How North Korea became a mastermind of crypto cybercrime

The game allows players to breed, trade and fight cartoon monsters to earn cryptocurrencies including the game's own "Smooth Love Potion" digital token. It had more than a million players.

A North Korean hacking syndicate made off with $620 million in ether after raiding the network of the game'sBlockchains.

One of the largest of its kind in history was confirmed by the FBI, which vowed to continue to expose and combat North Korea's use of illegal activities.

North Korea is growing more sophisticated as a cyber actor. One of the world's four principal nation state-based cyber threats are it, along with China, Russia, and Iran.

Money raised by North Korea's criminal cyber operations are helping to fund the country's nuclear and missile programs according to a UN panel of experts. In July, Anne Neuberger, US deputy national security adviser for cyber security, said that North Korea uses cyber to gain.

According to Chainalysis, North Korea stole $1 billion in the first nine months of the year.

The collapse last week of FTX, one of the biggest exchanges, highlighted the chaotic nature of the market for digital assets. The lack of international regulation of the same markets has been demonstrated by North Korea.

The scale and sophistication of the hack exposed how powerless the US and allied countries seem to be.

Only a small amount of the loot has been recovered. Some of the stolen funds were traced through a series of decentralized exchanges and software tools that can shuffle the holdings of different users so as to obfuscate their origin.

In August, the US imposed sanctions on the Tornado Cash mixer, which the US Treasury said had been used by the hackers to move more than $450 million of their ether haul.

According to the US, the tool was used to support North Korean hackers who were in turn supporting the country's weapons of mass destruction program.

Experts warn that the problem is likely to get worse over the next decade as more and more goods and services are made available for sale in the unregulated world of digital currency.

Allison Owen is a research analyst at the Centre for Financial Crime and Security Studies. North Korea will continue to find ways to evade sanctions even though countries are taking steps in the correct direction.