Seoul-based bitcoin exchange YouBit announced on 19 December that it would close down due to bankruptcy after getting hit by a cyber-attack that stole 17% of its total assets.
Last April, YouBit was also a victim of another cyber-attach which investigators have linked to North Korea’s Hacker Army.
A few days later another bitcoin exchange, EtherDelta suspended its service after it discovered that its server had been compromised by hackers. EtherDelta is one of the world’s top trading sites for bitcoin with an estimated volume of $11 Million per day.
Police investigators and the Korea Internet and Security Agency have reason to believe the recent attack on YouBit is related to the one last April. Luke McNamara, Senior Analyst for U.S. cybersecurity firm FireEye Inc., believes these cyber-attacks on YouBit are in alignment with North Korea’s focus on crypto-currencies:
“This is an adversary that we have been watching become increasingly capable and also brazen in terms of the targets that they are willing to go after. This is really just one prong in a larger strategy that they seem to be employing since at least 2016, where have been using capability that has been primarily used for espionage to actually steal funds.”
North Korea has one of the most oppressive regimes in the world. Its supreme leader Kim Jong Un has controlled the nation with an iron fist and has tightly regulated access to the Internet.
However Pyongyang has steadily developed a team of hackers called the Hacker Army which has likewise been linked to the theft of $60 Million from a Taiwan bank. Recently the United States accused North Korea for developing the ransomware, WannaCry which compromised hundreds and thousands of computers worldwide this year.
The Hacker Army has its origins as far back as Kim Jong Il’s regime. The late dictator and Kim Jong Un’s father was a proponent of technology which he believed could become a central weapon for modern warfare.
North Korea’s hacker slowly gained notoriety over the years. In 2004, they hacked into the South Korea military’s wireless communications network. They started hacking for money in 2011 when it was reported the group stole millions of dollars from online games.
But the Hacker Army’s claim to fame happened in 2014 when the group allegedly hacked Sony Corporation as the film studio was about to release “The Interview” a movie which parodied Kim Jong Un.
Hackers leaked private emails which damaged careers and led Sony to pay as much as $8 Million for the loss of personal information. North Korea denied the allegations after the U.S. government identified Pyongyang as the source of the attacks.
Hacking is believed to be North Korea’s response to the economic sanctions levied by the United Nations and the United States. It is also a source of funding for Pyongyang’s controversial nuclear arms development program.
According to the Australian Strategic Policy Institute, it is estimated that Pyongyang employs 1,700 hackers with a support staff of 5,000 people.
Plans to cut off North Korea from the Internet would not be effective because it has options for access via the state-owned China United Network Communications, Ltd and a second link through a telecommunications company identified with Russia.