In a recent fraud attempt in the crypto industry, a North Korean hacker named Lazarus Group transferred stolen cryptocurrency worth $150,000 from their wallet account to the account of a Cambodia-based Firm wallet named Huione Pay.
This cryptocurrency payments and remittances company received huge amounts of cryptocurrencies between June 2023 and February 2024. This finding is a huge revelation into the frauds happening in the purportedly secure cryptocurrency market.
The Lazarus Group had looted around $160,000 from three cryptocurrency firms: the Estonnis-based firms Atomic Wallet and CoinsPaid and Alphapo, a firm registered in Saint Vincent and the Grenadines. The crypto thefts are allegedly aimed at funding North Korea’s weapons acquisition.
As per the United Nations data, cryptocurrencies, being a decentralized market, will help North Korea bypass acquiring international sanctions and get funding for any unlawful acquisition of banned weapons.
However, Huione Pay, which received the funds, has said in a statement that they are unaware of such a development. They said that the company being a third party does not have a say in the fund transfer from wallets not under their management.
As per the management of the National Bank of Cambodia, payment companies like Huione Pay were prohibited from doing any transactions involving cryptocurrencies.
This ban, which was implemented in 2018, was aimed at preventing losses due to the market volatility of cryptocurrency prices and cybercrimes or losses due to the unawareness of the inbuilt blockchain technology.
It is estimated that the hackers converted the stolen crypto coins to various currencies such as the stablecoin USDT, which helped them easily avoid tracking by the authorities.
The incident involving Huione Pay is the latest in a series of cryptocurrency frauds involving firms based in Southeast Asia. The various authorities say that this region is the breeding ground of many illegal transactions in the realm of cryptocurrencies.
Cambodia was recently removed from the grey list of countries where cybercrimes are rampant, by the Financial Action Task Force (FATF) owing to major improvements shown by the country in safeguarding its financial sector from fraudulent activities.
Even though Huione Pay has washed its hands in this matter, the Cambodian authorities have said that the firm will be punished appropriately for this incident.
The Impact of This Hacking Attempt on the Global Cryptocurrency Market
The fraudulent transaction of stolen cryptocurrencies by a North Korean firm to a Cambodian firm and its enormity is a strict testimonial to the long-standing debate about the fallibility of decentralized financial networks.
Even though the sector is guarded by the most modern technology and is supposed to be secure, its wide availability and accessibility and the vulnerability of the private keys of crypto coins during times of transactions can make them open to thefts and hacks.
A cryptocurrency theft of this magnitude is enough to deter investors from investing in them. It will undermine the overall acceptance of cryptocurrencies in the global financial market.
Such thefts can mean irreparable damage to the ecosystem as the stolen coin, in most cases, cannot be recovered or restored. As the market is decentralized and without any regulatory oversight, there is no responsible authority to investigate the losses and find ways to recover them.
The fraudsters are very much aware of this weakness of the system and are fast in acting towards converting and concealing the stolen currency.
However, such hacking incidents are a wake-up call for the concerned parties to revamp their security measures to make the ecosystem foolproof.
It is a chance for them to identify the weak points in the system and take adequate measures to counter them.
Also, Read: The Rise Of Crypto Scams: How To Spot And Avoid Them?
The Bottom Line
As the cryptocurrency industry is vulnerable to rampant attacks on both small and large scales, users must take compounded measures to safeguard themselves from such attacks.
Moreover, the makers of new currencies should make sure that innovations in the field of technology are made from time to time so that hackers do not outsmart them.
A joint effort from all concerned parties is needed to uphold the integrity of the cryptocurrency industry, which is vital to attracting new businesses to invest in them.
