South Korean investigators are reportedly considering North Korea as a potential suspect in a massive heist from the Seoul-based bitcoin exchange Youbit. The theft was so massive that the exchange filed for bankruptcy immediately following it.
Youbit files for bankruptcy after the heist
Citing sources familiar with the matter, The Wall Street Journal reports that law enforcement in South Korea and a state cyber-security agency are leading the investigation. It’s still in the early stages, and it might take weeks for experts to go through the malware code that was used in the heist. However, the sources reportedly said there are signs and history suggesting that North Korea could have been behind it.
The operator of Youbit, the company Yaipan, halted trading on the cryptocurrency exchange on Tuesday following the hack and then filed for bankruptcy. The WSJ’s sources said that North Korea targeted the same bitcoin exchange in April, although Youbit was operating under a different name at that time. Additionally, they said the bitcoin theft follows a pattern observed in other moves against other cryptocurrency exchanges in South Korea and a rising number of attempted bitcoin thefts from individual owners.
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Here’s why North Korea is said to be suspected
This week the White House blamed North Korea for the global ransomware attack referred to as WannaCry. The malicious code locked down victims’ digital files and held them for ransom by demanding payment in bitcoins.
According to the WSJ, about 7,000 hackers around the globe are employed by Pyongyang, and this massive cyber-army has shifted its focus to one of financial gain over the last two years. Most recently, North Korean hackers have reportedly been focusing their efforts on cryptocurrencies, researchers told the newspaper. However, Pyongyang denies being involved in the hacks.
North Korea has reportedly been looking for new ways to make money as the many sanctions against it continue to take a financial toll while leader Kim Jong-Un tries to keep pushing the nuclear programs that are the cause for all those sanctions. North Korea has been allegedly turning to financial warfare methods that have gotten more and more sophisticated in recent years, the WSJ said.
Cryptocurrency infrastructure is vulnerable
The bitcoin craze has created an environment in which investors are quick to pour cash in without performing a lot of due diligence, not only by gobbling up stock in small companies they’ve never heard of but in other ways as well. Experts told the WSJ that the cryptocurrency world is moving very fast and is highly lucrative, which makes it a prime target for cyber-thieves, whether from North Korea or anywhere else in the world.
Although bitcoins were designed to be highly encrypted and secure, hackers have found ways to pick the digital pockets of owners, either by breaching exchanges where cryptocurrencies are traded or by hacking into digital wallets or pilfering passwords that have been encrypted. The value of bitcoin has risen sharply throughout this year, starting below $1,000 at the beginning of the year and then enduring a meteoric rise that peaked at about $20,000 over the weekend.