North Korea is hacking Bitcoin exchanges to get round international sanctions

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North Korea has hacked at least three Bitcoin exchanges in a bid to steal money and circumvent international sanctions, security experts have said.

According to cyber security firm FireEye, hackers linked to the despotic regime have hacked three cryptocurrency exchanges in South Korea in order to steal Bitcoin.

The firm also says that North Korea has a history of using cyber attacks to target banks and steal money.

“Now, we may be witnessing a second wave of this campaign: state-sponsored actors seeking to steal Bitcoin and other virtual currencies as a means of evading sanctions and obtaining hard currencies to fund the regime,” FireEye’s Luke McNamara wrote.

The firm says that Bitcoin’s surge in value this year has made it a target for North Korean hackers.

One exchange that is believed to have been hacked is Bithumb, the largest cryptocurrency exchange in South Korea. Bithumb was reportedly hacked in April but details of the hack were not made public until June.

Mr McNamara says North Korean hackers use a technique called spearphishing, as well as malware attacks to target the Bitcoin exchanges.

Spearphishing involves targeting the personal email and social media accounts of employees in order to try and obtain login credentials to company networks or files.

Once inside the network the hackers steal the Bitcoin before making withdrawals in US dollars or Korean won.

“It should be no surprise that cryptocurrencies, as an emerging asset class, are becoming a target of interest by a regime that operates in many ways like a criminal enterprise,” Mr McNamara said.

“While at present North Korea is somewhat distinctive in both their willingness to engage in financial crime and their possession of cyber espionage capabilities, the uniqueness of this combination will likely not last long-term as rising cyber powers may see similar potential.

“Cyber criminals may no longer be the only nefarious actors in this space.”

FireEye’s report is yet more bad news for Bitcoin.

Earlier this week two events caused the value of the digital currency to plunge.

On Tuesday a leading financial expert dubbed the Bitcoin market a ‘fraud’.

Jamie Dimon, chief executive of JPMorgan Chase & Co said Bitcoin “is a fraud” and will blow up.

Speaking at a bank investor conference in New York, Dimon said, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

Dimon said that if any JPMorgan traders were trading the crypto-currency, “I would fire them in a second, for two reasons: It is against our rules and they are stupid, and both are dangerous.

The Bitcoin market was then sent into further chaos on Wednesday when China announced a crackdown on ICOs, the process of fundraising through launches of token-based digital currencies.

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