North Korean developers have worked for a surprisingly large number of crypto projects.
Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. Last week, CoinDesk's Sam Kessler reported that developers and IT workers employed by the Democratic People's Republic of Korea – i.e. North Korea – had managed to get themselves hired by a number of crypto projects, giving them two different ways of raising funds for the national regime. P.S.: I'm in Salt Lake City for Permissionless this week. Around? Say hi. |
|
|
In this report, we’ll explore how analyzing Binance’s ETH-USDT Order Book and Tradebook Data can help traders spot potential risks and opportunities. As an example, we will identify if there were patterns that could have foreshadowed the effects of the yen carry trade unwinding before the price action unfolded. Understanding these signals is key to navigating the increasingly connected world of traditional finance and crypto. |
Amberdata delivers comprehensive digital asset data and insights into blockchain networks, crypto markets, and decentralized finance empowering institutions with the critical data required to participate in digital assets. Trusted by Citi, NAB, Nasdaq, Franklin Templeton and more. |
|
|
North Korean Supreme Leader Kim Jong Un (Contributor/Getty Images) |
CoinDesk reporter Sam Kessler found that more than a dozen different crypto companies and projects – including some well-known ones – inadvertently hired developers and IT workers from the Democratic People's Republic of Korea (aka North Korea), something that's troubling on a number of levels for these projects. |
North Korea is under heavy sanctions, meaning hiring developers from the country would put a project in violation of U.S. law. It also seems clear that some of these employees enabled the projects they worked for to be hacked.
|
North Korean employees working for U.S. companies isn't a new problem. In July, cybersecurity firm KnowBe4 published a blog post explaining how it accidentally hired a DPRK software engineer. A few months before that, an Arizona resident and four others were charged by prosecutors with helping DPRK IT workers land roles at U.S. companies.
These employees send (or are forced to send) most of their paychecks to the regime, which in turn helps the DPRK continue its various activities. Projects that are compromised by vulnerabilities inserted by these employees also risk losing more funds to North Korea. It's not just a hypothetical concern; prosecutors have brought various charges alleging DPRK-affiliated IT workers were able to compromise companies.
Sanctions concerns first: Any company that hires an employee based in North Korea violates U.S. sanctions law. It doesn't necessarily matter if this hiring was inadvertent – the companies can be prosecuted regardless.
Kessler reported that, so far at least, the U.S. government has "been lenient about bringing charges – on some level acknowledging that they were victims of, at best, an unusually elaborate and sophisticated type of identity fraud."
It's still something companies will have to pay closer attention to as they move forward, especially with crypto gaining increasing attention in recent months.
Companies also need to be concerned with getting hacked by the DPRK, which again is not just a hypothetical concern. Axie Infinity is perhaps one of the most prominent examples of how easily hackers can steal funds from a crypto company after just a small mistake. Axie was hacked in March 2022, losing $625 million at the time. U.S. officials tied North Korean hacking group Lazarus to the theft a month later.
Several other projects were hacked after employing DPRK IT workers, Kessler reported, including Sushi Finance.
Sam's entire report is worth your attention – I'm re-linking it here – and it would behoove companies to consider how to mitigate these kinds of risks moving forward. |
|
|
Stand With Crypto, a nonprofit, champions for clear, common-sense regulations for the crypto industry. 52 million Americans have owned crypto and in 2024, the future of crypto is on the line. Crypto is a movement—economic, social, and political. Click here to learn where political candidates stand. Join us and pledge to vote today. |
|
|
Stories you may have missed |
|
|
12:00 UTC (1:00 p.m. WAT) A judge is supposed to announce whether detained Binance executive Tigran Gambaryan will be released on bail. |
|
|
(The New Yorker) The New Yorker took a look at the crypto industry's approach to the 2024 election – and the hundreds of millions of dollars invested so far. (The Wall Street Journal) A hacking group with ties to the Chinese government was able to access networks operated by Verizon, AT&T and Lumen Technologies using wiretapping infrastructure. The revelation's raising fresh concerns about how backdoors and other means of accessing people's communications may be misused or abused. (404 Media) Smart glasses + facial recognition technology + the lack of privacy in digital data means a pair of students figured out how to create glasses that can instantly identify whoever the wearer is looking at and look up their addresses, Social Security numbers or other personal information. More from The Verge here as well. (Engadget) Someone hacked LEGO's website to promote a crypto scam. Really, LEGO? I'm disappointed. |
|
|
Join the CoinDesk Flash Waitlist Your Portfolio Will Thank You CoinDesk Flash gives you the power of news that moves markets — be the first to get the latest crypto financial opportunities, trends, and technology insights. |
|
|
If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Twitter @nikhileshde. You can also join the group conversation on Telegram. See y’all next week! |
|
|
|
If you believe this has been sent to you in error, please safely unsubscribe.