FBI Warns of North Korean Hackers Targeting Bitcoin and Ethereum ETFs

North Korean hackers have been focusing their attention on crypto ETF issuers, as indicated by the FBI. The FBI has likely compiled a significant list of potential targets, according to a security analyst interviewed by DL News.

These hackers have historically targeted crypto companies due to the irreversible nature of blockchain transactions. Once cryptocurrency is in a hacker’s possession, no bank or government can reverse an unauthorized transaction on behalf of the victim.

Recent developments suggest that these hackers are now setting their sights on larger targets. The FBI issued a warning in its latest public service announcement, cautioning that North Korean hackers have been researching various entities associated with cryptocurrency exchange-traded funds (ETFs) over the past few months. This research indicates that malicious cyber activities may be attempted against companies linked to cryptocurrency ETFs or other financial products related to cryptocurrencies.

In response to the FBI’s alert, Taylor Monahan, the lead security researcher at MetaMask, advised ETF issuers to take the warning seriously. She emphasized the importance of reviewing internal controls, identifying vulnerabilities, ensuring proper logging practices, and sharing the FBI’s public service announcement with employees. Monahan highlighted the proficiency of the Lazarus Group, a hacking group believed to be connected to North Korea, in infiltrating organizations.

Monahan also noted that disseminating public service announcements is a labor-intensive process that involves coordinating various parties to confirm intelligence. While PSAs are a valuable tool for alerting businesses at risk, direct communication with potential targets might be more effective.

In the realm of cryptocurrency investments, Bitcoin ETFs debuted in the US in January, followed by Ethereum ETFs in July. Bitcoin ETFs have seen significant success, attracting approximately $50 billion in the first half of the year, contributing to Bitcoin’s record high in March. On the other hand, Ethereum ETFs experienced a lukewarm reception, with demand tapering off after an initial surge.

ETFs are appealing to risk-averse investors as they offer exposure to underlying assets without the complexities and risks of self-custody. Major investment banks like Goldman Sachs and Morgan Stanley have disclosed substantial holdings in US spot Bitcoin ETFs, collectively amounting to $600 million.

North Korean hackers have conducted 58 suspected cyber heists, resulting in the theft of $3 billion worth of cryptocurrency over the past seven years. These illicit funds have been utilized to fund the country’s nuclear weapons program. The hackers’ tactics include sophisticated social engineering schemes and fraudulent job applications.

Despite their recent focus on crypto targets, hackers have a history of targeting traditional financial institutions. Monahan highlighted their past success in infiltrating global banks and targeting systems like SWIFT. She emphasized that these hackers follow the money, and ETF issuers are currently a lucrative target.

In conclusion, North Korean hackers pose a significant threat to the cryptocurrency sector, particularly targeting ETF issuers. Vigilance, robust security measures, and awareness of potential risks are crucial for safeguarding against cyber threats in the evolving landscape of digital assets.