Blockchain

North Korea may be behind a massive cyber attack on a South Korean bitcoin exchange

Broken representation of the Bitcoin virtual currency, placed on a monitor that displays stock graph and binary codes, are seen in this illustration picture, December 21, 2017. REUTERS/Dado Ruvic/Illustration - RC1F4FD1D3F0

Hacking has become a lucrative business for cyber thieves, particularly in North Korea. Image: REUTERS/Dado Ruvic

Rosie Perper
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South Korea is investigating whether North Korea was involved in a massive cyber attack on a bitcoin exchange in Seoul which caused the exchange to collapse on Tuesday, The Wall Street Journal reported, citing sources familiar with the situation.

Investigators are looking into Seoul-based cryptocurrency exchange Youbit, which was forced to file for bankruptcy Tuesday after it was hacked for the second time this year.

Youbit was previously targeted in April when nearly 4,000 bitcoins were stolen in a cyber attack by a spy agency linked to the North Korean government, Reuters said, citing local South Korean reports.

Investigators may have reason to believe North Korean agents were also behind the latest attack, according to The Journal, given the proximity and nature of the cyber-attacks on Youbit.

Image: Atlanta Tech Village

According to Reuters, Youbit announced on its website that the latest attack occurred at 4:35 a.m. local time Tuesday. The site did not say how many bitcoins were stolen in the heist, but did say 17% of its total assets were gone.

South Korean police and the Korea Internet & Security Agency said an investigation into the attack was underway but they are still determining the source and scope of damage done, The Journal said.

North Korean cyber attacks are on the rise

Pyongyang has reportedly been involved in several high-stakes hacks in recent years.

On Tuesday, the White House accused North Korea of masterminding this year's WannaCry cyber attacks, which affected computer systems in schools, hospitals, and businesses across 150 countries. The malware demanded ransom payments in the form of bitcoin.

While cryptocurrencies themselves are believed to be secure thanks to encryption technology, some cyber thieves are able to hack into digital wallets and cryptocurrency exchanges and steal user information, The Journal said.

And hacking has become a lucrative business for cyber thieves, particularly in North Korea where sanctions have taken a toll on its economy.

“North Korea is an ideal country to use hacking and financial tools like bitcoin,” Troy Stangarone, a senior director at the Korea Economic Institute in Washington, told The Journal. “They’re experimenting with ways to earn back lost money from sanctions.”

North Korea has denied any involvement in recent bitcoin hacks.

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