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South Korea’s government is intensifying its efforts with legislation designed to trace and freeze North Korean cryptocurrency and virtual assets funneled into Pyongyang’s illicit weapons program. The story, initially reported by a local media outlet, cites confidential government sources who reveal that this move aims to overhaul the nation’s cybersecurity framework.
Anonymous insiders also divulge that the administration plans to amend the original bill proposed by the National Intelligence Service [NIS] in November 2022. The revisions will include new provisions to actively “trace and neutralize” cryptocurrency and other virtual assets acquired by North Korea through hacking and other unlawful means.
In addition to this cybersecurity legislation, there are reports that the South Korean government is contemplating the creation of a national cybersecurity committee directly under the president’s purview. This committee would implement a range of measures to fortify the country’s defenses against cyberattacks originating from foreign entities. The leadership of this committee, as per the report, would be entrusted to the chief of the National Security Office and would include the director of the NIS.
A recent report from South Korea’s National Intelligence Service underscores the ongoing threat posed by cyberattacks in the cryptocurrency space. Over a period of six months, North Korean hackers managed to accumulate an illicit fortune of approximately $180 million, highlighting the gravity of the situation.
The illicit activities of North Korea’s cyber community, notably the infamous Lazarus Group, have become a worldwide concern. This group has been responsible for numerous high-profile cryptocurrency breaches, including the massive $600 million hack of Ronin, the blockchain supporting the popular play-to-earn game Axie Infinity, which occurred last year.
South Korea Launched An Interagency Investigation
In June, South Korea established an interagency investigation unit to combat crypto-related crimes in response to a surge in illegal activities in the market and the absence of legal protections for investors. The nation’s cryptocurrency market, once one of the world’s fastest-growing, experienced a 66% decline in market capitalization last year due to a series of global and domestic events that dampened investor sentiment.
Domestic factors included a crash of the so-called stablecoin TerraUSD and its counterpart Luna in May 2022, leading to public outrage over alleged fraud by Do Kown, the developer of the currencies. Kown, a global fugitive, was apprehended in Montenegro and faces fraud charges in the United States.
Reuters further revealed that suspected crime-related transactions across local cryptocurrency exchanges surged by a staggering 1,263%, increasing from 66 in 2021 to 900 in 2022.
