"North Korea to Fund Weapons Development with Hacking Proceeds"

FBI identifies North Korea as force behind cryptocurrency theft
North Korea accelerates weapons development and military deployment
"Hacking makes up for foreign-currency shortfalls caused by sanctions," analysts say

North Korea, which has been identified as behind a large-scale cryptocurrency theft, is also accelerating the development of new weapons, including cluster munition warheads and unmanned aerial vehicles. Analysts say it is using hacking to make up for foreign currency revenues blocked by sanctions and support its military buildup.

On October 31, the U.S. Federal Bureau of Investigation (FBI) said North Korea had stolen more than $6 billion in cryptocurrency from Binance and identified the cyber activity as “TraderTraitor.” The FBI said it had found indications that the stolen assets were mainly being converted into Ethereum and requested that related transactions be blocked. On the same day, North Korea said it had conducted a test to assess the power of a cluster warhead for tactical ballistic missiles and announced that it would deploy the weapons to military units within the year. Earlier, on October 29, it staged demonstrations of the capabilities of suicide drones, cruise missiles and 600-mm multiple rocket launchers at a drone exhibition.

Analysts say North Korea may be trying to fund the development and deployment of new weapons through hacking. Cho Han-beom, a senior research fellow at the Korea Institute for National Unification, said, “Nuclear weapons cannot be used, so it is investing money in conventional weapons,” adding, “Kim Jong Un, chairman of the State Affairs Commission, wants to gain an edge in conventional forces as well, but developing conventional weapons costs astronomical sums.” He went on to say, “It is trying to make up for its funding shortfalls under sanctions through hacking.” However, he predicted, “This hacking incident will probably backfire. The scale is so large, and the FBI immediately identified North Korea, so its room for maneuver will narrow further.”

However, the flow of funds from hacking proceeds to individual weapons systems should be considered separately. Asked whether the stolen assets were being diverted to develop new weapons, Yoo Ji-hoon, a research fellow at the Korea Institute for Defense Analyses, said, “North Korea may have received related advanced technologies or information from Russia, or they may have been accumulated as technologies built up over time continued to evolve.” He added, “It is also worth discussing the scope, level, methods and means of cooperation in line with changing patterns of hacking.”

Meanwhile, on November 2, Kim Jong-sik, first vice department director of the Central Committee of the Workers’ Party of Korea, denounced the South Korea-U.S. “Iron Mace” tabletop exercise on nuclear and conventional integration in a statement, saying, “Our defense policy of further and more rapidly strengthening the country’s nuclear war deterrent will not change in the slightest.”

This content was produced with the assistance of AI translation services.