The United States Department of the Treasury revealed that hackers affiliated with the North Korean government stole $720 million worth of virtual assets, funds allegedly diverted to fuel the development of illegal weapons.
On Wednesday, the U.S. Treasury released a groundbreaking report titled ‘Illicit Finance Risk Assessment of Non-Fungible Tokens.’ In this inaugural report, the U.S. government delved into the potential misuse of Non-Fungible Tokens (NFTs) and NFT platforms by illicit actors for money laundering and financing terrorist activities.
The report specifically highlighted North Korea’s exploitation of virtual assets through extortion. North Korean hackers targeted digital asset projects and firms, amassing over 720 million (approximately 1 trillion won) in 2022 alone. It is assumed that this substantial sum constituted a significant portion of the North Korean government’s revenue derived from malicious cyber activities. These illicit funds were purportedly funneled into the development of ballistic missile programs and weapons of mass destruction.
The report also highlighted instances of North Korean hackers stealing Non-Fungible Tokens (NFTs) during the same year. Citing findings from a blockchain security firm, SlowMist, in December 2022, it revealed that the hackers had created nearly 500 phishing websites resembling NFT products. These sites enticed visitors to disclose their private keys, which were then used to pilfer the victims’ virtual tokens. One of these malicious websites successfully stole over 1,000 NFTs, which the hackers exchanged for Ether, a digital currency, valued at over $350,000 (500 million won).
The assessment cautioned that North Korean hackers possess the capability to exploit NFTs and undertake additional illicit digital activities. “They have participated in various activities within the digital asset ecosystem, suggesting that the group may possess the expertise and resources to exploit NFTs for profit,” stated the U.S. government in the report. “For instance, the North Korean government has deployed thousands of highly skilled information technology workers globally, often engaged in projects related to digital assets.”
Furthermore, the Treasury highlighted the perils of illicit finance through NFTs, citing instances from various countries such as Russia, Syria, and Iraq. It also proposed measures to mitigate these risks.
