Crypto theft: North Korea-linked hackers stole $1.7b in 2022

North Korea-backed hackers stole $1. 7bn (£1. 4bn) of crypto within 2022, says blockchain analysis firm Chainalysis.

This almost quadruples the country’s previous record designed for cryptocurrency theft – $429m in 2021.

The loot also made up 44% of the $3. 8bn taken in crypto hackers last year, which the company called “the greatest year ever just for crypto hacking”.

Specialists have said the country, facing heavy sanctions, is turning to crypto theft to fund its nuclear arsenal.

Northern Korea has performed six nuclear medical tests and analysts expect the seventh one this year, as the country accelerates its nuclear weapons programme below leader Kim Jong-un. Last year, Pyongyang launched a list number of ballistic along with other missiles . This is despite the country’s struggling economy.

“For context, North Korea’s total exports in 2020 totalled $142m worth of goods, therefore it isn’t a stretch to express that cryptocurrency hacking is a sizable amount of the nation’s economic climate, ” Chainalysis mentioned in a report on Wednesday.

These cyber-terrorist typically launder crypto through “mixers”, which usually blend cryptocurrencies from various users to obfuscate the roots of the funds, the particular firm said.

Other experts have also said that North Korea launders stolen crypto through brokers within China and non-fungible tokens (NFTs).

Last month, the FBI confirmed that North Korea-affiliated Lazarus Group was responsible for a $100m crypto heist on a blockchain network called Horizon bridge last year.

Overall, decentralised financial protocols, or DeFi, accounted for over 82% of cryptocurrency stolen in 2022, Chainalysis’ report said.

DeFi users know what may happen to their funds when they use them because clever contract codes governing these protocols are usually publicly accessible by default.

But this transparency also makes DeFi particularly attractive to hackers, who can scan the codes for vulnerabilities and “strike at the perfect time” to maximise their loot, according to the report.

David Schwed, main operating officer on blockchain security company Halborn, noted that DeFi developers “prioritise growth over all else”, and funds that could be used to enhance protection are often directed rather to rewards, in order to attract users.

DeFi developers can take the leaf from conventional financial institutions in making their particular platforms more secure, Mister Schwed said.

For instance, they can imitate different hacking situations to test their methods, or design mechanisms to pause or halt transactions when suspicious activity is certainly detected.

“You don’t have to move as slower as a bank, but you can borrow from exactly what banks do, inch he said.