South Korea has made a significant breakthrough in combating North Korean cybercrime by successfully recovering 4.8 Bitcoin (BTC) linked to the 2019 hack of the Upbit exchange. This marks a crucial development in the fight against cryptocurrency-related crimes orchestrated by North Korea.
The 2019 hack of the Upbit exchange involved North Korean hacker groups Lazarus and Andariel, who stole 342,000 Ethereum (ETH), valued at $41.4 million at the time. The stolen Ethereum is now worth over $1 billion at current prices. These hacker groups are notorious for their involvement in large-scale cybercrimes and have stolen more than $3 billion in cryptocurrency from 2017 to 2023.
For the first time, South Korean police have officially linked a significant hack to North Korean operatives. Through years of tracing blockchain activity and analyzing North Korean IP addresses, investigators were able to identify patterns, including unique North Korean language usage. The support from the US Federal Bureau of Investigation (FBI) also played a crucial role in uncovering the hackers’ operations.
The recovered Bitcoin, which was traced to a Swiss exchange, has been returned to Upbit. This successful recovery demonstrates South Korea’s commitment to combatting cybercrime and ensuring the security of the cryptocurrency ecosystem.
In addition to the recovery operation, Upbit is currently under scrutiny from South Korea’s Financial Intelligence Unit (FIU) for KYC-related violations. The FIU reports that the exchange may have been involved in up to 600,000 compliance breaches. The Financial Services Commission (FSC) has also raised concerns about Upbit’s market dominance, as the exchange accounts for nearly 20% of the 22 trillion won deposited in K Bank. This raises questions about potential risks to the financial system.
Despite these challenges, Upbit remains the largest South Korean crypto trading platform, with a trading volume of around $6 billion, according to CoinMarketCap data. The recovery of the stolen Bitcoin and the ongoing investigations into Upbit’s operations highlight the importance of regulatory compliance and security measures in the cryptocurrency industry.
Overall, South Korea’s success in reclaiming stolen crypto and uncovering the connection to North Korean cybercrime underscores the need for international cooperation and vigilance in combating illicit activities in the digital asset space.
