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Cybersecurity


TO STEM NORTH KOREA’S MISSILES PROGRAM, WHITE HOUSE LOOKS TO ITS HACKERS

The Biden administration is doing more to counter North Korean hackers amid
concerns their cryptocurrency heists are powering the country’s weapons
programs.



A February 2023 broadcast shows an image of a North Korean military parade held
in Pyongyang. The Biden administration believes cryptocurrency heists have
become a lifeline for the regime's weapons program. | Jung Yeon-Je/AFP via Getty
Images

By John Sakellariadis

12/22/2023 05:00 AM EST

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 * * Link Copied
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The Biden administration has spent much of the last two years bracing key U.S.
networks and infrastructure against crippling cyberattacks from Russia, Iran and
China.

But it is following a different playbook as it ramps up its efforts to thwart
digital threats from North Korea: Follow the crypto — and stop it.



Convinced North Korea primarily sees hacking as a way to funnel money back to
the cash-strapped Kim Jong Un regime, the White House has focused on blocking
the country’s ability to launder the cryptocurrency it steals through its
cyberattacks.



In the last year, the administration has unveiled a flurry of sanctions against
North Korean hacking groups, front companies and IT workers, and blacklisted
multiple cryptocurrency services they use to launder stolen funds. Earlier this
month, national security adviser Jake Sullivan announced a new partnership with
Japan and South Korea aimed at cracking down on Pyongyang’s crypto bonanza —
thereby choking off money to its nuclear and conventional weapons programs.

“In countering North Korean cyber operations, our first priority has been
focusing on their crypto heists,” Anne Neuberger, the National Security
Council’s top cybersecurity official, said in an interview.

The stepped-up effort to blunt North Korea’s cyber operations is fueled by
growing alarm about where the fruits of those attacks are going, Neuberger said.

Hacking, she argued, has enabled North Korea to “either evade sanctions or evade
the steps the international community has taken to target their weapons
proliferation … their missile regime, and the growth in the number of launches
we’ve seen.”

Poor regulation and shoddy security in the fast-growing cryptocurrency industry,
which is dominated by start-ups, make it an easy target for Pyongyang’s hackers.
Because of crypto’s inbuilt privacy features and the fact that it can be sent
across borders at the click of a mousepad, it also offers a powerful tool to
circumvent sanctions.

North Korea has conducted roughly 100 ballistic missile tests in the last year,
and it staged its first intercontinental ballistic missile test in five months
on Monday. Between November and August, it also exported more than a million
artillery shells to Russia, according to South Korean intelligence services.

U.S. officials increasingly believe the key to slowing that type of activity
lies at the intersection of hacking and cryptocurrency.

Last year, Pyongyang-linked hackers stole roughly $1.7 billion worth of digital
money, according to estimates from cryptocurrency tracing firm Chainalysis.

And in May, Neuberger estimated that about half of North Korea’s missile program
is funded by cyberattacks and cryptocurrency theft.

North Korean hackers “directly fund” North Korea’s weapons of mass destruction
and ballistic missile programs, said State Department spokesperson Vedant Patel.




Until recently, North Korea’s cyber prowess has garnered relatively little
attention in Washington. Fear of digital strikes spilling over from the
conflicts in Ukraine and Gaza, or during a possible Chinese invasion of Taiwan,
has overshadowed the issue, experts say.

Cybersecurity

How hackers piled onto the Israeli-Hamas conflict

By Antoaneta Roussi and Maggie Miller | October 15, 2023 12:00 PM

“People tend to think, … how could the quote-unquote ‘Hermit Kingdom’ possibly
be a serious player from a cyber perspective?” Adam Meyers, a senior vice
president at cybersecurity firm CrowdStrike, said in an interview. “But the
reality couldn’t be further from the truth.”

Pyongyang’s hackers have repeatedly caught Western companies off-guard with
their technical ingenuity, an ability to blend old-fashioned spy tricks with
cyber operations and sheer brazenness, according to private sector researchers.

