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North Korean hackers bag $400m of digital assets in cyberattacks

By Debabrata Das

07:59, 27 January 2022

Hacker in a dark hoody sitting in front of a notebook with digital North Korea flag in the background
Majority of funds stolen were in Ether – Photo: Shutterstock

North Korean hackers were rampant in their attacks on decentralised finance (DeFi) networks in 2021, lifting as much as $400m of digital assets from at least seven different attacks.

The findings are part of a new research by Chainalysis, which also found that the attacks were targeted primarily at investment firms and centralised exchanges. According to the blockchain research firm, the hackers made use of phishing lures, code exploits, malware and advanced social engineering to siphon funds.

“Once North Korea gained custody of the funds, they began a careful laundering process to cover up and cash out. These complex tactics and techniques have led many security researchers to characterize cyber actors for the Democratic People’s Republic of Korea as advanced persistent threats,” Chainalysis said in a note.

Ether gains popularity

North Korean also appears to have diversified their tastes for cryptocurrencies. Chainalysis found that Bitcoin accounts for less than one-fourth of the cryptocurrencies stolen by North Korean hackers. In 2021, only 20% of the stolen funds were in Bitcoin, whereas 22% were either ERC-20 tokens or altcoins. Ether’s popularity increased and it accounted for 58% of the funds stolen.

Overall, the research found that cybercriminals laundered $8.6bn worth of currency in 2021, based on the amount of cryptocurrency sent from illicit addresses to addresses hosted by services.

As such, Chainalysis said that the money laundering activity in 2021 was a 30% increase from 2020. “The increase is unsurprising given the significant growth of both legitimate and illicit cryptocurrency activity in 2021,” the research firm said.

DOGE/USD

0.16 Price
-0.850% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

UNI/USD

10.57 Price
-5.360% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.08964

BTC/USD

67,569.10 Price
-1.080% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

ETH/USD

3,756.71 Price
-2.030% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

Money laundering share still low

Money laundering remains a small percentage of overall cryptocurrency transactions. Even after the increase in 2021, the share of money laundering was just 0.05% of the overall transaction volume.

In comparison, the United Nations Office of Drugs and Crime estimates that between $800bn and $2trn of fiat currency is laundered every year, as much as 5% of the global gross domestic product.

Since 2017, a total of $33bn worth of cryptocurrency has been laundered according to Chainalysis, with most of the total moving to centralised exchanges over time. In fact, 2021 was the first time that centralised exchanges did not get the majority of the funds sent by illicit addresses, having received only 47% of the total laundered cryptocurrency.

DeFi protocols received 17% of all funds sent from illicit wallets in 2021, up from 2% in the previous year.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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