North Korea was floundering under sanctions. Now it’s making billions from stolen cryptocurrency

In March 2022, a senior software engineer at a gaming company in Singapore received a job offer.

It was good news because things were not going very well at his current company, Sky Mavis, creators of the money-making game Axie Infinity. The value of his in-game cryptocurrency had plummeted.

The engineer went through the job application process before finally receiving a PDF with salary details.

He clicked on the link, but the job offer was fake.

North Korean hackers now had access to Sky Mavis private keys — access codes to the company's cryptocurrency account.

They stole around $600 million in cryptocurrencies in one of the biggest heists in history, not just cryptocurrencies, but anything.

As international sanctions have reduced North Korea's ability to import and export things, it has been executing many plots and schemes to gain access to foreign currency.

But it turns out that nothing compares to stealing cryptocurrencies. And last year, cryptocurrency theft was North Korea's main form of foreign exchange earnings.

Cute cartoon characters glide through a winter scene on a sleigh.

Axie Infinity is a game based on a virtual world where you can "fight, collect and even use fierce and adorable pets to earn cryptocurrency."(sky mavis)

Criminal schemes to make money

In 2017, obtaining foreign currency became more difficult than ever for North Korea.

Leader Kim Jong-un launched multiple intercontinental ballistic missiles, angering the international community, particularly US President Donald Trump, who began calling him "little rocket man."

Trump threatened several times to "totally destroy North Korea."

In response, the United Nations imposed incredibly strict sanctions on North Korea, blocking almost all trade to and from the country.

The goal was to cut off North Korea's access to foreign currency, which would make it much more difficult to buy supplies for its nuclear weapons and missile programs.

So, they have started resorting to criminal plots and schemes to make money.

One method is the coal trade, of which North Korea has a lot.

Coal ships leave North Korean ports full of North Korean coal, turn off their satellite navigation beacons, and disappear from the map.

A little later, empty ships appear on the map again, although they do not reach any ports to unload.

Meanwhile, ships designed to transport oil leave North Korea empty, disappear, and then reappear full of oil.

Black and white aerial footage of a ship docked in a port and then out to sea.

Surveillance footage provided in a UN Security Council North Korea sanctions report claimed to show a ship loaded with coal in Nampo, North Korea, on March 11, 2018 and later at the Balikpapan port facility, Indonesia, April 9, 2018.(United Nations Security Council via Reuters)

A careful investigation by UN experts discovered that they are not actually traveling to Atlantis, but rather are sneaking up on another ship and using its cranes and pipes to transfer coal and oil in a ship-to-ship transfer.

There is speculation that they are evading sanctions and trading coal and oil with Russia and China.

According to the United Nations, this trade is illegal.

More plots and schemes.

This is just one of the illegal ways North Korea is making money. Another is smuggling.

North Korea has a history of selling illegal products through its embassies.

Heroin, methamphetamines, gold bars and weapons have been transported to North Korean embassies on trucks, ships and by diplomatic mail.

A white building with a flag and an embalming on top and a black fence in front.

North Korean Embassy in Moscow, Russia.(Reuters: Tatyana Makeyeva)

It has been reported that embassies sell these things on the street to cover a fee; They all have to raise a certain amount of foreign currency each year to send to Pyongyang.

North Korean citizens are also sent abroad to get jobs in high-paying industries, such as the technology sector, and then send their paychecks to the North Korean government.

Maintaining all these plans is very hard work for Supreme Leader Kim Jong-un and they are not very lucrative.

One hundred thousand dollars here, one hundred thousand dollars there. That's nonsense for a guy trying to build a formidable nuclear arsenal.

Cryptocurrencies are where North Korea makes a lot of money.

Wannacry: The biggest cyber attack in history

A ransom message on a UK NHS computer.

Wannacry reached the United Kingdom's National Health Service.(@fendifille via AP)

In 2017, North Korean hackers made one of their first attempts to earn revenue through cybercrime.

They developed a virus called Wannacry that made its way through a security flaw in Microsoft Windows in the largest cyberattack in history.

The list of victims was extremely extensive. The attack affected Britain's hospital network, Germany's railway system and dozens of businesses and government agencies.

However, the attack was not as effective as it could have been.

British cybersecurity researcher Marcus Hutchins discovered that hackers had inserted a "kill switch" into the code in case they wanted to stop the virus from spreading.

So he just flipped that switch.

Furthermore, news spread that even if you paid the ransom, there was no guarantee that your files would be unlocked.

While hundreds of thousands of computers were infected, fewer than 500 ransom payments were made.

The North Korean hackers received around 51 Bitcoin, which, thanks to Bitcoin's outrageous volatility, could have been worth between $100,000 and $3.5 million, depending on when the hackers sold them.

Either way, it's not a huge amount.

To make real money, North Korea has turned its attention to robbing crypto exchanges and taking millions of dollars at a time.

North Korea comes big

Most people trade their cryptocurrencies through cryptocurrency exchanges which basically do the same thing a bank does.

But unlike banks, crypto exchanges are unregulated and often have poor security measures.

While robbing a bank is risky, robbing a crypto exchange, it seems, is just a matter of sending an attractive job offer to a senior employee.

North Korean hackers have been robbing one crypto exchange after another.

In 2022, the North Korean hacking gang was responsible for half of all cryptocurrency thefts. His loot was 1.65 billion dollars.

That's more than three times the amount obtained globally from ransomware last year.

It is almost double what they got from all other exports.

Yes, to be clear, last year, cryptocurrency theft was North Korea's main form of foreign exchange earnings.

Kim Jong-un celebrated this stroke of luck by carrying out as many missile launch tests in a single year as he had done in the previous decade.

North Korea tested 121 rockets in 15 months.

A group of men standing at the other end of a room with large round green and red missiles lined up against the wall.

Kim Jong Un inspecting nuclear warheads at an undisclosed location on an unknown date.(KRT/via Reuters TV via Reuters)

There is now speculation that Kim is selling some of his weapons to Russia to help Vladimir Putin's war in Ukraine. Another interesting source of income.

At the moment, there is no real plan to stop it. Cryptocurrency exchanges are still unsafe and unregulated pools of money that he, or anyone else, can tap into to pay for nuclear weapons.

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