North Korea cracks an internal bank hacking gang: veteran net war elites colluded with IT prodigies from top universities to smuggle foreign exchange using cryptocurrencies

Mars Finance reported that on July 25, the North Korean National Intelligence Service raided a safe house in Pyongyang on July 12 and arrested a hacker gang that had breached the internal networks of the Central Bank of Korea and the Trade Bank. Pyongyang sources said the gang’s leader was a retired veteran from the network warfare unit under the Reconnaissance General Bureau of the DPRK. They recruited young IT prodigies from Kimchaek University of Technology and Pyongyang University of Science and Technology, and used hacking skills trained by the military and universities to break into the two banks’ tightly secured internal networks and external payment systems. The stolen national trade funds were then split into small amounts and transferred to overseas cryptocurrency wallets, where brokers converted them into cash.

The gang also established bases in border areas such as Sinuiju in North Pyongan Province and Hyesan in Ryanggang Province, for the purpose of converting the laundered cryptocurrency into US dollars in real time. The gang had long been running a crypto trading network from a safe house in Pyongyang until officials of the North Korean central bank discovered small anomalies in foreign-exchange payment approvals and suspicious records of overseas IP logins. Following the trail, the North Korean National Intelligence Service locked onto the location and, during the raid, caught the suspects on the spot while they were in the middle of their operation, seizing computer equipment valued at several hundred thousand dollars and a large number of unregistered disposable mobile phones. It then sealed off the headquarters and computing centers of the two banks and deployed mobile signal-detection vehicles to track anomalous wireless frequencies.

After the news spread, it caused a major stir among senior officials in Pyongyang, the military, and the university circles. One official said, “The country trained them to use these skills to defend the motherland, but they ended up looting the national treasury instead. Not only will they themselves face extreme punishment, but the entire bloodline of their family may also be unable to survive.” Senior leadership of the Reconnaissance General Bureau and the science and education authorities have been tense over this case, fearing that accountability will extend to them as well.