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Crypto Crash Hits Proceeds of North Korean Hacker Heists

The sudden plunge in crypto values, which started in May amid a broader economic slowdown, complicates Pyongyang’s ability to fund its weapons programmes


The top US consumer watchdog said on Tuesday it plans to intensify its scrutiny of the use of cryptocurrencies.
Crypto has come under increasing scrutiny in recent months after the market cratered, toppling some companies and leaving customers holding worthless assets. File photo: Reuters.

 

North Korean hackers are among the biggest losers in the crypto crash, as the secretive nation relies heavily on ill-gotten digital gains for foreign exchange.

Its cryptocurrency holdings have decreased in value from $170 million to $65 million since the beginning of the year, according to New York-based blockchain analytics firm Chainalysis.

The firm included funds stolen in 49 hacks from 2017 to 2021.

North Korea has poured resources into stealing crypto in recent years, making it a potent hacking threat and leading to one of the largest cryptocurrency heists on record in March, in which almost $615 million was stolen, according to the US Treasury.

 

Sudden Crypto Crash

The sudden crypto crash, which started in May amid a broader economic slowdown, complicates Pyongyang’s ability to fund its weapons programmes, two South Korean government sources said.

It comes as North Korea tests a record number of missiles – which the Korea Institute for Defense Analyses in Seoul estimates have cost as much as $620 million so far this year – and prepares to resume nuclear testing amid an economic crisis.

One of North Korea’s caches from a 2021 heist, which had been worth tens of millions of dollars, has lost 80-85% of its value in the crypto crash of the past few weeks and is now worth less than $10 million, said Nick Carlsen, an analyst with TRM Labs.

A person who answered the phone at the North Korean embassy in London said he could not comment on the crash because allegations of cryptocurrency hacking are “totally fake news”.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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