In the world of cryptocurrencies, 2023 seems to bring some good news: crypto thefts by North Korean bad actors have plummeted by a staggering 80% compared to the previous year, down from a jaw-dropping $1.7 billion in 2022 to $340.4 million. However, it’s vital to interpret these statistics with caution.
Blockchain forensics firm Chainalysis released a report on September 14, cautioning against hasty optimism. They emphasized that the reduction in stolen funds shouldn’t be viewed as a sign of improved security or diminished criminal activity. Instead, it serves as a stark reminder of the exceptionally high benchmark set in 2022.
“In reality, we are only one large hack away from crossing the billion-dollar threshold of stolen funds for 2023.”
Recent events corroborate this concern. Over the past ten days, North Korea’s Lazarus Group orchestrated two separate hacks: one targeting Stake, resulting in a $40 million loss on September 4, and another targeting CoinEx, which led to a $55 million loss on September 12. These incidents alone accounted for over $95 million in losses.
Crypto Defenses: Guarding Against Social Engineering
Shockingly, North Korea-linked attacks have constituted around 30% of all cryptocurrency funds stolen through hacks this year, according to Chainalysis.
Erin Plante, Chainalysis’ Vice President of Investigations, expressed her concerns, emphasizing that Lazarus continues to be a prolific crypto thief, and the national security threat posed by North Korea only adds to the worry.
To bolster defenses against these relentless attacks, cryptocurrency companies need to educate their employees on countering social engineering tactics often deployed by hacker groups. These tactics exploit human nature’s trust and carelessness to infiltrate corporate networks.
Simultaneously, Chainalysis revealed another troubling trend. North Korean hackers have increasingly relied on Russian-based exchanges to launder illicit funds in recent years. This partnership has been in place since 2021 and has involved substantial sums of money, including $21.9 million from Harmony’s $100 million bridge hack in June 2022.
Furthermore, the Lazarus Group has utilized United States-sanctioned cryptocurrency mixers like Tornado Cash and Blender in high-profile hacks, including the Harmony Bridge hack. This added layer of obfuscation complicates efforts to trace and recover stolen funds.
Recognizing the grave implications of these cybercrimes, the United Nations is actively working to curtail North Korea’s illicit activities on the international stage, as there is strong evidence suggesting that the stolen cryptocurrency funds are being used to support the country’s nuclear missile program.
In conclusion, while the reduced amount of cryptocurrency stolen by North Korean hackers in 2023 may offer a brief respite, it should not lead to complacency. The crypto world remains susceptible to sophisticated attacks, and vigilance, education, and international cooperation are crucial to mitigating this persistent threat. Moreover, increased smart contract audits may provide a valuable additional layer of security in the ongoing battle against cybercriminals.