North Korean hackers charged in massive cryptocurrency theft scheme

Federal authorities said Wednesday that 3 North Korean computer system developers have actually been prosecuted for carrying out a series of cyberattacks to try to steal and obtain more than $1.3 billion in money and cryptocurrency from banks and business.

The developers, who become part of a North Korean military intelligence firm, also are accused of developing and deploying “numerous malicious cryptocurrency applications, and to develop and fraudulently market a blockchain platform,” according to a Department of Justice press release.

And the scheme likewise deployed repeated “spear-phishing campaigns” from 2016 through early 2020 that targeted employees of the U.S. Defense Department, the State Department, and employees at U.S.-cleared defense contractors, energy companies, aerospace business and tech firms, authorities said.

Hackers likewise took control of bank ATMs to take out cash from them as part of the conspiracy, the indictment says.

During an interview Wednesday, authorities stated that the development and marking in 2017 and 2018 of the so-called Marine Chain Token, which permitted financiers to buy fractional ownership interests in marine shipping vessels with blockchain technology, enabled North Korea to “privately acquire funds from investors, control interests in marine shipping vessels, and evade U.S. sanctions.”

Tracy Wilkinson, the acting U.S. Lawyer for the Central District of California, stated, “The scope of the criminal conduct by the North Korean hackers was comprehensive and long-running, and the range of criminal activities they have committed is staggering.”

Wilkinson likewise stated, “The conduct detailed in the indictment are the acts of a criminal nation-state that has actually stopped at nothing to extract vengeance and obtain cash to prop up its regime.”

The indictment submitted in U.S. District Court in Los Angeles charges Jon Chang, 31, 27-year-old Kim Il, and Park Jin Hyo 36, were members of units of the Reconnaissance General Bureau, a North Korean military intelligence company which took part in criminal hacking. Authorities noted that Park was formerly charged in a September 2018 criminal problem that detailed the cyberattack on Sony Pictures and the development of the ransomware referred to as WannaCry.

At the same time Wednesday, authorities announced that a Canadian-American citizen, 37-year-old Ghaleb Alaumary, agreed to plead guilty in a money-laundering scheme, and admitted to helping the indicted North Koreans “cash-out” their “cyber-enabled bank break-in.”

Authorities said that Alaumary arranged teams of individuals in the U.S. and Canada to launder countless dollars gotten by the hackers through ATM cash-out transactions.

The conspiracy, which officials stated was encouraged for revenge or monetary gain, depending upon the target, consisted of the 2014 attack on Sony for its satirical film “The Interview,” which portrayed the assassination of North Korea, in addition to the targeting of AMC Theaters, which revealed the movie. Another declared target was Mammoth Screen, which was producing an imaginary series that depicted a British researcher hijacked by North Korea, and which suffered a digital intrusion in 2015.

Authorities likewise stated that the hackers from 2015 through 2019 tried to take more than $1.2 billion from banks in Vietnam, Bangladesh, Taiwan, Mexico, Malta and Africa by breaking into their computer system networks and sending deceitful messages over the SWIFT bank messaging system.

The hackers are accused of targeting numerous cryptocurrency business and stealing 10s of millions dollars worth of cryptocurrency as part of the scheme.

One Slovenian cryptocurrency company was swindled of $75 million in such currency, authorities stated, and the hackers took practically $25 million worth of cryptocurrency from an Indonesian cryptocurrency company in September 2018 and $11.8 million from New York monetary services firm last summertime by using the malicious CryptoNeuro Trader application.

The defendants also are implicated of stealing $6.1 million from BankIslami Pakistan Limited as part of a series of ATM cash-out schemes, production of the WannaCry 2.0 ransomware in 2017, “and the extortion and attempted extortion of victim business,” the DOJ stated.

And the plan also presumably developed several malicious cryptocurrency applications considering that March 2018 that provided North Korean hackers backdoors into victims’ computer systems. Those applications included Celas Trade Pro, WorldBit-Bot, iCryptoFx, Union Crypto Trader, Kupay Wallet, CoinGo Trade, Dorusio, CryptoNeuro Trader, and Ants2Whale, officials stated.

“North Korea’s operatives, using keyboards instead of guns, stealing digital wallets of cryptocurrency rather of sacks of cash, are the world’s leading bank burglars,” stated Assistant Chief law officer John Demers of the Justice Department’s National Security Division.

The case comes as the rate of the leading cryptocurrency, bitcoin, has actually jumped by more than 400% over the past 12 months.

Bitcoin cost has actually jumped more than 75% as an increasing number of corporations grow comfy accepting it both as tender and as a shop of worth and circulating medium.

At one point Wednesday, bitcoin was selling for $51,165, near its all-time record it struck earlier in the day, according to Coin Metrics.

JPMorgan has said it is considering allowing banking of cryptocurrency, and Bank of New York City Mellon, the nation’s earliest bank, recently stated that it will quickly permit digital currencies to pass through the exact same monetary network it currently uses for more conventional holdings like U.S. Treasury bonds and stocks.

Payments companies such as PayPal and Mastercard have actually stepped up efforts on their platforms to support cryptocurrency processing. And electrical carmaker Tesla recently disclosed in a federal government filing that it had actually invested $1.5 billion into bitcoin and prepared to accept the digital currency as payment for its products.

But bitcoin’s history of prominent thefts and hacks have left some still questioning its security, particularly considering that it is often kept in digital wallets on independent networks.

In recent years, thieves have stolen billions of dollars’ worth of bitcoin. And the digital nature of those thefts typically make it challenging for authorities to locate the criminals.

– CNBC’s Tom Franck contributed to this report

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