Seoul's New Cyber Bill Aims to Curb North Korea's Illicit Crypto Assets

South Korea is gearing up to strengthen its cybersecurity measures in order to counter North Korean cyberattacks, particularly those involving cryptocurrencies.

According to local reports, senior government officials believe that crypto plays a vital role in facilitating Pyongyang's illicit weapons programs, pointing out a perceived lack of vigilance in the previous administration. The upcoming legislation aims to tackle the exploitation of digital assets acquired by North Korean hackers, which was not included in the initial draft proposed by the National Intelligence Service (NIS) last year.

Intelligence reports have revealed that in 2022 alone, North Korean hackers managed to steal coins worth $1.28 billion through ransomware, scams, fraud, and other cyberattacks. This highlights the urgency of implementing strong countermeasures.

Yoon Han-hong, a representative of the People Power Party serving on the National Policy Committee, stated that North Korean hackers have likely funneled approximately $52.46 million in crypto assets through South Korean exchanges over the past four years.

Anne Neuberger, the US Deputy National Security Advisor for Cyber and Emerging Technology, has revealed that about half of North Korea's missile program financing comes from digital theft and cyberattacks. This information aligns with the increase in the country's missile tests, indicating a surge in both cyber and military activities.

Chainalysis, a blockchain analytics firm, has corroborated these claims, stating that North Korea has illicitly obtained over $3 billion through cybercrime in the past five years. Furthermore, experts from the United Nations sanctions have linked North Korea to using stolen funds to support its prohibited nuclear and missile programs.

South Korea's action coincides with the heightened scrutiny of North Korean hackers by the US Federal Bureau of Investigation (FBI). In August, the bureau identified six Bitcoin wallets connected to the Lazarus Group, a North Korean hacking syndicate, containing approximately $40 million worth of Bitcoin (BTC).