The South Korean government has implemented sanctions against 15 North Korean individuals and one entity for engaging in illicit cyber activities, including high-profile cryptocurrency thefts. These measures target operatives linked to Bureau 313, a division of the Workers’ Party of Korea’s Machine-Building Industry Department, which oversees weapons production and ballistic missile programs.
The Machine-Building Industry Department has been under UN sanctions since 2016, according to a statement from South Korea’s Ministry of Foreign Affairs.
North Korean IT Workers Exploit Global Opportunities
The Ministry disclosed that North Korean IT professionals, often stationed in countries such as China, Russia, and Southeast Asia, operate under false identities to secure contracts with global IT firms.
- Some of these workers are involved in cyberattacks and data theft, channeling proceeds to North Korea.
- Among the sanctioned individuals, Kim Cheol-min was identified for infiltrating IT companies in the U.S. and Canada, transferring substantial funds to Pyongyang.
Additionally, South Korea sanctioned a North Korean entity responsible for dispatching IT personnel abroad, which helps remit foreign currency to fund the regime’s military operations.
North Korean Cyber Heists in Focus
This crackdown follows mounting evidence of North Korea’s involvement in major cryptocurrency hacks:
- On Monday, the FBI linked a $308 million theft from Japan-based exchange DMM Bitcoin to North Korean hackers, a breach that led to the exchange’s closure.
- Last week, the U.S. Treasury Department imposed similar sanctions on individuals laundering cryptocurrencies for North Korea through a front company in the UAE.
Unprecedented Crypto Theft in 2024
According to Chainalysis, North Korean hackers stole $1.34 billion worth of cryptocurrency in 47 incidents during 2024, accounting for 61% of global crypto theft for the year.
These hackers have displayed increased sophistication, employing tactics such as:
- False identities
- Utilizing third-party hiring intermediaries
- Leveraging remote work opportunities to infiltrate crypto and Web3 companies
South Korea’s Expanding Crypto Adoption
Amid heightened cybersecurity threats, South Korea’s cryptocurrency ecosystem continues to grow:
- 15.59 million South Koreans held accounts on the nation’s top five crypto exchanges by November 2024.
- Deposits on crypto exchanges doubled in one month, rising from 4.7 trillion won ($3.2 billion) in October to 8.8 trillion won ($6.03 billion) in November.
This growth comes as a recent survey revealed a significant portion of young South Koreans are losing faith in the national pension system, turning to stocks and cryptocurrencies as alternative retirement plans. Over 75% of respondents aged 20-39 expressed distrust in state-issued pensions, with over half investing in digital assets to secure their financial future.
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