South Korea busts alleged North Korean spy ring, handler remains at large

North and South KoreaSOUTH KOREAN AUTHORITIES HAVE busted an alleed spy ring run by a North Korean handler, who remains at large. Two men have been arrested so far in connection with the ring. One of them, identified only as “Lee”, is reportedly the chief executive of a South Korean cryptocurrency exchange. The other man, a Republic of Korea Army officer, is identified as “Captain B.” in court documents.

Lee was arrested on April 2, while Captain B. was arrested on April 15. They are facing charges of violating South Korea’s 1948 National Security Act. Prosecutors alleged that the two men divulged to their North Korean handler the log-in credentials to the online command-and-control portal of the Republic of Korea Armed Forces. The men are accused of having received substantial financial compensation in return for their services.

According to the prosecution, Lee was approached in July 2021 by a North Korean intelligence officer, who recruited him to work for North Korean intelligence. In August of the same year, Lee approached Captain B., and recruited as a subcontractor, with the promise of substantial financial compensation in the form of bitcoin. Captain B. then began giving military secrets to Lee, who passed them on to the North Koreans.

Eventually, Lee’s handler allegedly provided him with a miniature camera hidden inside an electronic watch. Lee gave this spy device to Captain B., along with a hacking device hidden inside a flash drive, which is commonly known as a “poison tap”. This device gave the North Korean handler access to the laptop used by the men to access the South Korean military’s command-and-control portal. The two alleged spies were compensated with nearly $600,000 in bitcoin for their services.

South Korean authorities claim that the North Korean handler of the spy ring, as well as a man who worked as a courier between the handler and the two agents, remain at large. Public court documents do not specify the kind of information that was allegedly accessed by the North Koreans as a result of this breach.

Author: Ian Allen | Date: 29 April 2022 | Permalink

American computer programmer jailed for giving technical know-how to North Korea

North Korea PyongyangAN AMERICAN COMPUTER PROGRAMMER has been jailed for 63 months for providing “highly technical information” to North Korea, which related to cryptocurrency systems, according to United States officials. The programmer, Virgil Griffith, 39, also known as “Romanpoet”, became widely known in the early 2000s, when he began describing himself as a “disruptive technologist”. He later consulted with the Federal Bureau of Investigation and other law enforcement agencies in the area of the dark web and cryptocurrencies.

In later years, however, Griffith developed what his lawyer described as a “curiosity bordering on obsession” with North Korea. The FBI arrested Griffith in November of 2019, accusing him of deliberately providing the North Korean government with “highly technical information” relating to blockchain and cryptocurrency systems. According to US government prosecutors, Griffith committed a crime when he delivered an invited presentation at an international conference on cryptocurrencies in Pyongyang, North Korea, in April of 2019.

Prior to attending the conference, Griffith had been barred from traveling to North Korea by the United States Department of State. He managed to get there anyway and, according to US prosecutors, “advised more than 100 people” on the use of cryptocurrencies to evade banking regulations and international sanctions. Griffith should have known that many of those he spoke to were employees of the North Korean government, US prosecutors said. They argued that Griffith’s actions amounted to an illegal transfer of highly technical knowledge. By attending the conference, Griffith essentially provided services to a foreign power that is hostile to the United States, prosecutors claimed.

Griffith has been given a 63-month prison sentence, which will be followed by a 3-year supervised release. He has also been fined $100,000. As intelNews has previously reported, a United Nations report warned earlier this year that the North Korean missile program has developed rapidly in recent times, partly due to an influx of stolen cryptocurrency, which has now become “an important revenue source” for Pyongyang.

Author: Joseph Fitsanakis | Date: 13 April 2022 | Permalink

Ukraine war is being crowdfunded through cryptocurrencies, experts say

CryptocurrenciesTHE WAR BETWEEN RUSSIA and Ukraine is being crowdfunded with the use of cryptocurrencies, making it history’s first major conflict to occur in the era of cryptocurrencies, according to observers. Crowdfunded conflicts are not new phenomena. In the years following its establishment, Israel is believed to have raised $50 million from individual donors around the world for its army. In the 1970s, militant groups like the Irish Republican Army solicited steady streams of donations from expatriate communities. The difference in this war is the pervasive nature of the Internet and cryptocurrencies, which have become “another front” in the quickly escalating conflict in Ukraine.

The Australian Broadcasting Corporation’s science correspondent, James Purtill, points out that some aspects of this war are being increasingly impacted by decentralized autonomous organizations (DAOs). DAOs are member-owned online communities that engage in crowdfunding activities outside of any government-mandated regulatory framework. They are not governed by boards of directors, but instead maintain their financial transaction records on a blockchain. They therefore operate in a legal grey zone, which is facilitated with the use of cryptocurrencies in financial transactions.

Purtill notes that, in recent years, the administration of Ukrainian President Volodymyr Zelensky had aspirations to become the world’s most cryptocurrency-friendly country. It was therefore not a surprise when, just minutes after the Russian invasion of Ukraine began, the government in Kiev launched an official cryptocurrency fund, named Crypto Fund of Ukraine. As of Monday, the fund had amassed over $22 million and was continuing to grow exponentially. Communities of pro-Ukrainian DAOs, such as Come Back Alive, have mushroomed around these cryptocurrencies, and have raised substantial donations, which are now being used to equip the Ukrainian army and volunteer militias.

