Reuters reports North Korea losses from crypto-market downturn

North Korea has lost “millions of dollars” stolen by hackers due to the downturn in the cryptocurrency market. This threatens funding for its weapons programmes, Reuters reports, citing sources.

Two anonymous sources in the South Korean government said that the bear market amid a broader economic downturn has complicated Pyongyang’s ability to generate income from hacking. They said this could potentially affect financing of military developments and tests.

Analysts noted that the value of Chainalysis-tracked unlaundered North Korea-linked cryptocurrency fell from $170 million to $65 million. This category includes funds stolen in 49 hacks from 2017 to 2021.

TRM Labs analyst Nick Carlson estimates that one of the wallets linked to North Korea has lost 80% to 85% of its value in recent weeks. Experts do not disclose which digital assets Pyongyang holds, as that could reveal investigative methods.

A staff member at North Korea’s embassy in London told Reuters that the accusations of attacks on cryptocurrency projects are “fake”.

Earlier, Chainalysis estimated that in 2021 North Korean hackers carried out at least seven cyberattacks on crypto platforms, during which they stole digital assets worth about $400 million.

According to the UN, North Korea funds the development of nuclear programs through hacks of Bitcoin exchanges.

In April 2022, OFAC added an address to the sanctions list, presumably linked to the Lazarus hacker group. It was marked as linked to the Ronin sidechain attack, whose breach was the largest in DeFi history.

Later, U.S. authorities stated the targeting of North Korean hackers on the crypto and blockchain sector, including exchanges, DeFi protocols, venture funds, major holders of crypto assets and NFTs.

In May, the U.S. Treasury, State Department and FBI warned on North Korean IT specialists’ involvement in crypto project development. According to authorities, the income they earn is directed to financing weapons programmes.

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