Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law. Editor's note A wise man once said, "there's security and there're securities," and if he didn't, he should've. In modern English, it seems a quaint coincidence that the word "security" refers to both safety and a broad class of investments. But as pending arguments about, say, meme-propelled trading in securities are set to take place in forums reserved for national security, it's a good reminder that money precedes weapons as vehicles for national power. In some sense, it's obvious that financial …

The United Nations has accused the North Korean state of stealing $281 million worth of crypto from an exchange during September 2020. According to Reuters, the findings from a “confidential report” authored by independent sanctions monitors for U.N. Security Council members “strongly suggests” links between the hack’s perpetrators and the North Korean regime. Reuters quoted the report: “Preliminary analysis, based on the attack vectors and subsequent efforts to launder the illicit proceeds, strongly suggests links to the DPRK.” Reuters noted the U.N. report accuses North Korea of using the stolen funds to support its nuclear and ballistic missile programs in …

A New York federal judge has denied an Ethereum developer’s motion to dismiss criminal charges over allegations he assisted the North Korean regime to bypass U.S. sanctions. The developer and former-hacker, Virgil Griffith, is accused of helping North Korea evade economic sanctions by delivering a speech during a Pyongyang blockchain conference in April 2019. Law360 reported that in his motion, Griffith had claimed the speech he delivered at the Pyongyang Blockchain and Cryptocurrency Conference was protected by his First Amendment right to free speech. Griffith also requested a bill of particulars, claiming he was unable to prepare for the hearing …

Lawyers representing the United States government have filed a legal memo opposing the dismissal of charges for Virgil Griffith, a former Ethereum Foundation researcher accused of conspiring to violate U.S. sanctions against the Democratic People's Republic of Korea, or DPRK. According to court records filed Nov. 19 in the Southern District of New York, prosecutors’ referred to Griffith’s Oct. 22 argument to dismiss the charges against him as “unavailing.” The legal team is alleging the former Ethereum Foundation researcher provided a service to the DPRK by using an analogy of a U.S. citizen providing nuclear secrets to scientists in the …

There has been a hot political debate underway on who should take responsibility for countering North Korean hacks targeting South Korean cryptocurrency exchanges. Recently, South Korea's financial watchdog made it clear that they do not see this issue as any of their business. According to Fn News, the Financial Services Commission, or FSC, has replied to a written inquiry from the National Assembly’s Political Affairs Committee on October 23. The FSC says that they’re not responsible for the crypto stolen during attacks from hackers sponsored by the Kim Jong-un’s regime, such as Lazarus Group, on crypto exchanges. Per the report, …

British multinational security company BAE Systems and the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, have published a report revealing how cybercriminals launder cryptocurrency. According to the study Follow the Money money laundering cases via crypto are still relatively small compared to the huge volumes of cash laundered through traditional methods like wire transfers. But there are some notable examples and the report goes in-depth into the money laundering methods employed by Lazarus Group, a well-known hacking gang sponsored by the North Korean regime. Lazarus typically steals the crypto funds from an exchange and then starts to pass transactions …

A group of North Korean hackers is engaged in a massive campaign targeting U.S. financial institutions and cryptocurrency exchanges around the world — with U.S. authorities warning of the high level of threat it poses to the country. According to an alert issued by the U.S. Department of Homeland Security (DHS), agencies including the FBI, the U.S. Cyber Command, and the Department of the Treasury are moinotiring the resurgence of the North Korea-sponsored hacking group, BeagleBoyz. The hackers have not been as active in the last few years as the notorious Lazarus Group – another hacking group from the hermit …

"The Justice Department today filed a civil forfeiture complaint detailing two hacks of virtual currency exchanges by North Korean actors," said an Aug. 27 statement from the U.S. Department of Justice, or DoJ. "These actors stole millions of dollars’ worth of cryptocurrency and ultimately laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders." The hackers allegedly utilized 280 different digital asset accounts. March 2020 saw details of a 2019 legal case surface, in which two Chinese nationals allegedly hijacked piles of crypto assets totaling $250 million. This ordeal appears to be connected with the present day news, the DoJ statement …

Lazarus, a group of hackers who are allegedly backed by North Korea, is now reportedly attacking crypto and blockchain talent through major professional social network, LinkedIn. According to a report by the Finnish cyber security and privacy firm, F-Secure, the latest Lazarus attack was made through a crypto-related job advert on the site. Their investigation indicated that an individual working in the Blockchain space received a phishing message that mimicked a legitimate Blockchain job listing. The message included an MS Word document titled “BlockVerify Group Job Description,” which executed malicious macro code when opened. F-Secure found that the document shares …

A report unveiled by the U.S. Army reveals that North Korea now has more than 6,000 hackers stationed in countries such as Belarus, China, India, Malaysia, Russia, among others. The operations of four sub divisions are overseen by Bureau 121, the cyber warfare guidance unit of the hermit nation. The report, named North Korean Tactics, suggests the hackers do not exclusively launch cyberattacks from North Korea itself, as the country lacks the IT infrastructure to deploy the massive campaigns. Financial crimes division The “financial crime division” called the Bluenoroff Group has around 1,700 members and is dedicated to crypto crimes …

North Korea-based cybercriminals are suspected to be using untraceable alternative cryptocurrencies, or altcoins, to convert stolen funds into cash. According to an NK News report, an unpublished United Nations Panel of Experts report states that North Korea-backed hackers have stolen approximately $1.5 billion in cryptocurrencies and they were converting a portion of that amount into cash. Using altcoins, mixers and loosely regulated exchanges The hackers deliberately transact using privacy-focused altcoins as they are hard to trace and track, moving the stolen assets to loosely regulated cryptocurrency exchanges that have minimal customer identification requirements. The U.N. experts reportedly state that the …

A group of hackers associated with the North Korean regime have kept their crypto extortion efforts alive in 2020. A group of North Korean hackers operating under the name “Lazarus” targeted several crypto exchanges last year, according to a report published by Chainalysis. One of the attacks involved the creation of a fake trading bot which was offered to employees of the DragonEx exchange. Findings show that in March 2019, the hackers stole approximately $7 million in various cryptocurrencies from the Singapore-based exchange. Cybersecurity vendor Cyfirma warned in June about a massive crypto phishing campaign that could be launched by …