North Korea: Crypto-hacks fuel 50% of country’s foreign funds, claims report

• Crypto hacks reportedly accounted for 40% of North Korea’s weapons program.
•  North Korean actors like Lazarus Group prefer laundering through “mixers.”

According to South Korea-based news agency report Yonhap, about 50% of North Korea’s foreign currency earnings are from hacks and crypto exploits. 

“The malicious cyber-activities of the Democratic People’s Republic of Korea (DPRK) generate approximately 50 percent of its foreign currency income and are used to fund its weapons programs.”

The media outlet cited a UN report, underscoring that the country’s crypto-related exploits between 2017 – 2023 amounted to $3 billion. According to the report, 40% of the illicit funds are used for developing weapons of mass destruction. 

The above report confirms a previous US revelation in mid-2023 about North Korea’s foreign income from cyber theft. In June 2023, a Nikkei Asia

“We’re very concerned that cryptocurrency heists, cyberattacks, are a significant source of funding for the regime in Pyongyang, and we’re concerned that about 50% of their foreign-currency earnings comes from cyber theft.”

Crypto hacks linked to North Korea

The country has been primarily linked to major DeFi hacks in 2022 and 2023. A 2023 Chainalysis report noted that the North Korea-linked Lazarus Group accounted for “US $1.7B in crypto hacks in 2022.” 

Most of the Lazarus Group’s stolen crypto funds are laundered to cryptocurrency mixer YoMix, following regulatory heat on other sanctioned mixers, Sinbad and Tornado Cash. 

Kimusky is another North Korea-linked actor adversely mentioned in crypto exploits on Stake.com and Harmony. 

Apart from the mixers, these actors prefer decentralized exchanges, lending protocols, and exchanges in that order. 

According to Arkham Intelligence data, Lazarus Group moved $1M in Bitcoin [BTC] in early January. If such a significant movement of crypto assets ends up in exchanges, market prices will likely be affected.