Handcuffed by sanctions, North Korea seeks cash via cyber theft
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Handcuffed by sanctions, North Korea seeks cash via cyber theft

Some of the 7,000 hackers trained by Pyongyang pose as beautiful women on Facebook, strike online conversations and then send malicious ransomware files

A man is reflected on a screen showing exchange rates of cryptocurrencies at an exchange in Seoul on December 20, 2017.
(AFP PHOTO / JUNG Yeon-Je)
A man is reflected on a screen showing exchange rates of cryptocurrencies at an exchange in Seoul on December 20, 2017. (AFP PHOTO / JUNG Yeon-Je)

SEOUL, South Korea (AFP) — The messages are alluring, the pictures are attractive. But the women seeking to beguile South Korean Bitcoin executives could actually be hackers from Pyongyang in disguise, experts warn.

In the face of sanctions over its banned nuclear and ballistic missile programs, the cash-strapped North is deploying an army of well-trained hackers with an eye on a lucrative new source of hard currency, they say.

Its cyber warfare abilities first came to prominence when it was accused of hacking into Sony Pictures Entertainment to take revenge for “The Interview,” a satirical film that mocked its leader, Kim Jong-Un.

But it has rapidly expanded from political to financial targets, such as the central bank of Bangladesh and Bitcoin exchanges around the world, with Washington this week blaming it for the WannaCry ransomware that wreaked havoc earlier this year.

Screenshot of a ransomware exploit (Courtesy)

And a South Korean crypto currency exchange shut down on Tuesday after losing 17 percent of its assets in a hacking — its second cyber attack this year — with the North accused of being behind the first.

According to multiple South Korean reports citing Seoul’s intelligence agency, North Korean hackers approach workers at digital exchanges by posing as beautiful women on Facebook, striking online conversations and eventually sending files containing malicious code.

They also bombard executives with emails posing as job seekers sending resumes — with the files containing malware to steal personal and exchange data.

Moon Jong-Hyun, director at Seoul cybersecurity firm EST Security, said the North had stepped up online honeytrap tactics targeting Seoul’s government and military officials in recent years.

“They open Facebook accounts and maintain the online friendship for months before backstabbing the targets in the end,” Moon told a cybersecurity forum, adding that many profess to be studying at a US college or working at a research think tank.

A computer screen at the Cboe Global Markets exchange (previously referred to as CBOE Holdings, Inc.) shows Bitcoin futures prices and trades on December 19, 2017 in Chicago, Illinois. (Scott Olson/Getty Images/AFP)

Simon Choi, director of Seoul cybersecurity firm Hauri, has accumulated vast troves of data on Pyongyang’s hacking activities and has been warning about potential ransomware attacks by the North since 2016.

The United States has reportedly stepped up cyberattacks of its own against Pyongyang.

But Choi told AFP, “The North’s hacking operations are upgrading from attacks on ‘enemy states’ to a shady, lucrative moneymaking machine in the face of more sanctions.”

Pyongyang’s hackers have shown interest in Bitcoin since at least 2012, he said, with attacks spiking whenever the crypto currency surges — and it has soared around 20-fold this year.

Illustrative: Staff monitoring the spread of ransomware cyberattacks at the Korea Internet and Security Agency (KISA) in Seoul, May 15, 2017. (AFP/ YONHAP)

US cybersecurity firm FireEye noted that a lack of regulations and “lax anti-money laundering controls” in many countries make digital currencies an “attractive tactic” for the North.

Crypto currencies, it said in a September report, were “becoming a target of interest by a regime that operates in many ways like a criminal enterprise.”

It documented three attempts by the North to hack into Seoul cryptocurrency exchanges between May and July as a way to “fund the state or personal coffers of Pyongyang’s elite.”

In October, Lazarus, a hacking group linked with the North, launched a malicious phishing campaign targeting people in the bitcoin industry with a fake but lucrative job offer, according to US cybersecurity firm Secureworks.

Hacking attacks targeting digital currencies are only the latest in the long list of alleged online financial heists by the North.

The North is blamed for a massive $81 million cyber-heist from the Bangladesh Central Bank (BCB) in 2016, as well as the theft of $60 million from Taiwan’s Far Eastern International Bank in October.

Map locates top 20 countries affected in the first hours of the global ransomware cyberattack in May 2017. (AP)

Although Pyongyang has angrily denied the accusations — which it described as a “slander” against the authorities — analysts say the digital footprints left behind suggest otherwise.

The attack on the BCB was linked to “nation-state actors in the North,” cyber security firm Symantec said, while the Taiwanese bank theft had some of the “hallmarks” of Lazarus, according to the British defense firm BAE Systems.

Proceeds from such actions are laundered through casinos in the Philippines and Macau or money exchanges in China, said Lim Jong-In, a cyber-security professor at Korea University in Seoul, making it “virtually impossible” to trace.

The global WannaCry ransomware attack in May infected some 300,000 computers in 150 nations, encrypting their files and demanding hundreds of dollars from their owners for the keys to get them back.

Experts say that young hacking talents are handpicked at school to be groomed at elite Kim Chaek University of Technology or Kim Il Sung Military University in Pyongyang, and now number more than 7,000.

This file photo taken on August 9, 2017, shows pedestrians walking past a huge screen in Tokyo displaying news footage of North Korean leader Kim Jong-Un. (AFP PHOTO / Kazuhiro NOGI)

They were once believed to be operating mostly at home or in neighboring China, but analysis by cyber security firm Recorded Future noted “significant physical and virtual North Korean presences” in countries as far away as Kenya and Mozambique.

FireEye CEO Kevin Mandia put the North among a quartet of countries — along with Iran, Russia and China — that accounted for more than 90 percent of cybersecurity breaches the firm dealt with.

Its hackers, he said, were “interesting to respond to and hard to predict.”

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