North Korea arrests hackers for laundering stolen bank funds via crypto

North Korean authorities arrested former military hackers accused of stealing state funds from two banks and laundering the proceeds through cryptocurrency. The group allegedly breached the internal systems of the Central Bank of the DPRK and Foreign Trade Bank, diverting foreign currency and state trade funds into overseas crypto wallets. Chinese brokers converted the assets into U.S. dollars and yuan, with contacts in Sinuiju and Hyesan exchanging crypto for cash in real time. The group split transfers into small amounts to avoid detection, using encrypted messaging apps, unregistered phones, and Chinese wireless equipment. The arrests occurred on July 12 at a Pyongyang safe house after officials detected discrepancies in foreign-currency payment approvals and suspicious overseas IP activity. The laundering methods mirror those used by North Korean hacking groups to cash out stolen crypto. A multinational sanctions-monitoring report indicated that Chinese over-the-counter traders and financial institutions play a central role in converting crypto stolen by Pyongyang-linked operators into fiat. North Korean hackers stole a record 2000000000 dollars in crypto last year, accounting for 76% of crypto hack and scam losses through April 2023.

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