To gain control of the blockchain, bad actors needed to control five of these nine validator accounts. The Ronin blockchain runs on a proof-of-authority model, wherein validation control is given to nine handpicked accounts. After several rounds of interviews, the engineer received a formal job offer via PDF. A senior engineer who worked on Ronin was approached by North Korean operatives on LinkedIn earlier this year, according to a report from The Block. At its peak in August 2021, the game was generating over $15 million a day. To support this digital economy, developer Sky Mavis created its own blockchain called Ronin, whose sole purpose is to process Axie Infinity transactions. The Axie Infinity hack that netted North Korea over $600 million in crypto started with just that: a tainted PDF.Īxie Infinity is a web browser game similar to Pokemon, except that the Axie creatures you battle are owned as NFTs and can be traded for crypto. One bad clickĪ single corrupted file can leave disaster in its wake. North Korean hackers have shown they can cause immense damage if they manage to dupe just one person. None of them got referred to one of his client companies, which is lucky. Garlock estimates he encountered a dozen candidates he now considers North Korean operatives between February and April. Ether, the second biggest cryptocurrency, is up over 700%. At the same time, cryptocurrency values have skyrocketed.ĭespite the recent crypto crash, bitcoin is trading 250% higher than before the pandemic. Trade with China, by far North Korea's biggest economic partner, fell 80% in 2020, and reports of food shortages abound. But the zero COVID strategy of leader Kim Jong Un has closed borders, thinning the country's already slight revenues. It historically relied on black market trade, exporting coal, meth, cigarettes and labor to Southeast Asia, Russia and especially China. The Democratic People's Republic of Korea, as North Korea is formally known, has come to depend more on crypto since the pandemic began. The rogue nation has been ratcheting up ballistic missile tests in the past 10 days: Over 5 million residents of Japan were told to seek immediate shelter on Wednesday after North Korea launched a missile over the island of Hokkaido. It's highly likely this, too, was funded at least in part by stolen cryptocurrency. A country whose crypto prowess, North Korea watchers say, is directly funding the development of those nukes, with the odds of a new nuclear weapons test growing. "By any standard, they are a crypto superpower."Ī crypto superpower with nuclear weapons, that is. "Crypto is arguably now essential to North Korea," said Nick Carlsen, a former North Korea analyst at the FBI who now works for crypto security firm TRM Labs. When two South Koreans earlier this year were revealed to have been stealing military information for a North Korean spy, it turned out they'd been paid in bitcoin. It's also funneled to the country's espionage operations. About a third of the crypto North Korea loots goes into its weapons program, including nuclear weapons, estimates Anne Neuberger, a deputy national security adviser in the Biden administration. North Korean hackers stole $840 million in the first five months of 2022, according to Chainalysis data, over $200 million more than they'd plundered in 20 combined. The Lazarus Group, a hacking outfit associated with North Korea's government, managed to drain over $600 million in crypto from a blockchain used by NFT game Axie Infinity. The danger is more than theoretical, as one catastrophic hack in March showed. That's in accord with warnings from both the FBI and the Treasury Department, which have cautioned about North Korea's escalating risk to the cryptocurrency industry. Now there's a new hypothesis: The people interviewing for jobs were North Koreans trying to siphon money to the reclusive nation. "I originally thought the scam was that they were offshore, trying to take advantage of remote work to just get a salary for not working." "I got annoyed after a while, because it was a total waste of time," Garlock said. Garlock, the founder of the Stella Talent Partners recruitment firm, soon encountered another, nearly identical candidate. It was a strange and unproductive interview. He claimed to be from San Francisco but, when pressed, wasn't able to pinpoint his location more precisely than "Bay Area." There was constant chatter in the background, like he was jammed in a small, crowded room. The interviewee joined the Zoom interview with his camera off and had to be cajoled into turning it on. While screening candidate engineers for a crypto firm in February, Garlock encountered one applicant who raised almost every conceivable red flag. It was an astonishing interview for recruiter Elliott Garlock.
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