South Korea

Perpetrator of South Korea’s ‘Bitcoin-gate’ untraceable

Perpetrator of South Korea’s ‘Bitcoin-gate’ untraceable

A North Korean hacker at the heart of the espionage scandal sweeping South Korea may have covered his or her tracks due to loopholes in the country’s recently introduced “travel rules” throw away study.

Seoul claims that a South Korean Army officer on active duty and a digital asset exchange executive leaked classified information to an agent working for the Democratic People’s Republic of Korea (DPRK) in exchange for bitcoin.

On Thursday, the Seoul prosecutor’s office said it had charged the South Korean army captain and the CEO of the unnamed cryptocurrency investment firm with violating the country’s National Security Law.

The alleged incident occurred in January earlier this year.

The first known case of a South Korean military officer assisting North Korea in its attempt to disrupt the country using social networks and cryptocurrencies could affect the hard-earned legality that Bitcoin and other cryptocurrencies are starting to gain in governments and regulators around the world sex.

Even if cumbersome know-your-customer norms and anti-money laundering and counter-terrorism financing norms stifle innovation and growth, it could further contaminate the industry.

bitcoin gate

The 29-year-old army captain filmed and leaked military secrets with a recorder cell phone. He turned to the device after the photo quality of a watch with a hidden camera was deemed too poor. The watch was allegedly purchased by the 38-year-old CEO of the cryptocurrency exchange.

Left: Hidden watch camera, Right: ‘Poison Tap’ | Image: Seoul Central District Prosecutor’s Office

The officer received about 48 million won (about $38,000) in bitcoin, while the crypto executive received about $600,000 in cryptocurrency from North Korean hackers through the foreign cryptocurrency exchange prosecutor’s office.

It all started in 2020 when an Army captain who was in debt for his gambling addiction encountered hackers on social networks.

throw away It was learned that North Korean hackers instructed crypto executives to install a hacking device called a “poison faucet.”

The software would give hackers and North Korea access to South Korea’s ultra-critical internal military network, the Korea Joint Command and Control System (KJCCS). Forkast learned that the infected army captain had security clearance to log into the system.

The Defense Ministry said that if the hacking attack is successful, it will seriously undermine South Korea’s national security.

See related articles: North Korea stole $400 million in cryptocurrencies in 2021, Chainalysis says

The 73-year war between the two countries never officially ended, and the standing army was maintained on the “38-degree line,” the common name for the 38-degree north latitude in East Asia that divides the two countries.

“But the Department of Defense was able to pre-empt the attack,” the ministry official told throw away.

However, this development offers a glimpse into the increasingly sophisticated tactics used by the North Korean regime to try to use cryptocurrencies to make money illegally and undermine the security of its enemies and competitors.

The US agency has attributed the $620 million hack of Axie Infinity’s Ronin blockchain to North Korea’s Lazarus Group. The media, citing an unpublished UN document, said the stolen funds were used to finance North Korea’s nuclear and ballistic missile programs.

Anonymous Cloak

While the Seoul Central District Prosecutor’s Office, in conjunction with the Police Department and the Ministry of Defense, successfully booked officers and crypto executives, throw away Learn that the North Korean hacker behind this plan to threaten national security has covered his/her tracks.

“There is still no progress in tracking North Korean agents,” a Defense Ministry representative told throw away. “This is because the agent and the two defendants communicated on Telegram and conducted transactions in Bitcoin.”

“Telegram didn’t really cooperate with the investigation, it guarantees complete anonymity and privacy,” said Hwang Suk-jin, a professor of information security at Dongguk University.

“And since the funds are delivered in Bitcoin, [the investigation] The digital wallet needs to be tracked to see where the funds are coming from and how it is being circulated,” Huang told throw away“But South Korea’s travel rules state that transactions between individual wallets are not tracked.”

See related articles: South Korean crypto firms scramble to meet FATF’s travel rules

South Korea recently made the Financial Action Task Force’s (FATF) “travel rule” a requirement.

The rules require South Korean exchanges to collect personal information on senders and recipients of all transactions over 1 million won ($794.28). But this rule does not apply to peer-to-peer transactions.

A police officer told throw away A joint investigation with prosecutors and the Defense Security Support Command (DSSC) will continue.

Still, experts believe that even as South Korean banks are trying to get more directly involved in the industry, the incident will only make the know-your-customer (KYC) norm for cryptocurrency firms more onerous.

see related article: South Korean banks seek green light for cryptocurrencies

Jisu Park, CEO of blockchain security firm, told throw away There are unavoidable loopholes that could allow bad actors in any transaction, be it cryptocurrency or fiat.

“However, we are seeing regulators take a proactive approach, imposing stricter AML/KYC requirements on exchanges and even wallets as they develop their own financial products,” Park said.

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