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N Korea at crossroads

North Korea's hacker army stole up to $2bn, UN finds

Agents set up shop across the globe to grab cryptocurrencies

North Korea has expanded its scope and sophistication of its cyber operations, according to the UN.   © Reuters

NEW YORK -- North Korean online operatives have illegally acquired as much as $2 billion over three years, according to a draft United Nations report obtained by Nikkei, underscoring how far the government has evaded financial sanctions.

At least 35 cyberattacks have been carried out in 17 countries, the still-unpublished report says. Hacks targeted financial institutions and cryptocurrency exchanges, and also involved cryptocurrency mining.

Multiple cryptocurrencies were involved. The proportion of revenue obtained through cyberattacks has increased compared with other fund procurement methods, the draft says.

The expert panel's midterm report, to be presented as early as September, outlines the effectiveness of the international sanctions from this past February. The Security Council's North Korea sanctions committee recently received the draft, which will be discussed and revised at the council ahead of its release.

The expert panel released an annual report in March that characterized North Korean cryptocurrency attacks for the first time. The new draft goes further in depicting the increasing scope and sophistication of Pyongyang's online activities.

A professional branch of the North Korean military has taken up cryptocurrency mining. In one instance, hackers reportedly created about $25,000 in a cryptocurrency by infecting a company's computer with so-called cryptojacking malware.

Cryptocurrency anonymity makes it difficult to track the total amount of income obtained through cryptojacking, a means favored by North Korea, the report finds.

Pyongyang has dispatched hundreds of information technology workers, such as software developers, to Asia, Europe, Africa and the Middle East, the draft states. They then run asset theft operations, such as for cryptocurrencies, behind front companies nominally headed by locals. The North Korean actors who actually run the businesses earn between $3,000 and $5,000 a month on average, sending much of it back home.

A North Korean body overseeing the regime's nuclear and ballistic missile development also supervises the IT workers deployed overseas. Funds from the covert operations are suspected of being applied to the weapons programs.

The draft also describes how ship-to-ship transfers of coal and petroleum remain rampant since last year. North Korea exported at least 930,000 tons of coal though at least 127 deliveries during the first four months of 2019, flouting a U.N. ban. The report estimates the coal's value at $93 million.

Pyongyang has exceeded the 500,000-barrel annual import cap on refined petroleum products, the draft states. Vessels serving the regime can evade limits by shutting off onboard automatic identification systems or by being disguised as foreign, it says.

But differences in opinion persist on the Security Council. North Korea's longtime backer China will likely call for a more moderate pressure campaign.

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