South Korea Admits the North Targeted Seoul in Virtual War

North Korea’s Cyber Attacks Shift to Financial Targets

In an editorial posted immediately after the latest hacking of South Korean cryptocurrency exchange Youbit, The Korea Herald accused North Korea of targeting the “rapidly increasing” cryptocurrency market.

"The latest North Korean cyber heists confirm that the rogue regime is shifting its hacking-for-money operation into a higher gear, as it badly needs hard currency in the face of international economic sanctions imposed over its nuclear and missile programs."

Digital currencies, including Bitcoin, which are stolen by Pyongyang's cyber warfare, are easily traded and laundered and ultimately funneled back into North Korea to sustain the impoverished nation's economy, it said.

The North is believed to earn nearly $1 billion a year from its cyber heist operations; the editorial stated citing U.S. intelligence officials.

Youbit Closes Shop After Second Hack This Year

Youbit announced it would file for bankruptcy after hackers breached into the exchange’s hot wallet and stole 17 percent of its assets. This is the second time Youbit has been attacked by hackers, both of which were believed to have emanated from North Korea, officials from South Korea said.

Close to 4,000 Bitcoins went missing in the April cyber attack on Youbit. Following the breach, the exchange announced it beefed up security and stored the remaining 83 percent of its assets in a cold wallet. But hackers still managed to bypass Youbit’s security protocol Tuesday morning.

Youbit said customers could redeem their assets immediately albeit at a 75 percent marked down the rate of their market value. The company adds it will file an insurance claim and sell the exchange's operating rights to enable it to repay the remainder of the funds after the completion of the bankruptcy proceedings.

North Korea’s Cyber Attacks Shift to Financial Targets

Tuesday’s attack on Youbit underscores the shift in North Korea’s cyber warfare from political to financial targets. Hackers from Pyongyang are believed to be responsible for attacking the central bank of Bangladesh in February this year, as well as other Bitcoin exchanges across the world, reports the Associated Press.

Washington even points to North Korean hackers as the perpetrator of the WannaCry ransomware that crippled hospitals, banks, and several industries around the world earlier this year, according to Reuters.

South Korea’s intelligence unit, the National Intelligence Service (NIS), said that North Korean hackers could access information about their target by creating accounts on social media such as Facebook of beautiful women to attract the attention of workers at digital exchanges. The hackers will chat with these workers and later send them files with the malicious code.

Others pretend to be job seekers and send resumés as an e-mail attachment to executives. But the attachment contains malware capable of stealing personal information and exchange.

As the North upgrades its hacking operations to the more lucrative moneymaking machine, The Korea Herald is calling for broader cooperation between South Korea and the international community to protect the financial system and the digital currency market from future cyber attacks.