Illicit activities surrounding the digital assets medium found its way back in the headlines as a couple of Chinese individuals were sanctioned by the United States for money laundering accusations tied to a multi-million cryptocurrency fraud.
An official report from the U.S Department of the Treasury’s Office of Foreign Assets Control (OFAC) recently stated that Tian Yinyin and Li Jiadong played an influential part in moving more than $100 million in stolen crypto assets in a ‘cyber-intrusion’ against a digital asset exchange back in 2018. The hack was linked back to Lazarus Group, a government-backed North Korean cyber association that has played a major role at previous malicious attacks against the U.S and other national banks.
Over $250 million stolen in the 2018 Cyber-Hack
The aforementioned hack took place back in April 2018 and the estimated amount of cryptocurrency stolen was reported $250 million. The stolen funds accounted for nearly half of the Democratic People’s Republic of Korea (DPRK)’s virtual assets heist that particular year. The report stated,
“Tian and Li received from DPRK-controlled accounts approximately $91 million stolen in an April 2018 hack of a cryptocurrency exchange (referred to hereinafter as “the exchange”), as well as an additional $9.5 million from a hack of another exchange. Tian and Li transferred the currency among addresses they held, obfuscating the origin of the funds.”
Additionally, the report added,
“Tian ultimately moved the equivalent of more than $34 million of these illicit funds through a newly added bank account linked to his exchange account. Tian also transferred nearly $1.4 million dollars’ worth of Bitcoin into prepaid Apple iTunes gift cards, which at certain exchanges can be used for the purchase of additional Bitcoin.”
The Justice Department also revealed that the accused cyber-criminals were using doctored photographs and forged identifications in order to avoid security hassle and the stolen funds were utilized to carry out the expenses in other illegal hacking activities.
However, the hacked exchange in the discussion has not yet been confirmed as a result of multiple attacks by the North Korean Community in 2018.
Earlier that year, Coinrail, a crypto exchange based in South Korea was also reported to be a victim of a $40 million hack carried out by the Lazarus Group back in 2018.
After the announcement, Timothy Shea, the US attorney in Washington claimed,
“The hacking of virtual currency exchanges and related money laundering for the benefit of North Korean actors poses a grave threat to the security and integrity of the global financial system.”
Hackers have improved over time; Chainalysis
A recent report by Chainalysis indicated that, in order to improve the security of exchanges, hackers have simultaneously improved their game as well. In 2019, more than 11 assaults on exchanges took place, and perpetrators were able to steal more than $250 million. Although the amount is substantial, it drastically dropped from 2018’s enormous theft of $875.5 million, stolen collectively from six crypto exchanges.
The report also pointed fingers at the aforementioned Lazarus Group and believed that was responsible for the 2014 Sony Hack and 2017’s WannaCry ransomware attacks.
With digital assets and their exchanges slowly gaining these infiltrator’s attention, it was imperative to raise security standards and take precautionary measures to make sure such criminals are not using or taking advantage of large exchanges or institutions.