Binance Helps US OFAC Seize North Korea Cybercrime Entities' $4.4M Crypto

North Korean hacking syndicates were linked to the highlighted holdings in legitimately served warrants.

In response to OFAC input, the Binance Investigation Unit seizes illicit revenue.

Binance announced on its official Twitter account that its internal investigations team collaborated with U.S. law enforcement to successfully seize the illicit funds. Its Twitter threat lauds the coordinated purge for effectively impeding the illicit financing process of four North Korean entities subject to sanctions.


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Since the accounts were flagged a year ago, the firm has taken preventative action against the proceeds held in the accounts, as detailed in a tweet by the company. The spokesperson responded affirmatively to a question regarding whether or not Binance has ongoing collaborative efforts.

The leading cryptocurrency exchange in terms of transaction volume employs continuous surveillance of its platform to root out actors backed by a nefarious state in order to generate illicit revenue. Such occurrences necessitate cooperation with law enforcement.

The disclosure of Binance's facilitation efforts comes 48 hours after the May 23 announcement by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury that it had sanctioned a person and four entities for cybercrime. The agency imposed the sanctions based on the involvement in malevolent cyber activities deemed to finance the Democratic People's Republic of Korea (DPRK) government.


OFAC Unmasks North Korea's Chinyong-Led Hacking Network

OFAC identified the sanctioned entities as being managed by Chinyong Information Technology Cooperation Company (CITCC), which operates with a global network of highly trained IT specialists who are interconnected. In addition to the Technical Reconnaissance Bureau (TRB), the DPRK also utilizes the Pyongyang University of Automation, which collaborates with the 110th Research Center.

OFAC identifies Chinyong as a well-coordinated unit that utilizes the advanced skills of IT specialists and is tasked with generating revenue to finance the DPRK's illegal WMD production and ballistic missile programs.

OFAC cited past investigations showing that Chinyong workers frequently use stolen or fabricated identities when applying for IT-related jobs abroad. The majority end up in tech and crypto workplaces, where they assume false identities to launder funds destined for North Korea through cryptocurrency exchanges.


OFAC identifies Kim Man as the Principal Hacker for the Lazarus Group.

OFAC identified Kim Sang Man as a critical member of the cybercrime syndicate. The law enforcement agency suspected Kim of facilitating the payment of salaries to relatives of the DPRK staff delegation. OFAC asserts that Kim earned $2 million in cryptocurrencies in exchange for providing IT equipment to DPRK-affiliated entities in Russia and China.


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According to the Treasury Department, the DPRK's Technical Reconnaissance Bureau develops offensive cyber tactics. In addition, the TRB provides the apparatus utilized by cybercriminals, including Lazarus Group affiliates.

OFAC has previously linked the Lazarus Group to the theft of multiple blockchain initiatives. OFAC identified the DPRK's group as the mastermind behind a $620 million attack on the Axie Infinity's Ronin Bridge in March of last year.

Changpeng Zhao, the chief executive officer of Binance, intervened in April to confiscate and recover $5.8 million. The proceeds were traced to Lazarus Group after the movement of illicit funds across the Binance exchange was detected.


North Korean Hackers Attack Asian Cryptocurrency Exchanges

The Elliptic report predicts that cybercrime syndicates in North Korea will generate over $2.3 billion in 2022, making coordinated action against them imperative. In addition, 60 percent of DPRK hacker-caused losses were incurred by Asian nations, according to the investigation report.

According to the Elliptic report, Japan suffered the most losses in 2022, totaling $721 million, with crypto accounting for 60% of the proceeds, or $640 million. The report commissioned by Nikkei ranked Vietnam's loss at $540 million second and the United States' loss at $497 million third. The hackers from North Korea cost Hong Kong $281 million.

The blockchain-based analytics company estimates that the loss of $721 million from Japan exceeds eightfold the value of North Korea's exports in 2021. Japan, Vietnam, and Hong Kong are susceptible due to inadequate security on their respective cryptocurrency markets.


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Defeating the Lazarus Group in Japan, Vietnam, and Hong Kong requires a coordinated enforcement action completely supported by crypto exchanges replicating Binance and OFAC's move to identify and seize illicit revenue.

Orizu Chisimdi

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