- North Korea’s huge crypto hack marks a new era in cybersecurity threats.
- “If there has ever been a suspicion that hacks are not related to national security, this is allowed,” a blockchain expert told Insider.
- TRM’s Ari Redboard explained how hacking means the emergence of a new kind of cyber war.
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U.S. officials this week linked North Korean hackers to the historic $ 625 million crypto fraud Axie Infinity, with a massive hack signifying a new type of threat to national security, according to a blockchain expert.
On Thursday, the US Treasury Department added the address of the Ethereum portfolio to its list of sanctions after the portfolio facilitated transfers of more than $ 86 million in stolen funds.
Hacker teams Lazarus and APT38, both linked to North Korea, are behind the theft, the FBI said in a statement, and the funds generate revenue for the Kim Jong Un regime.
Ari Redboard, head of legal and government affairs at blockchain research firm TRM, says the attack shows that even a nation as isolated as North Korea could be involved in the cyber war of the new era.
“A lot of hacks have been made from North Korea in the last few years,” Redboard told Insider. “But the scale of this shows that things have shifted from small feats to real national security concerns. It’s stunning – a bank robbery at the speed of the Internet.”
For years, North Korean actors have been responsible for cyberattacks, including a crackdown on Sony in 2014. But bands like Lazarus are becoming more sophisticated and ambitious.
Meanwhile, businesses in the nascent crypto sector are still finding support when it comes to cybersecurity, making them vulnerable to hacking groups who are constantly improving their tactics.
“North Korea has realized that hacking against an online retailer is one thing, but prosecuting cryptocurrencies is a more effective way to fund destabilizing activities at a very low cost to them,” Redboard said.
The country has early adopted cryptocurrency money laundering, he added, and there are no signs that bad actors will slow down their efforts, as it has been shown to be extremely profitable.
Moreover, Redboard noted that social engineering attacks, such as the infiltration of Axie Infinity, are becoming more advanced.
These hacks are not the result of simple emails with mass phishing, he explained, but are nuanced and targeted strikes against specific individuals.
The new digital battlefield
Although North Korea has an extremely small economy and limited infrastructure, it has proven that it can engage in cyber warfare on a scale similar to global superpowers such as the United States and China.
In particular, the Axie Infinity hack reinforced Redbord’s belief that the scale of digital attacks was rising at such a rate that a new type of war was emerging.
“In the last year or so, we’ve moved out of the world since 9/11 into a new digital battlefield,” Redboard said. “National actors know how to pursue the crypto business to finance the real proliferation of weapons, it’s not just some hackers trying to finance a way of life.”
The use of the North Korean group Lazarus confirms that the country’s isolated status and lack of modern infrastructure do not prevent it from participating in cyber wars on the world stage, Redboard explained.
The cryptocurrency industry is an excellent target for these attacks because of the volume of transactions and funds that move every day, but also because the business is not fully mature and can still develop its own cybersecurity protocols.
Unfortunately, this means that many companies often do not have the latest security measures, Redboard said.
“It comes down to strengthening cyber security. We are still in a world where these companies are learning how to defend themselves, and now we have seen that a small group is responsible for the biggest cryptocurrency hack.” he said. “If there has ever been a suspicion that hacks are not related to national security, this is allowed.
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