In a significant incident of cryptocurrency theft, hackers linked to North Korea have been accused of stealing around $1.5 billion in ethereum from a Dubai-based company. This case, involving Bybit, one of the foremost crypto exchanges worldwide, falls under a series of thefts attributed to cyber groups known as TraderTraitor and the Lazarus Group, which are backed by North Korea. The hackers reportedly spread trading applications modified to incorporate malware aiding in the cryptocurrency heist.
An FBI warning issued online has directly linked this breach to North Korean-backed cybercriminals. According to the FBI, these attackers have quickly acted to convert a fraction of the stolen cryptocurrency into other digital assets like Bitcoin, spreading them across numerous blockchain addresses. The agency anticipates that these assets will be further laundered before being transformed into traditional currency.
While North Korean state media has remained silent regarding these allegations, South Korea’s intelligence agency estimates that North Korea has pilfered about $1.2 billion in cryptocurrency in recent years. This illegal accumulation of virtual assets provides a crucial lifeline of foreign currency to their struggling economy and purportedly supports the nation’s nuclear weapons agenda, especially given stringent U.N. sanctions and restrictive measures prompted by the COVID-19 pandemic.
Parallel investigations are also underway by a U.N. expert panel into 58 suspected North Korean cyberattacks between 2017 and 2023, which are believed to have siphoned around $3 billion, ostensibly funding the development of weapons of mass destruction. In response to the FBI’s recent announcement, Bybit’s co-founder and CEO, Ben Zhou, publicly recognized the cyber theft on social media and linked to a site offering $140 million as a bounty for help in tracking and freezing the stolen assets.
Bybit reported that the theft involved a routine transfer of ethereum from an offline storage wallet that was manipulated. This exploit, associated with blind signing, deceives users through a nearly identical fake interface, making it difficult to detect. Expert analysis from Certik, a blockchain analytics company, describes the breach as the largest in blockchain history. As a result, the crypto market has seen noticeable fluctuations, with Bitcoin dropping significantly from $100,000 to $82,000 per coin, partly due to investor concerns following the hack.
Despite the incident’s negative impact on Bybit’s customers and potential for drawing increased regulatory scrutiny, the United Arab Emirates continues to support Bybit’s activities, providing regulatory approvals to operate. Dubai, with its tax-free personal income and capital gains policies, remains a strategic location for cryptocurrency enterprises and wealthy investors. Between mid-2023 and mid-2024, the UAE reportedly attracted over $30 billion in cryptocurrency, placing it among the world’s top 40 markets, according to a Chainalysis report.
