North Korea is thought to be behind a heist on Asia’s leading cryptocurrency exchange Coincheck last month, in which 58bn yen ($526m) was stolen.
Hackers used a security loophole to gain access to the Coincheck systems late last year. Coincheck had been storing coins in “hot wallets”, meaning that they were accessible via external, connected networks.
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Likewise, multi-signature security, which requires multiple sign-offs before funds can be transferred, wasn’t in use.
As a results, hackers were able to make off with a large amount of NEM, a bitcoin alternative that has been growing in popularity in Japan since late last year.
A South Korean intelligence agency has been investigating the hack since it occurred on 26 January.
Yonhap News Agency reported that the agency, which has decided to remain anonymous, has told South Korea’s National Assembly that they suspect that Kim Jong-un’s North Korea was likely behind the attack.
North Korea has been accused of a string of hacks on South Korean exchanges in the past.
The National Intelligence Service suspects that the rogue state was behind an attack on Youbit in December.
The South Korean exchange was forced to declare bankruptcy shortly after $35m was taken from its customers.
They allege that tens of billions of won have previously been stolen. However, the regime has never been linked to an attack of this magnitude.
Why it matters:
This heist raises questions over the safety of your cryptocurrency when lift in exchanges such as Coincheck. As Verdict reported last year, cryptocurrency owners have no proof that they actually own their tokens. This leaves them vulnerable to losses when hacks like this occur.
However, more worrying is North Korea’s alleged involvement.
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According to Bloomberg, cyber security experts fear that the regime is using stolen cryptocurrency to fund its nuclear weapons program following United Nations’ sanctions on the state, which saw North Korea’s export revenue plummet in 2017.
What was said:
Kim Byung-kee, a member of South Korea’s parliamentary intelligence committee, told Reuters:
North Korea sent emails that could hack into cryptocurrency exchanges and their customers’ private information and stole [cryptocurrency] worth billinos of won.
With the stolen cryptocurrency worth approximately $526m, the Coincheck heist was the biggest in history. It surpassed the previous record of $470m stolen from the Mt Gox exchange in 2014.
Coincheck has promised to refund most of the money stolen in the hack.
The exchange has stated that it will cover the loss of about 90 percent of the stolen coins. However, that still leaves its customers $52m out of pocket.