And while those who study North Korean cyber operations say their proficiency at
stealing cryptocurrency represents a major challenge to the West today, they
also argue it would be dangerous to pigeonhole Pyongyang as little more than a
money-stealing threat.

By some metrics, North Korea has launched more than a dozen supply-chain attacks
in the last year — a sophisticated tactic in which hackers compromise the
software delivery pipeline to get nearly unfettered access to a wide range of
companies.

The significance of those attacks has been “extremely underplayed in the
public,” said Tom Hegel, a threat researcher at cybersecurity firm SentinelOne,
because they caused little harm outside the direct victims of the attacks —
often individuals or obscure cryptocurrency startups.

But some of the same techniques they’ve honed in targeting those firms could
have been used to cause widespread digital disruption, say cybersecurity
experts.

In April, researchers at cybersecurity firm Mandiant uncovered that North Korean
hackers had pulled off the first publicly known instance of a “double” software
supply-chain hack — jumping from one software maker into a second and from there
to the company’s customers.

Mandiant assessed the hackers were after cryptocurrency. Had they wanted to,
however, the North Koreans could have used tactics like that to inflict “a
massive level of damage,” said SentinelOne’s Hegel.

What North Korea “is able to do on a global scale, no one has replicated,” added
Mick Baccio, global security adviser at security firm Splunk.

Asked about her level of concern that North Korean hackers had grown more
capable and could pivot to destructive activity, Neuberger acknowledged
Pyongyang’s hackers are “capable, creative and aggressive.”

But she said the White House was confident the North Koreans are focused on
stealing money or intellectual property that could be used for the country’s
weapons programs. She also argued that cutting off the profitability of North
Korea’s hacks is one of the best ways to deter them.

“The goal is to aggressively cut the profitability of the regime’s hacking,” she
said.

North Korea’s proficiency in computer warfare has surprised onlookers for almost
a decade now.


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They famously burst onto the public consciousness in 2014, when Pyongyang’s
operatives hacked into Sony Pictures Entertainment and threatened the movie
studio against releasing “The Interview,” a raunchy comedy that portrayed the
assassination of Kim Jong Un. Years later, in 2017, they unleashed a
self-spreading computer virus that is estimated to have caused billions of
dollars in damages in a matter of hours.

But in addition to the growing technical proficiency of North Korean hackers, it
is the volume and variety of their activity that has recently alarmed onlookers.

In the last 18 months, U.S. intelligence agencies have warned that Pyongyang is
targeting think tanks and academics to collect intelligence and staging
ransomware attacks — in which they scramble victims’ data until they pay an
extortion fee — against U.S. healthcare companies.

More recently, the Justice Department, FBI and Treasury Department have also
accused Pyongyang of dispatching thousands of tech workers to Russia and China,
where they secured remote IT jobs with global companies under a false identity,
and then funneled their salaries back to the regime.

In one recent case that received little attention outside the region, North
Korean hackers conspired with insiders at a South Korean data recovery company
to bilk millions from unwitting victims of Pyongyang’s attacks.

Just a fraction of that money appears to have found its way back to Pyongyang,
according to South Korean law enforcement. But the scheme dated back to 2017 and
involved a variant of ransomware that was not previously linked to Pyongyang.

The case speaks to how creative the country has gotten at finding ways to avoid
scrutiny and skirt international sanctions, said Erin Plante, vice president of
investigations at Chainalysis.

“It shows that they’re always thinking outside the box, evolving and keeping up
with the news in the same way we do, which is a little bit scary,” she said.

Michael Barnhart, a North Korea expert at cybersecurity firm Mandiant, said the
scheme was reminiscent of several other operations the country’s hacking forces
have pulled off in recent memory — some of which are not yet public.

The common theme, he argued, was how adept Pyongyang has become at mixing cyber
operations with more traditional spying and money laundering tactics.

“This is a very, very well-organized criminal family,” he said.


 * Filed under:
 * White House,
 * Cyber Security,
 * North Korea,
 * Foreign Affairs,
 * Hacking,
 * Cyberattack


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