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Research reveals how North Korea laundered more than $ 100 million in stolen cryptocurrency

    North Korea steals $ 2 billion from exchanges to build weapons of mass destruction

    Blockchain analysis company CipherTrace has announced a detailed study of how two Chinese nationals – linked to North Korea, laundered hundreds of millions of dollars in stolen electronic money.

    The two are believed to be related to Lazarus Group – the hacker group behind Sony's 2014 hack, the 2017 Ransomware WannaCry malware and a $ 7 million theft attack on Bithumb (also in 2017).

    They used “peel chains” to hide the size of the deposits to avoid unwanted attention and fake photos to fool the KYC verification process, among other tricks.

    On March 2, the US Treasury Department's Office of Foreign Assets Control (OFAC) added Tian Yinyin and Li Jiadong to the list of individuals and organizations sanctioned for money laundering activities. Crypto assets originated from a number of South Korean name exchange exchanges in 2018. The team was charged with conspiracy to launder money and operate an illegal money transfer company.

    $ 233 million worth of electronic money was stolen from the exchange – including 218,800 ETH worth $ 141 million, 10,800 BTC worth $ 95 million and a number of valuable ETC, XRP, LTC, ZEC, DOGE from USD 500,000 to USD 3.2 million.

    Use Peel chains to hide large deposits

    According to CipherTrace, cyber criminals have used “peel chains” to tamper with the size of the funds deposited into any wallet. Instead of trying to make a large, single deposit to the exchange, thereby attracting unwanted attention, criminals have established a chain of addresses that the stolen cryptocurrencies have. can go through, with a small amount of cryptocurrency being transferred to the exchange at a specific time.

    When the coin flowed through the peel chain through 146 separate transactions, the funds were then reverted only on two anonymous exchanges.

    U.S. Treasury documents estimate that about US $ 100.5 million of stolen cryptocurrencies flowed through Tian and Li through many North Korean cryptocurrency wallets. Tian transferred over $ 34 million from his bank account to an exchange, while Li used 9 different banks to transfer $ 33 million.

    Subsequent investigations revealed that the couple had also used peel chains to successfully wash the proceeds through two other exchange platform hacks allegedly made by North Korea.

    The methods used show holes in the KYC process

    Tian and Li can easily bypass the KYC processes of exchanges. The two men uploaded the images on an exchange that pretended to be two men, including a Korean and a German, holding government-issued IDs. Image metadata shows that not only are the images fake, but actually the heads in the photos are photoshop.

    In a press release against Chinese citizens, General Benczkowski of the US Department of Justice (DoJ) asserted that DoJ “will smash anonymous veins of cryptocurrencies to force criminals to responsible, no matter where they are. “

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    According to CoinTelegraph
    Translated by ToiYeuBitcoin

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