UN Report: North Korea's Cyberattacks Fuel Foreign Earnings, Fund Nuclear Programs

The United Nations Security Council has released a report revealing that North Korea generates 50% of its foreign exchange earnings through cyberattacks. The report investigates the involvement of North Korean hackers in attacks on cryptocurrency companies, leading to losses of approximately $3 billion. The attacks primarily target digital wallet private keys and seed phrases, enabling the transfer of victims' assets to North Korean-controlled wallets and subsequent conversion into fiat currency.

United Nations Security Council Report Highlights North Korea's Reliance on Cyberattacks for Foreign Exchange Earnings

New York, United States - The United Nations (UN) Security Council has released a comprehensive report detailing North Korea's extensive involvement in cyberattacks, revealing that the country derives approximately 50% of its foreign exchange earnings from such illicit activities. The report also sheds light on North Korea's alleged involvement in cyberattacks targeting cryptocurrency companies, resulting in significant financial losses amounting to approximately $3 billion (450 billion yen).

Cyberattacks Targeting Cryptocurrency

North Korea's cyberattacks primarily focus on compromising digital wallet private keys and seed phrases, which are essential for wallet security. By exploiting these vulnerabilities, North Korean hackers gain access to victims' cryptocurrency assets, which are then transferred to North Korean-controlled wallets. These stolen funds are often exchanged for USDT or Tron, which are subsequently converted into fiat currency through large-volume over-the-counter (OTC) brokers.

In 2023, North Korea-linked hackers reportedly stole at least $600 million in cryptocurrency. If confirmed, additional hacks in the final days of the year could push this total to approximately $700 million. Despite a 30% reduction from the $850 million stolen in 2022, the Democratic People's Republic of Korea (DPRK) accounted for nearly one-third of all funds stolen in cryptocurrency attacks last year.

Attacks attributed to the DPRK have been significantly more damaging than those not linked to the country, with an average loss of approximately ten times the amount. Since 2017, Pyongyang-linked threat actors have been responsible for nearly $3 billion in cryptocurrency losses.

Alleged Funding of Nuclear Programs

The report suggests that North Korea has been utilizing the stolen cryptocurrency to fund its nuclear weapons programs. Facing United Nations sanctions since its initial nuclear test in 2006, North Korea's financial resources for its nuclear efforts have been targeted.

The UN Panel of Experts has indicated that it will conduct a review of sanctions enforcement against North Korea from July 2023 to January 2024, focusing on evasion tactics employed by the country. The findings of this review will assist the Security Council in considering new sanctions against violators.

The report highlights that cyberattacks fund approximately 40% of North Korea's weapons of mass destruction development costs. Notably, there has been an increase in cyberattacks targeting defense-oriented firms, with entities linked to North Korea's Reconnaissance General Directorate pooling resources and cyber tools.

Investigations into Hamas and Sanctions Evasion

The panel's investigations also explored the possibility of Hamas using weaponry of North Korean origin, a claim supported by Israel. Israel alleges that Hamas possesses dozens of North Korean missiles and anti-tank arms. However, North Korea has refuted these claims, dismissing them as baseless.

Despite sanctions aimed at curbing North Korea's nuclear program by limiting funds and banning trade, the country continues to import banned petroleum products and export luxury goods. Trade volumes in 2023 exceeded those of 2022, indicating persistent sanctions evasion.

Conclusion

The UN Security Council's report provides a comprehensive analysis of North Korea's extensive involvement in cyberattacks, highlighting the country's reliance on such illicit activities for foreign exchange earnings. The report also raises concerns about the alleged funding of nuclear programs and the possibility of North Korea supplying weapons to Hamas. The Security Council is expected to consider new sanctions against North Korea based on the findings of the UN Panel of Experts' review of sanctions enforcement.