By Oyintari Ben
According to blockchain analysis company Chainalysis, hackers linked to North Korea stole $1.7 billion (£1.4 billion) in cryptocurrency in 2022.
The previous national record for cryptocurrency theft, $429 million in 2021, is almost quadrupled by this.
The business described last year as “the largest year ever for crypto hacking,” The windfall accounted for 44% of the $3.8 billion taken in cryptocurrency breaches.
According to experts, the nation is using crypto theft to fund nuclear weapons because it is under severe sanctions.
Analysts predict North Korea will perform its seventh nuclear test this year, as its nuclear weapons programme is advancing under leader Kim Jong-un. The country has already conducted six nuclear tests. Pyongyang fired an unprecedented number of ballistic and other missiles last year. This is true despite the nation’s weak economy.
Considering that North Korea exported $142 million worth of commodities in 2020, it is reasonable to assume that the country’s economy is significantly impacted by cryptocurrency hacking, according to a report released on Wednesday by Chainalysis.
According to the company, these hackers frequently employ “mixers,” which combine bitcoins from different users to conceal the source of the payments.
In accordance with assertions made by other experts, North Korea uses non-fungible tokens and brokers in China to conceal the use of stolen cryptocurrency (NFTs).
The FBI announced this month that the Lazarus Group, which has ties to North Korea, was behind a $100 million cryptocurrency theft on the Horizon bridge blockchain network in 2017.
In total, decentralised finance protocols, or DeFi, were responsible for more than 82% of the cryptocurrency lost in 2022, according to an analysis by Chainalysis.
DeFi users can use their cash confidently because the smart contract codes governing these protocols are, by default, made publicly available.
As the codes are transparent, hackers can scan them for flaws and “attack at the optimum time” to maximise their wealth, which makes DeFi particularly appealing to them, the report claims.
According to David Schwed, the chief operating officer at the blockchain security company Halborn, DeFi developers “prioritise growth over all else” and frequently divert cash that could be used to improve security to awards to draw users.
In order to make their platforms more secure, DeFi developers can learn from conventional financial institutions, Mr Schwed said.
