G-7 Leaders Eye Talks on North Korea’s Crypto Hacks at Summit

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(Bloomberg) — Group of Seven leaders may discuss North Korea’s malicious cyber activities and crypto hacks at a summit in Canada next month, according to people familiar with the plans, reflecting mounting global concerns over Pyongyang’s growing online thefts.

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The people, who spoke on condition of anonymity to discuss private deliberations, said North Korea’s nefarious cyber operations are alarming as the stolen proceeds have become a key funding source for the regime and its programs. They cautioned that the agenda for the summit taking place in Alberta in mid-June has yet to be finalized. Discussions at the gathering will likely be dominated by the wars in Ukraine and the Middle East, as well as the trade standoff between the US and most of the other G-7 nations, the people said.

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Escalating worries about North Korea’s malicious activities come as Pyongyang deepens its relations with Russia, providing weapons and troops for Moscow’s war against Ukraine. After repeated denials, both countries recently admitted that North Korean forces were fighting alongside Russians in the Kursk border region.

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Since making a splash in 2014 with an audacious hack of Sony Pictures Entertainment, North Korea has built a formidable army of hackers adept as using malicious code to infect computers and demand ransom from victims, largely in the form of cryptocurrency. These groups have also stolen billions of dollars worth of digital assets directly from cryptocurrency companies, accounting for some of the biggest cyber thefts to date. The illicit proceeds have helped the hermit kingdom circumvent international sanctions and fund its operations, including programs to develop weapons of mass destruction, authorities have said.

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Earlier this year $1.5 billion in crypto was stolen from digital asset exchange Bybit in a single heist tied to North Korea. That came after North Korea-affiliated hackers stole $1.34 billion from digital asset companies and projects across 47 incidents last year, up from $661 million across 20 incidents in 2023, according to blockchain analytics firm Chainalysis. 

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One of the more pressing concerns is North Korea’s expansive use of IT workers abroad, who apply for jobs under false identities and send their earnings back to their country. Crypto exchange Kraken recently disclosed that a North Korean hacker had applied for an engineering role at the company. Kraken said its security team “uncovered a hacking operation where one individual had established multiple identities to apply for roles in the crypto space and beyond.”

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North Korea “has dispatched thousands of skilled IT workers to live abroad, primarily in China and Russia, with the aim of deceiving US and other businesses worldwide into hiring them as freelance IT workers to generate revenue for the regime,” the US Justice Department said in January release. These “IT worker schemes involve the use of pseudonymous email, social media, payment platform and online job site accounts, as well as false websites, proxy computers, and witting and unwitting third parties located in the United States and elsewhere.”

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According to the release, “such IT workers have been known individually earn up to $300,000 annually, generating hundreds of millions of dollars collectively each year, on behalf of designated entities, such as the North Korean Ministry of Defense and others directly involved in the DPRK’s weapons of mass destruction programs.”

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—With assistance from stacy-marie ishmael.

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