North Korean hacking activity ends once KYC is implemented by regulators

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A recent report from South Korea’s National Intelligence Service (NIS) claims that North Korean hackers have stolen cryptocurrencies from decentralised finance, or DeFi, platforms worth more than 800 billion Korean won ($620 million). The organisation also disclosed that in November, it stopped an average of 1.18 million attacks per day launched by domestic and foreign hacking groups.

Nevertheless, a NIS representative explained to the local news source Kyunghyang Shinmun that all of the $620 million taken by North Korean hackers using DeFi exploits took place abroad, adding:

“In Korea, virtual asset transactions have been switched to real-name transactions and security has been strengthened, so there is no damage.”

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New Know Your Customer regulations for cryptocurrency trading went into effect in South Korea in 2021, requiring customers to open real-name accounts with the same bank as their cryptocurrency exchange in order to deposit or withdraw money. The client’s identity must then be confirmed by the bank and the exchange. Additionally, before starting operations, exchanges are required to obtain a licence from the Financial Services Commission.

The $100 million Harmony attack has been attributed to North Korean hacker groups like Lazarus Group, which have been involved in a number of high-profile DeFi breaches this year. Experts claimed that in the face of severe commercial sanctions imposed by the international community, such attacks are a means of generating foreign currency reserves. The NIS also issued a warning that North Korean cyberattacks would become more frequent in 2017:

“Attacks must be examined just as carefully as defences. because a single hacker organisation has access to every piece of attack information and never loses it. To make sense of the malicious code left behind by different attackers, information about it must be gathered.

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