science and ICT and the Korea Internet & Security Agency discovered an email which induced users to install malicious software, disguised as an official Kakao Talk install file.

5) South Korean President Yoon Suk-yeol ordered his team of chief secretaries on Monday to launch a task force dedicated to national security in response to the chaos caused by the Kakao outage.

6) The local news outlets reported that there are several users who are considering a class action lawsuit against the company over the disruption of services.

7) Kakao’s co-CEO, Namkoong Whon, announced on Wednesday that he will resign from the post and apologized for the massive outage that caused nation-wide confusion.

8) The Kakao’s services were back to normal five days after the fire. The company said in a statement on Thursday that they have completed the restoration.

9) The South Korean police are confiscating the SK C&C data center on Friday to investigate the cause of the fire.

10) Shares of Kakao Corp has remained in a downtrend since June of last year. Kakao shares were also affected by the fire, plunging on Monday to their lowest valuation since May 2020.

2. South Korea shuts down website aimed at hacking Kakao users

Authorities said on Monday that it had shut down a malicious website that was abusing the nation-wide confusion caused by a fire at a data center of South Korea’s popular mobile messenger company, Kakao Talk.

The Ministry of Science and ICT said in a press release that the ministry and the Korea Internet & Security Agency discovered an email which induced users to install malicious software, disguised as an official KakaoTalk install file. The ministry stated that it had immediately shut down the website that was spreading these emails.

However, authorities warned users that various cyberattacks could be deployed to extort users’ credentials amongst the disruption of Kakao service. To read the original reporting, click here.

3. South Korea to launch national security TF after Kakao outage

South Korean President Yoon Suk-yeol ordered his team of chief secretaries on Monday to launch a task force dedicated to national security in response to the chaos which unplugged the nation for at least three days.

The task force will be led by the Office of National Security. Kim Sung-han, the National Security Adviser, will preside at upcoming meetings to inspect nationwide postures of cybersecurity. The task force will bring different ministries together, including the Ministry of Science and ICT, the Ministry of National Defense, the National Intelligence Service, and the offices of the prosecution and police service. To read the original reporting, click here.

4. Police arrests two suspects in Philippines for phone scam

The South Korean police arrested an alleged leader and second in command of a criminal gang based in the Philippines. The suspects were involved in cross-border telephone fraud targeting South Koreans from 2017 to 2021.

The Korean National Police Agency said in a press release on Thursday that the two suspects, who are both in their 30s, were arrested in the Philippines in September and were extradited back to South Korea on October 20.

The police stated that the group impersonated financial officials and tricked victims into transferring money by telling the victims that they could borrow money at much lower interest rates if they changed their mortgage lender. The police investigation shows that over 10.8 billion won ($7 million) was sent to the gang from 562 victims over the past years. To read the original reporting, click here.

5. Dark web drug squad is initiated by Korean law enforcement

As drug trafficking is rising as a nationwide problem, South Korean prosecutors will form a drug squad which will specifically monitor the dark web and its illegal drug trade, reported local news outlets referring to an official document submitted by the Supreme Prosecutors’ Office on Thursday.

According to the reports, the Supreme Prosecutors’ Office plans to launch a dedicated team of 15 personnel in three different regions in order to restrain drug trafficking which allegedly occurs through the dark web. The team will be installed in the District Prosecutors’ Office of each region, including Seoul, Incheon, and Busan, as early as January 2023. These regions are the gateways to South Korea since they have international airports and harbors.

The drug squad on the dark web will reportedly focus on analyzing internet search records and IP addresses, in addition to tracking cryptocurrency. To read the original reporting, click here.

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The cover image of this article was designed by Areum Hwang.

Kuksung Nam is a cybersecurity journalist for The Readable. She covers cybersecurity issues in South Korea, including the public and private sectors. Prior to joining The Readable, she worked as a political reporter for one of the top-five local newspapers in South Korea, The Kyeongin Ilbo, where she reported several exclusive stories regarding the misconduct of local government officials. She is currently focused on issues related to anti-fraud, as well as threats and crimes in cyberspace. She is a Korean native who is fluent in English and French, and she is interested in delivering the news to a global audience.

Dain Oh is an award-winning cybersecurity journalist based in South Korea and the founding editor-in-chief of The Readable by S2W. Before joining S2W, she worked as a reporter for The Electronic Times, the top IT newspaper in Korea, covering the cybersecurity industry on an in-depth level. She reported numerous exclusive stories, and her work related to the National Intelligence Service led to her being honored with the Journalist of the Year Award in 2021 by the Korea Institute of Information Security and Cryptology in a unanimous decision. She was also the first journalist to report on the hacking of vulnerable wallpads in South Korean apartments, which later became a nation-wide issue.