Is North Korea Targeting Crypto Companies in New Ways?

North Korea Targeting Crypto Companies, Says DeFiance Capital Founder

Arthur Cheong, founder of DeFiance Capital, has warned that North Korean-backed hackers have devised sophisticated methods to target crypto companies.

On Friday, Cheong shared on Twitter that the hackers were using new forms of social engineering aimed at “bypassing our psychological defenses.” He claims the information emerged through research and conversations with leading cybersecurity experts.

At the forefront of these coordinated attacks, according to Cheong, is BlueNorOff, a North Korean-sponsored cybercrime group.

The crypto expert said he simply decided to make his findings public so that the entire crypto industry is on high alert. He said the group was so resourceful and determined that nothing predicted what they were capable of doing:


β€œThey may even change tools and attack patterns in the future. Once current attack methods become less effective, such as the recently discovered trojanized DeFi app and wallet attacks. Given the success, North Korea is likely to dedicate more resources to the group , to increase the intensity of the attack.”

Given that he was the victim of a social engineering attack last month, Cheong appeared to be speaking from a worrying place. Using a “spear-phishing” email, the hacker was able to deploy malware onto his device and extract the seed phrase for his hot wallet. He ended up losing $1.7 million worth of NFTs in the attack.

He said evidence backed by a cybersecurity firm confirmed BlueNorOff was behind the attack.

The Twitter thread not only highlights the security risks, but also offers some solutions. Cheong advises companies and individuals in the crypto space to be more cautious. He recommends using a multi-signature enterprise-grade hardware wallet for transactions.

He warned that crypto companies should be extra diligent when recruiting new team members. According to him, these hackers are trying to infiltrate crypto companies. Sometimes applicants can’t “match their profile to a resume.”

Is North Korea spying in the US?

Cheong’s warning comes after the U.S. Treasury Department revealed that North Korean hackers were behind the Ronin Bridge breach that cost $625 million. The crypto industry has already lost over $1 billion in the first quarter of 2022, showing just how much the sector has lost this year.

The U.S. government has also promised a $5 million reward for information that could help disrupt North Korea-backed cybercriminals.

In another development, a U.S. court sentenced former ethereum developer Virgil Griffiths to five years in prison for providing technical information on how North Korea evaded sanctions.

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