North Korean Hackers Infiltrating Crypto Startups: A Recipe for Disaster?
A recent investigation by ZachXBT, a well-known cryptocurrency detective, suggests that up to 920 North Korean hackers may be working undercover within cryptocurrency companies. This revelation raises serious concerns about the security and future of these startups.
ZachXBT’s findings indicate that these North Korean operatives are not particularly sophisticated in their methods. Their presence, marked by easily detectable red flags, points to a significant level of negligence on the part of the companies that employ them.
A Google report from April highlighted the global reach of these hacking groups, with a focus on European countries and even a presence in Brazil.
Millions in Crypto Paid to North Korean Hackers
According to ZachXBT’s investigation, North Korean hackers have received a staggering $16.6 million in cryptocurrency since the beginning of the year, averaging $2.76 million per month. Considering estimated salaries ranging from $3,000 to $5,000, this suggests that hundreds of North Korean hackers are employed by companies in various countries.
ZachXBT shared an analysis of one of the six groups he has been monitoring, identifying eight North Korean IT workers who have secured positions in over 12 projects. He traced payment addresses to two consolidation addresses.
ZachXBT has also revealed some of the individuals involved, including one “Sandy Nguyen,” who claims to be a web3 engineer but was seen at an event in Russia holding a North Korean flag.
Negligence Fuels the Problem
The risks associated with hiring these hackers are substantial, including data breaches and the insertion of malicious code leading to significant thefts. ZachXBT argues that the root of the problem lies in the negligence of the companies themselves, who often ignore clear warning signs.
These red flags include refusing in-person interviews despite claims of local residence, using Russian IP addresses, changing usernames on GitHub, and deleting LinkedIn profiles. These hackers often hold multiple positions simultaneously and are frequently fired for poor performance, resulting in high turnover.
Even Circle, the issuer of the USDC stablecoin, has been implicated in the investigation due to its apparent lack of preparedness against industry attacks.
ZachXBT also notes that many hackers are using American cryptocurrency exchanges to launder funds, although offshore exchanges remain a popular choice.
“I believe that when a team hires multiple DPRK ITWs it is a decent indicator for determining that startup will be a failure,” ZachXBT stated. “Unlike other threats to the industry DPRK ITWs have little sophistication so it’s mainly the result of a team’s own negligence.”
While the investigation primarily focuses on the cryptocurrency industry, ZachXBT believes the problem could be even more widespread in traditional companies. However, because salaries are paid in dollars or other currencies, tracking these transactions is more difficult.
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