South Korea accuses North Korea of involvement in the 2019 hack of the crypto exchange Upbit, in which hackers reportedly captured coins worth $41.5 million.

The South Korean National Police has confirmed that North Korea was responsible for the theft of 342,000 ETH in 2019. This Ether, worth about 58 billion won ($41.5 million), was stolen from the crypto exchange Upbit.

The investigation by South Korean authorities reveals that the North Korean hacker groups Lazarus and Andariel were involved in the theft. Both groups operate under North Korea's General Bureau of Intelligence, a state institution that engages in espionage and financial crime, thus supplementing North Korea's state coffers.

Technical evidence

In addition to technical clues, investigators also found linguistic peculiarities on a laptop that indicated North Korean hackers were involved.

Some of the stolen Ether was converted into Bitcoin at cheaper prices and then laundered through more than 50 foreign crypto exchanges. However, it is not clear exactly how much crypto North Korea holds, as not all hacks attributed to North Korea can be directly linked to the country.

Increasing threat from state-sponsored hackers

This case highlights the growing threat of state-trained hackers. In addition, it shows that many crypto exchanges have yet to catch up on Know-Your-Customer (KYC) compliance. According to the current rate, the value of the stolen coins would now be $1.06 billion.

A familiar phenomenon

Crypto-hacks by North Korea are not new. The United Nations and foreign governments have long accused the country of using crypto thefts to fund their weapons programs. However, this is the first time South Korean authorities have directly linked their neighbor to a major crypto theft.

As recently as September, the FBI warned of North Korean crypto fraudsters. According to the U.S. Secret Service, these hackers use social engineering techniques, targeting DeFi companies working with crypto-ETFs.