Once more, North Korea has demonstrated its cyber prowess, possibly undermining international sanctions by using cryptocurrencies. According to a recent assessment by UN sanctions monitors, North Korea is suspected of using the Tornado Cash platform to launder a whopping $148 million that was taken from a cryptocurrency exchange in March.
This event highlights how difficult it is becoming to enforce sanctions in the digital era, when illegal actors can hide their identities behind cryptocurrencies.
Mixing Up The Rules: How Tornado Cash Facilitated Money Laundering
According to the UN report, the stolen funds, believed to be from the HTX exchange hacked in late 2023, were funneled through Tornado Cash, a crypto mixer.
These platforms obfuscate the origin of transactions by essentially pooling funds together and then distributing them to new addresses. This makes it extremely difficult, if not impossible, to track the original source of the money.
NORTH KOREA LAUNDERED $147.5 MILLION IN STOLEN CRYPTO IN MARCH, SAY UN EXPERTS
North Korea laundered $147.5 million through virtual currency platform Tornado Cash in March after stealing it last year from a cryptocurrency exchange, according to confidential work by United…
— *Walter Bloomberg (@DeItaone) May 14, 2024
North Korea Making Big Bucks On Cyberattacks
The UN monitors, citing data from blockchain research firms, further revealed that North Korea has likely conducted a total of 97 cyberattacks on cryptocurrency companies since 2017, netting an estimated $4 billion.
This year alone, North Korean hackers are suspected to be behind a dozen crypto thefts worth around $55 million. Experts believe these attacks are often carried out by skilled DPRK (Democratic People’s Republic of Korea) IT workers employed by unsuspecting small crypto firms, granting them insider access to exploit vulnerabilities.
Global Crackdown On Tornado Cash: A Step In The Right Direction?
The international community has not turned a blind eye to these illicit activities. The US government sanctioned Tornado Cash in 2022, labeling it a money-laundering tool frequently used by North Korean cybercriminals. This action complemented broader efforts to regulate digital platforms susceptible to financial fraud.
The recent sentencing of Tornado Cash developer Alexey Pertsev to 64 months in prison by a Dutch court further highlights the tightening grip on such platforms. However, the case also exposes the complexities of regulating cryptocurrencies, a decentralized technology that transcends national borders. International cooperation and coordinated efforts are crucial to tackle this challenge effectively.
Looking Ahead: Securing The Future Of Crypto
The North Korean cryptocurrency laundering case serves as a wake-up call. It underscores the urgent need for a multi-pronged approach to tackle the issue. Governments, regulatory bodies, and the cryptocurrency industry itself must collaborate to address vulnerabilities, enhance transaction transparency, and establish robust anti-money laundering (AML) frameworks.
Featured image from @GameStopPepe) / X, chart from TradingView