There is also concern among experts that the Russian government, as well as individual pro-Kremlin oligarchs, may resort to using cryptocurrencies in order to evade international sanctions. Notably, the use of cryptocurrencies may allow Moscow to overcome the barriers posed by its exclusion from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), which is the global standard for secure financial transactions. Last weekend, Kiev issued calls to the world’s largest cryptocurrency exchanges to block Russian clients, including the Russian government, from conducting transactions. However, experts point out that it is extremely difficult to prevent specific users—including governments— from trading on the blockchain, given its decentralized nature.

Author: Joseph Fitsanakis | Date: 02 March 2022 | Permalink

North Korea uses stolen cryptocurrency to fund its missile program, UN report claims

Kim Jong-un North Korea DPRKTHE NORTH KOREAN MISSILE program has developed rapidly in the past year, partly due to an influx of stolen cryptocurrency, which has now become “an important revenue source” for Pyongyang, according to a United Nations report. The confidential report was produced for the United Nations’ Security Council, by a committee tasked with monitoring the impact of the supranational body’s sanctions on the North Korean economy.

The United Nations imposed sanctions on North Korea in 2006, in response to its announcement that it possessed nuclear weapons. These sanctions have increased over the years, as Pyongyang has continued to advance its nuclear and ballistic missile programs. The sanctions have targeted the communist country’s export industry sectors, including fisheries, textiles, raw materials such as iron, lead and coal, as well as refined energy products.

Now a new report, produced for the United Nations Security Council, suggests that, not only have the sanctions failed to degrade Pyongyang’s nuclear and missile weapons programs, but that the latter actually saw a “marked acceleration” in 2021. The report was delivered last week to the United Nations Security Council by a committee tasked with monitoring the effects of international sanctions on North Korea. According to the Reuters news agency, which accessed the confidential report, it states that North Korea has been able to demonstrate “increased capabilities for rapid deployment, wide mobility (including at sea), and improved resilience of its missile forces”.

Much of this ability comes from funding derived through “cyberattacks, particularly on cryptocurrency assets”, which have now become “an important revenue source” for the North Korean government. These cyberattacks are conducted by North Korean hackers, who regularly target “financial institutions, cryptocurrency firms and exchanges”. According to the report, North Korean hackers were recently able to steal cryptocurrency valued at over $50 million, by attacking just three cryptocurrency exchanges in a period of just 18 months.

The United Nations report comes in the heels of another report, published last month by cybersecurity firm Chainalysis, which alleged that Pyongyang was able to acquire digital assets worth nearly $400 million in 2021 alone. That made 2021 one of the most successful years for North Korean government-sponsored hackers, according to the report. To this one must add cyberattacks that do not target cryptocurrency, which also generate foreign cash supplies for the North Korean government. These generate several hundred million dollars each year, according to research.

Author: Joseph Fitsanakis | Date: 07 February 2022 | Permalink

Extradition fight over Russian man held in Greece may point to spies’ use of bitcoin

Aleksandr VinnikAn intense fight between the United States and Russia over the extradition of a Russian cryptocurrency tycoon being held in Greece, is raising questions about the possible use of cryptocurrencies by spies. The tycoon in question is Aleksandr Vinnik, 39, who in 2011 co-founded BTC-e, an international cryptocurrency-trading platform. BTC-e allowed users to buy or sell several popular cryptocurrencies, including bitcoin and litecoin, using Russian rubles, United States dollars, or European Union euro currencies. Although headquartered in Russia, BTC-e’s servers were located in Bulgaria, while its operations were conducted through its offshore components in Cyprus and the Seychelles.

By 2015, BTC-e was reportedly facilitating just over 3 percent of the worldwide daily volume of cryptocurrency trading. But, according to some sources, the company was also facilitating up to 70 percent of worldwide criminal activity involving cryptocurrencies. Washington alleges that the company was built on a model that relied heavily on the activities of criminal entities, as the latter sought the ability to conduct online monetary transactions without being tracked by governments.

In 2017, American authorities seized BTC-e’s website —a move that terminated the company’s operations. Washington also prompted authorities in Greece to arrest Vinnik, while he was vacationing at a Greek resort with his family. The Russian co-founder of BTC-e is today in a Greek prison, awaiting a decision by the Greek authorities to extradite him to the United States. If this happens, he will be tried on 21 counts of international money laundering and a host of other criminal charges.

Interestingly, however, shortly after Vinnik’s arrest, the Russian government filed a court order to have Greece extradite him to Russia, where he is reportedly wanted for relatively minor fraud-related charges. What is more, the Greek government was directly lobbied by no other than the Russian President Vladimir Putin —an unusually high-level approach, when one considers Vinnik’s trivial charges in Russia. France has also sought to have Vinnik extradited there, instead of the United States.

What lies behind these moves? There are many who believe that American authorities moved against BTC-e after realizing that Russian spies used the company to hide their traces while trying to meddle with the 2016 presidential elections in the United States. A recent report by the State Department’s RFE/RL news website claims that a number of London-based observers from groups such as Global Witness and Elliptic Enterprises believe there are strong links between Russian spy agencies and BTC-e. American authorities have managed to access information about the inner workings of BTC-e’s website. They are probably viewing Vinnik as an intelligence asset, who can potentially shed light on the company’s alleged role as a money laundering mechanism for Russian spies —and probably others as well.

Author: Joseph Fitsanakis | Date: 29 November 2019 | Permalink

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