North Korea’s Crypto Scheme: IT Worker Disguise Funds Military

• North Korean IT workers infiltrated crypto projects using false identities.
• Funds laundered through decentralized exchanges finance North Korea’s military programs.
• The FBI and Treasury Department are increasing scrutiny of the crypto firms involved.  

North Korea is secretly infiltrating the cryptocurrency sector by disguising its citizens as IT workers and using other deceptive tactics to channel funds into the regime’s military programs.

The finding came through as U.S. authorities increased scrutiny on decentralized exchanges (DEX) involved in suspicious activities.

Investigations show how North Korea, known for exploiting vulnerabilities in cryptocurrency systems, is now preying on the sector’s decentralized and largely unregulated nature. Sources say DPRK-affiliated IT workers have falsified documents to gain access to high-profile blockchain projects undetected.

Many crypto companies, including startups, have unknowingly hired these workers, allowing North Korea to divert millions of dollars into its state-run organizations.

DeFi Platforms Particularly Vulnerable

By posing as freelancers, these workers have gotten jobs on major blockchain networks like Cosmos Hub and Fantom. Authorities traced these funds back to sanctioned entities linked to North Korea.

As the U.S. Treasury Department and other global regulators intensify their investigations, unknowingly hiring North Korean workers could result in severe penalties for these crypto firms.

Read also: Crypto Scams Cost Americans $5.6 Billion in 2023: FBI Report

Reports indicate the illicit funds support North Korea’s nuclear and weapons programs. The FBI says decentralized finance (DeFi) platforms are particularly vulnerable to this infiltration, with North Korean hackers frequently targeting them to steal cryptocurrencies, worsening the issue.

North Korean Attackers Employ Complex Social Engineering Hacks

The FBI recently warned that North Korean hackers are targeting employees of crypto firms to steal assets through “complex” social engineering attacks.

Read also: FBI Warns of North Korean Hackers Targeting Crypto Firms

In a notice released on September 3, 2024, the FBI detailed the potential threats of malware attacks by North Korean hackers targeting crypto exchanges, ETFs, and DeFi platforms. The agency also highlighted the detailed schemes these hackers employ to deploy sophisticated malware to users’ systems and steal significant amounts of crypto assets.

North Korea’s exploitation of the decentralized crypto industry is a serious warning to all stakeholders.