South Korea has accused North Korea of orchestrating the 2019 hack on cryptocurrency exchange Upbit, which resulted in the theft of 342,000 ETH, then valued at $41.5 million.
The stolen funds, now worth over $1 billion, mark one of the largest crypto heists linked to North Korea, the South Korean National Police Agency announced Thursday.
“[We] reached this conclusion based on a comprehensive analysis of evidence obtained through investigation,” the police said in a statement.
South Korea Analyzes IP Addresses and Asset Flow Patterns
Investigators attributed the crime to North Korea following a detailed analysis of IP addresses, virtual asset flow patterns, and the use of North Korean-specific terminology.
The conclusion, supported by evidence gathered alongside the U.S. Federal Bureau of Investigation (FBI), marks the first time South Korea has directly linked North Korea to a cryptocurrency theft.
The hackers reportedly laundered around 57% of the stolen ether by converting it to bitcoin at a discounted rate via three exchanges they allegedly set up.
The remaining funds were moved across 51 overseas platforms.
In a collaborative effort with Swiss authorities, South Korea managed to recover 4.8 BTC, tracing it to a Swiss-based crypto exchange.
The FBI has long highlighted North Korea’s cybercrime activities, previously linking state-backed hackers to major cryptocurrency heists, including the $100 million Harmony Horizon Bridge attack and the $600 million Ronin Bridge breach.
Earlier this year, the agency warned of North Korea’s intensified targeting of Web3 industry employees to exploit vulnerabilities and steal digital assets.
Last month, the South Korean Foreign Ministry said it is training its ASEAN counterparts to fight back against North Korean crypto “theft.”
Seoul and Washington have repeatedly accused Pyongyang of using government-trained hackers to steal Bitcoin and other tokens from global crypto exchanges.
These claims have been backed up by major IT companies and blockchain analytics firms, who have pointed the finger at Pyongyang-linked organizations like Lazarus.
South Koreans Turn to Crypto
A recent survey has revealed that most young South Koreans are losing faith in the national pension system, with many stating they see crypto and stocks as a better alternative.
The study found that more than three-quarters of people aged 20-39 “don’t trust” state-issued pensions.
Over half of respondents who said they were making their own pension plans claimed they were building their retirement funds with stocks and crypto.
Interestingly, even election candidates themselves have exposure to cryptocurrencies, with approximately 7% of them owning digital assets, according to a report by Yonhap that analyzed their asset disclosures.
Just recently, South Korea’s ruling Democratic Party of Korea (DPK) revealed that it is moving forward with plans to implement cryptocurrency taxation from January 2025, marking an end to previous delays.
Originally set for January 2022, the 20% tax on crypto gains (22% including local taxes) faced heavy opposition from investors and industry experts, prompting two postponements.
Recent discussions included proposals for further delays, with one suggesting a start as late as 2028.
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